This archive report was first published on 27 September 2021.
On September 27, 2021, Centum Investment Company Plc announced plans to address its undervaluation on the Nairobi Securities Exchange (NSE) where its stock trades at less than a third of the value of net assets.
According to the company's board of directors, the big valuation gap has persisted, and they are considering several strategies to fix it.
"The share price does not reflect the value of the share that you are holding," Dr Laila Macharia, Centum's Vice Chairperson, told shareholders.
Centum's share price closed at Sh17 on Friday, rising 21.35 percent from lows of Sh14.05 recorded on July 27.
However, the stock still trades at a massive 72.9 percent discount compared to the company's net asset value per share of Sh62.9 as captured in the financial results for the year ended March.
Centum has explored various actions to address its low share price, including buying back its own shares, raising dividend payouts, and improving earnings by reducing costs and selling subsidiaries with weak cash-generation potential.
Centum also believes its weak share price is as a result of investors' perception of risk and not fully understanding its business model.
