Centum, a major East African investment firm, reported a 27.5% increase in after-tax profit for the first half of 2019, reaching KSh2.1 billion. This growth was driven by higher investment income and a KSh1.2 billion gain from the sale of GenAfrica Asset Managers.
Analysts at Faida Investment Bank noted that Centum's Net Asset Value at the end of H1 2019 stood at KSh73.6 per share, significantly undervalued compared to its KSh32.2 closing price on 1 March 2019. The firm's conservative valuation approach has historically allowed for above-market gains on asset exits, with eight such transactions in the past five years yielding returns exceeding recorded carrying values.
FIB analysts issued a long-term buy recommendation for Centum shares, citing the company's strong historical performance and the discounted valuation. They anticipate the firm will use income from future asset sales to reduce debt and fund income-generating projects, potentially boosting cash flow and dividend distributions.
