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Centum pays out KSH 1 billion to employees
enyands
#221 Posted : Tuesday, November 03, 2015 10:30:51 AM
Rank: Elder


Joined: 12/25/2014
Posts: 2,301
Location: kenya
sparkly wrote:
mv_ufanisi wrote:
This bear seems to have pushed people to extreme pessimism and I'm one of them.
Centum not too long ago was a darling on Wazua. They had great projects in the pipeline, spitting a good game with regards to their vision for the future and getting great deals. While the stock price was going up people were happy. And ofcourse the Business Daily correspondent based in Centum kept supplying a steady stream of good news on the counter.
The bear seems to have hit Centum shareholders the worst, they were the most optimistic and to add insult to injury while shareholders lost value at the NSE, Centum was going crazy announcing how it's giving the biggest employee bonuses in the NSE.
The truth though always seems to be in the middle of extreme optimism and extreme pessimism.
Yes there's a stink coming from Centum because of the bonuses. The delay of the Two Rivers project shouldn't be a surprise for a project of its size. It's a little bit unclear whether there's some shady deals going on at Centum that skews returns for shareholders.

At the same time, Centum still remains quite a well diversified company with interests in multiple sectors. The fact that they held UAP at much less value on their books than what they eventually got (I think 2.2 billion versus 5 billion actual value) shows that they are being conservative and not trying to inflate asset values. They do have quite a number of talented guys at the company. James Mworia is a CFA charter holder (which means that he's smart and worked hard to earn that) and some of the employees are Tutu fellows, Alliance high school alumni etc. So you'd think that these are not the kind of people that would like to blow a career by taking a company down.

Their project execution has been quite exemplary - see Two Rivers from vision to execution and they have been quite bold with their projects. It's tough to find a team like that in Kenya and at a time when Africa is full of opportunities that would really be beneficial to a potential investor.

DJ CK is a looming presence on the company so you have to decide for yourself if he's likely to bring the company down and perhaps deal with another appearance at the courts a la Uchumi times. For the most part you have to check what his incentives are. Being such a large shareholder at Centum and staked his name on the company, he's more likely to benefit if the company valuation goes really north. Isn't his ambition to be a billionaire and appear on Forbes? Centum seems like the only vehicle that could achieve this for him.

Centum seems to have lost trust because of excessive executive compensation - they can redeem themselves by truly aligning employee and shareholder interests. For example, bonuses should at the very least not be paid on an annual basis but maybe in tranches of 5 years - that's anyways part of the 5 year planning tranches. That way employees focus on the long term. And atleast a large % of bonuses should be paid in company shares so employees and shareholders are in the same bus.
Summary: Centum is not as good or as bad as people make it out to be due to ups and downs of the NSE.


Good writing till the conclusion where you have claimed that we are bashing Centum because we are suffering bear blues.

You remind me of Dr Jason Ndaka Kaviti who meticulously examined Dr Ouko's fractures, gunshot wounds, extensive burns then reached the conclusion that the man had committed suicide.


its called having loose ends untied ama suspense. good article and very objective. though I don't know what your take is on centum mv_mfanisi
mv_ufanisi
#222 Posted : Tuesday, November 03, 2015 10:59:45 AM
Rank: Member


Joined: 1/15/2010
Posts: 625
My take is that it's hard to be emotionally objective about a company in the stock market. Hard to put feelings aside when a stock has just made you 100% or lost you 50%.

I think Centum is a good company that could be great if they deal with the executive compensation question by focusing on the long term bonus i.e. based on the 5 year strategy and outcomes and paying bonuses in shares not cash. It's also important for minority shareholders to verify that there are no related party transactions that benefit some significant shareholders.

For that 1 billion bonus that they were to pay, they should have gone to the market and bought 1 billion worth of shares and then given that to employees. That way they also provide demand for the company shares in the market which serves to stabilize the stock price and keep shareholders happy.

The upside of this stock is that they have so much opportunity to play with. They have money and execution capability to really ride the African growth wave.

The risks are that they overstretch themselves, run into cashflow problems or one of their mega projects goes horribly wrong.
enyands
#223 Posted : Tuesday, November 03, 2015 11:08:19 AM
Rank: Elder


Joined: 12/25/2014
Posts: 2,301
Location: kenya
mv_ufanisi wrote:
My take is that it's hard to be emotionally objective about a company in the stock market. Hard to put feelings aside when a stock has just made you 100% or lost you 50%.

I think Centum is a good company that could be great if they deal with the executive compensation question by focusing on the long term bonus i.e. based on the 5 year strategy and outcomes and paying bonuses in shares not cash. It's also important for minority shareholders to verify that there are no related party transactions that benefit some significant shareholders.

For that 1 billion bonus that they were to pay, they should have gone to the market and bought 1 billion worth of shares and then given that to employees. That way they also provide demand for the company shares in the market which serves to stabilize the stock price and keep shareholders happy.

The upside of this stock is that they have so much opportunity to play with. They have money and execution capability to really ride the African growth wave.

The risks are that they overstretch themselves, run into cashflow problems or one of their mega projects goes horribly wrong.



Applause clear now
MaichBlack
#224 Posted : Tuesday, November 03, 2015 11:09:37 AM
Rank: Elder


Joined: 7/22/2009
Posts: 7,570
Bachuma Gate wrote:
This same guy who lost big in Uchumi bought the Uchumi Branch next to KPLC years back from UCHUMI at a reasonable price using board and leased back to UCHUMI at reasonable rent.

We have to accept that even in school there were guys who were sharper than Ass.

Didn't the fellows sell just before the sh!t hit the fan???
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
grahamsdisciple
#225 Posted : Tuesday, November 03, 2015 11:18:59 AM
Rank: New-farer


Joined: 10/19/2015
Posts: 21
Location: Everywhere
mv_ufanisi wrote:
My take is that it's hard to be emotionally objective about a company in the stock market. Hard to put feelings aside when a stock has just made you 100% or lost you 50%.

I think Centum is a good company that could be great if they deal with the executive compensation question by focusing on the long term bonus i.e. based on the 5 year strategy and outcomes and paying bonuses in shares not cash. It's also important for minority shareholders to verify that there are no related party transactions that benefit some significant shareholders.

For that 1 billion bonus that they were to pay, they should have gone to the market and bought 1 billion worth of shares and then given that to employees. That way they also provide demand for the company shares in the market which serves to stabilize the stock price and keep shareholders happy.

The upside of this stock is that they have so much opportunity to play with. They have money and execution capability to really ride the African growth wave.

The risks are that they overstretch themselves, run into cashflow problems or one of their mega projects goes horribly wrong.




I think the issue for most guys on this thread who are against the company is a very fundamental one i.e. the incentives scheme. Incentives play a key role in life and for me it seems that the board has incentivised the management to super-charge asset values given that their compensation is not linked to real cash returns but rather growth in NAV. Once this incentive system is in place, then even an angel would follow the same procedure as the current management. No one is saying they're corrupt or even stupid, just saying that they have been given the wrong incentives.

This is an issue I noted in 2009. Secondly, the financial footing of the firm has significantly changed, given the lack of sustainable cash flows flowing into the firm and their increasing leverage the company could become a debt trap as they will need more debt to re-finance old debt (two corp bonds of 10b total atm) and to finance new projects whose economics are questionable.
mibbz
#226 Posted : Tuesday, November 03, 2015 11:24:27 AM
Rank: Member


Joined: 2/18/2011
Posts: 448
MaichBlack wrote:
Bachuma Gate wrote:
This same guy who lost big in Uchumi bought the Uchumi Branch next to KPLC years back from UCHUMI at a reasonable price using board and leased back to UCHUMI at reasonable rent.

We have to accept that even in school there were guys who were sharper than Ass.

Didn't the fellows sell just before the sh!t hit the fan???



They sold a portion but still remained with a substantial amount but they still own the building.Sharks!!
sparkly
#227 Posted : Tuesday, November 03, 2015 2:13:04 PM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
mv_ufanisi wrote:


The risks are that they overstretch themselves, run into cashflow problems or one of their mega projects goes horribly wrong.


Risks borne by the shareholder while the managers run laughing to the bank, 1B richer.
Life is short. Live passionately.
Mainat
#228 Posted : Tuesday, November 03, 2015 2:21:16 PM
Rank: Veteran


Joined: 11/21/2006
Posts: 1,590
Imperial bank was playing a game for 13yrs...
You give some guy an incentive in which he calls all the shots (he measures the achievement) and you may as well give him free money now.
Sehemu ndio nyumba
hisah
#229 Posted : Tuesday, November 03, 2015 7:14:06 PM
Rank: Chief


Joined: 8/4/2010
Posts: 8,977
Golden handcuff since Sept 2014. Nothing to see here!
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
mawinder
#230 Posted : Tuesday, November 03, 2015 7:28:58 PM
Rank: Elder


Joined: 4/30/2008
Posts: 6,029
Mainat wrote:
Imperial bank was playing a game for 13yrs...
You give some guy an incentive in which he calls all the shots (he measures the achievement) and you may as well give him free money now.

One of the owners of Imperial Bank Mr. Amin Manji is a director of Allgate which bought the house and leased it back to Uchumi. This fact I know very well.
Othelo
#231 Posted : Thursday, February 11, 2016 10:14:30 PM
Rank: User


Joined: 1/20/2014
Posts: 3,528
http://www.nation.co.ke/...4/-/nyubqv/-/index.html


By BRIAN NGUGI

Centum raids PwC for finance officer

Listed investment firm Centum has appointed a former PricewaterhouseCoopers executive as its group chief finance officer.


Centum Group chief executive officer James Mworia said Samuel Kariuki will be charged with providing oversight for the Group’s finance, fund raising, treasury and technology functions.


Mr Kariuki takes over from Risper Mutoko who was recently appointed Managing Director of Centum Business Solutions.


He recently served as Associate Director at PWC Rwanda.
Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
harrydre
#232 Posted : Wednesday, February 17, 2016 11:49:22 PM
Rank: Elder


Joined: 7/10/2008
Posts: 9,131
Location: Kanjo
how much do they pay these directors and Mworia the CEO?

Still nothing for the shareholder? I am worried!! Something might be cooking like huko Transcentury
i.am.back!!!!
enyands
#233 Posted : Thursday, February 18, 2016 12:34:27 AM
Rank: Elder


Joined: 12/25/2014
Posts: 2,301
Location: kenya
harrydre wrote:
how much do they pay these directors and Mworia the CEO?

Still nothing for the shareholder? I am worried!! Something might be cooking like huko Transcentury


Bonuses and dividends were frozen for 5 years harry.that was last AGM .so 4 years to go ...I have silver handcuffs here. Don't know when to break lose. ..
Sir invest
#234 Posted : Thursday, February 18, 2016 9:03:28 AM
Rank: Member


Joined: 8/19/2015
Posts: 125
Dont touch anything where DJCK is!!! Directors n employees reap more than the SHAREHOLDERS.
mkate_nusu
#235 Posted : Friday, June 03, 2016 1:47:08 PM
Rank: Member


Joined: 5/30/2016
Posts: 332
Location: Kayole
Sir invest wrote:
Dont touch anything where DJCK is!!! Directors n employees reap more than the SHAREHOLDERS.


How much should we expect the employees to be awarded this year?
KEGN, KPLC, KQ, SCOM
jgithige
#236 Posted : Friday, June 03, 2016 2:29:09 PM
Rank: Member


Joined: 7/10/2014
Posts: 145
Location: Nairobi
In the August 2015 AGM, the CEO elaborated about the 1bn bonus which was heatedly contested by the shareholders. He said that the bonus was staggered for the next 3 Yrs. Meaning if an employee leaves in between he/she will be entitled to the allotment for the particular period. This is a retaining strategy of employees.

Secondly, the CEO asserted that they give their staff salaries to their employees and ice them with bonuses based on targets to encourage good performance.

On the issue of ceding shareholding in two rivers to the likes of Oldmutual, think i was a wise move to diversify risk.

Last but not least a big chuck of 2 rivers land is still bare for future development.
"Blowing out someone else candle won't make yours shine brighter"-Anonymous
enyands
#237 Posted : Friday, June 03, 2016 3:18:23 PM
Rank: Elder


Joined: 12/25/2014
Posts: 2,301
Location: kenya
mkate_nusu wrote:
Sir invest wrote:
Dont touch anything where DJCK is!!! Directors n employees reap more than the SHAREHOLDERS.


How much should we expect the employees to be awarded this year?


You guys made alot of noise last year. So as head of board members I have decided we will do 500m. You guys will make noise but I don't care. I have invested more to this company than all of you guys combined.
Horton
#238 Posted : Friday, June 03, 2016 4:21:40 PM
Rank: Veteran


Joined: 8/30/2007
Posts: 1,558
Location: Nairobi
enyands wrote:
mkate_nusu wrote:
Sir invest wrote:
Dont touch anything where DJCK is!!! Directors n employees reap more than the SHAREHOLDERS.


How much should we expect the employees to be awarded this year?


You guys made alot of noise last year. So as head of board members I have decided we will do 500m. You guys will make noise but I don't care. I have invested more to this company than all of you guys combined.



ara @enyands!!!...kumbe u are DJ????!!!! 😎😎😎😎
streetwise
#239 Posted : Friday, June 03, 2016 4:40:15 PM
Rank: Veteran


Joined: 6/23/2011
Posts: 1,740
Location: Nairobi
Afer all baba alisema kelele ya chura aiwezi fanya ngombe asikunywe maji.

Sasa unaona, 5 years later all the employees will be pretty rich and the share holder ..maliza senatnsi na neon inayo paa
enyands
#240 Posted : Friday, June 03, 2016 4:58:36 PM
Rank: Elder


Joined: 12/25/2014
Posts: 2,301
Location: kenya
Horton wrote:
enyands wrote:
mkate_nusu wrote:
Sir invest wrote:
Dont touch anything where DJCK is!!! Directors n employees reap more than the SHAREHOLDERS.


How much should we expect the employees to be awarded this year?


You guys made alot of noise last year. So as head of board members I have decided we will do 500m. You guys will make noise but I don't care. I have invested more to this company than all of you guys combined.



ara @enyands!!!...kumbe u are DJ????!!!! 😎😎😎😎


U made my day @horton Laughing out loudly
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