Visited Two Rivers (on a Saturday in June 2021) as part of my ongoing DD.


The Mall
Quite busy (lots of young people) but that doesn't always translate into sales for shops. There was an event going on which seemed to attract a lot of young people.

Carrefour was busy and the floor was teeming with people/shoppers.
The food court was quite busy.
The ground floor (CK Square/waterfront) had a lot of activity. Some musical group was playing. Probably related to the event going on.

The upper floors were NOT busy and one could have driven a car though it without any drama! Lots of empty storefronts. I wonder how busy it is during weekdays. It would not surprise me if some of the banks left ATMs in place but didn't have banking halls.

Residential

Cascadia is coming together. You can see the construction from Limuru Rd and from the mall. Multiple blocks coming up but delivery . They are marketed as located in Gigiri. Delivery of the first block, IMHO, is FY23.

One tower of Riverbank looks almost done but finishing can take longer. Good to see a local (not Chinese) contractor on site. I doubt the 2nd tower will start any time soon unless the economy picks up and global travel re-starts. I can see they will be attractive for UN and embassy personnel. Delivery, IMHO, is 2H22.

Mzizi has been sectioned off but the ground has not broken yet BUT IMHO sales are probably good. Centum has been pushing these to bulk buyers as an alternate to Ruaka. Delivery of Phase 1 is FY2025. Patience required.

I couldn't figure out where the 35mn+ "The Loft" houses (not high-rises) were but some have broken ground. Those will be a tough sell for the remainder.

Centum said in earlier presentations that they break ground (for a building) once they get 30% sales. Seems they have managed that for all 4 projects in Two Rivers. The nature of the buildings means they will have some empty units upon completion but they can rent these out.



Vipingo

Awali has been handed over (in 2H 2020-21) so we should see the "profits" (not cashflow) coming through. It seems they have a few units that haven't sold or repossessed after the buyers fell through.
No signs of Phase 2 yet but perhaps they haven't reached 30% sales yet.

1255 Palm Phase 2 has started. Phase 1 is almost complete and will be delivered in in 3-6 months in FY22.

Kingswood plots being sold at 2.5mn+ each.

Also 20mn+ plots near the ocean/cliff. These may take a while though! Pole pole is OK given there are a lot of plots to be sold. These will compete with Vipingo Ridge.

Uganda Pearl Marina
That's a trip I would love to take!

From my small research, these are Centum's investments to look out for in the Private Equity segment which are yet to pay a dividend to Centum but are very promising:

Sidian Bank: Q1 finally was able to hit 100m in profit, the highest since interest rate caps. Hoping the bank can finally achieve a return on equity of at least 15% by the end of the 4.0 strategy.

Greenblade Growers: Going by one of Mworia's tweets they have approved to increase production capacity by 50%. 2019 they had a major challenge with the soil mineral components that caused the leaves to wither hence high rejection rate when exporting. This was overcomed in 2020 and they were able to achieve over 80% of the previous year's volume despite air cargo issues (closure of airports). They stated it may be paying a dividend to Centum going forward and I heard the Greenblade CEO stating that their product is very high margin (64%).

Tribus TSG - According to an article by Capital FM, they hit 1bn in revenue from sales of apparel and interior decor materials. It is also project to earn a profit of over 100 million which is a five-fold return on investment.

ACE Holdings - This holds Sabis Runda which is projected to break even by next year. High demand for international schools will fuel growth in future. Dividends will start flowing most probably by FY23

From my very rough estimates, these may soon add an extra 250 million in dividends to Centum by the end of 4.0 strategy. Centum has other mature companies like Isuzu, Nas Servair and Longhorn which have been regular dividend payers to Centum.

On the mall, I wish we had it's P&L and Balance Sheet so we could look at the profitability or lack thereof.
I hope the loans are being serviced from internal cashflow vs borrowing (& cash injections).

Even if it is not profitable but there is constant cashflow to service debt then it will slowly become "free and clear"

The North Tower was empty and has been so since it opened. Office space is no longer what it used to be. I "hope" (not a strategy!) the 1,000+ residents of Cascadia, Riverbank, Mzizi, Loft will provide demand for these offices. Victoria (office) Towers seemed quiet too but it was a Saturday.

Results should be out before 31 July! Watching keenly.

Centum has great Investor Relations. It's a matter of time before the good stuff starts coming through. I am buying what I can manage at 16 but cash is tight.

30th June? Really? How did you figure that?

The loss last year was a FV Loss. Which is why the Balance Sheet and CF Statement are important for a better understanding.