Centum Investment is set to book a gain of about Sh1.3 billion from the sale of its 73.4 per cent stake in asset manager GenAfrica, a transaction that is set to lift its earnings in the half year ending September.
The company had planned to complete the deal and record the gain by its March year-end but missed the deadline, prompting it to issue a profit warning for the period.
Centum’s chief executive James Mworia told the Business Daily that the transaction is now slated to be completed by July.
“The sale of GenAfrica is the pending transaction relating to the profit warning,” Mr Mworia said in an interview.
“The proceeds will be Sh2.3 billion and our cost is Sh1 billion, so we will have a gain of about Sh1.3 billion. This will be captured in the half year results.”
The profit warning means the Nairobi Securities Exchange-listed firm is expected to report maximum net earnings of Sh6.2 billion for the year ended March compared to Sh8.3 billion the year before.
Centum says the decline in earnings, which was also driven by relatively lower gains in its investment properties, is not expected to have an impact on the dividend payout. The company paid a dividend of Sh1.2 per share for the year ended March 2017.
The investment firm acquired the stake in the asset manager from Genesis Asset Managers LLP in 2013. GenAfrica has about Sh150 billion in assets under management.