Centum considers buying its share back

Centum Investment Group CEO James Mworia

Centum Investment Group CEO James Mworia during the company's half-year results and investor briefing on November 27, 2020. 

Photo credit: Salaton Njau | Nation Media Group

Centum Investment Group is considering acquiring some of its stake from shareholders in a stock buyback plan that could offer investors a chance to cash in on their investments.

Group Chief Executive Officer James Mworia said the company’s board of directors has requested a team to review the plans and give recommendations for consideration. 

“The board (Centum board of directors) has asked the Investment and Finance Committee to look critically at the prospect of a share buy-back. During Monday’s (Nov 29, 2021) meeting the committee was tasked to look at this and give a specific recommendation. Hopefully, this will help and give an exit route for the minority investors who wish to leave and allow those who want to stay the long-term to ride it out,” he said in an interview.

Share buybacks occur when an issuing entity pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors. 

Whereas Centum share price has slumped 3.7 per cent year-to-date, it has shed 12 per cent since November 9 alone as the firm grappled with adverse publicity over its growth prospects.

The management of Centum pegs the value of each of the company’s shares at Sh62.10 implying the current share price of Sh15.45 is just about 25 per cent of what it deems to be the intrinsic value.