Centurion Corp Ltd’s Latest Earnings: What Investors Need to Know
Centurion Corp Ltd (SGX: OU8) owns and operates workers and student accommodation assets, as well as a storage disc manufacturing business. Its workers accommodation assets are managed under the Westlite brand while its student accommodation assets are managed under the dwell brand.
Yesterday, the firm announced its earnings for the second-quarter of 2017 (2Q 2017). The financial period was from 1 April 2017 to 30 June 2017.
Here’s a quick rundown on the financial figures from the latest quarter:
1. Revenue in 2Q 2017 climbed 23% year-on-year to S$35.2 million.
2. Meanwhile, net profit rose 3% year-on-year to S$9.1 million.
3. Earnings per share for the quarter was at 1.23 Singapore cents, up from 1.19 Singapore cents in 2Q 2016.
4. As of 30 June 2017, Centurion had S$580.3 million in net debt. This is a deterioration from the S$577.9 million in net debt that it had on 31 December 2016.
5. The gearing ratio for the quarter stood at 62%. The firm calculates gearing ratio by taking borrowings and dividing it by total capital. Total capital is calculated as borrowings plus net assets of the group.
6. Cash flow from operations was at S$14.0 million and S$9.5 million was spent on capital expenditure. Therefore, the firm brought in S$4.5 million in free cash flow for the latest quarter, a vast improvement from the negative S$1.1 million brought in a year ago.
The growth in revenue for 2Q 2017 was mainly due to contributions by ASPRI-Westlite Papan, a workers accommodation in Singapore which obtained its temporary occupation permit in May 2016, and the inclusion of four student accommodation assets in the United Kingdom, which were acquired in July 2016.
As at 30 June 2017, the five workers accommodation assets in Singapore maintained an occupancy rate of approximately 92%.
Meanwhile, in Malaysia, the six workers accommodation assets saw an improvement in the overall occupancy rate to about 82%. This uptick comes on the back of intensive marketing efforts by the firm, together with the Malaysian government gradually allowing hiring of foreign workers.
In the UK, Centurion’s eight purpose-built student accommodation (PBSA) assets, which operate under the dwell brand, saw an overall occupancy rate of over 95%.
The firm said the following about its student accommodation assets in Australia:
“In June 2017, the Group completed the acquisition for a development site in Adelaide which will be developed into a 280-bed PBSA – dwell Adelaide. This asset is expected to be completed in 2018, ahead of the student intake of the 2019 academic year. During May 2017, the Group also embarked on an asset enhancement programme (“AEP”) for RMIT Village, for the development of a new wing which is expected to add up to 160 beds to its current capacity. Upon the completion, dwell Adelaide and the AEP at RMIT Village will bring the total number of PBSA beds in Australia to 896 beds.”
Shareholders will receive an interim dividend of 1.0 Singapore cent per share, unchanged from a year ago.
Centurion earlier announced plans to acquire a combined portfolio of five student accommodation assets in the United States.
The firm said that this is “expected to be completed on or about the end of September 2017” and that the “proposed acquisition, subject to a number of conditions and satisfactory due diligence, will be earnings accretive to the Group’s earnings in the fourth quarter of 2017”.
On 27 June this year, Centurion submitted an application to the Stock Exchange of Hong Kong Limited for its shares to be dual-listed on the stock exchange.
Shares of the company closed at S$0.53 yesterday. This translates to a trailing price-to-earnings ratio of around 13 and a dividend yield of 3.7%.