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Centum FY2016 div comeback 1/- net profit +25%
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alotoftalk
#111 Posted : Thursday, June 09, 2016 5:54:14 AM
Rank: Member

Joined: 8/27/2015
Posts: 138
Location: Harare
Taking the focus away from the bonus to the results. My reading of the financial excerpts on the investor presentation and PY FS indicates that they're now consolidating Almasi for FY 16 after obtaining control on 31 March 2015.

1.What would be the effect of this going forward given that FCMG business is strongly linked to the economic cycles and maybe affected by the upcoming election?

2.Given the control date of 31 March 2015, the Almasi beverage sales were not included in the 2015 PnL but on the 2015 BS it was treated as a subsidiary. Question is was the Almasi operating cashflow included in the CF statement in 2015? Is there a good accountant who can assist me in understanding how the cashflows of Almasi were treated in FY 15 vs FY 16?
Investment philosophy development in progress...
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VituVingiSana
#112 Posted : Thursday, June 09, 2016 6:39:14 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
alotoftalk wrote:
Taking the focus away from the bonus to the results. My reading of the financial excerpts on the investor presentation and PY FS indicates that they're now consolidating Almasi for FY 16 after obtaining control on 31 March 2015.

1.What would be the effect of this going forward given that FCMG business is strongly linked to the economic cycles and maybe affected by the upcoming election?

2.Given the control date of 31 March 2015, the Almasi beverage sales were not included in the 2015 PnL but on the 2015 BS it was treated as a subsidiary. Question is was the Almasi operating cashflow included in the CF statement in 2015? Is there a good accountant who can assist me in understanding how the cashflows of Almasi were treated in FY 15 vs FY 16?


Almasi (Soft drinks and water) is in an industry that does OK in both good times and bad. A soda is an affordable luxury for many. Warren Buffett is a fan of Coke. It gives him dividends every year. If I had the ability or opportunity to buy shares in Almasi, I would do so...

I am not an accountant but I may be able to help. That said, if someone can help clarify/add/correct to my explanation, please do so.

If Almasi was "taken over" [50%+] on 31st March 2015 then it became a subsidiary on 31st March 2015. The P&L should have recognized the sales and profits from 1 Apr 2015. There should be an entry in the P&L (PAT) for "Minority Shareholders/Interests" and in the BS for "Minority Interests" under Shareholder Funds. The cashflow of a subsidiary flows through the Group's Cashflow Statement.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#113 Posted : Thursday, June 09, 2016 6:42:43 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Ericsson wrote:
7.5% and hakuna asset stripping Centum style

Does NSSF offer 7.5% annually?
Or does it change every year?
If GoK offers 13% on Tax-free Infrastructure Bonds then NSSF is conning you.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#114 Posted : Thursday, June 09, 2016 6:45:29 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
enyands wrote:
Who cares if employees get alot of bonuses if the shareholders are also rewarded the same. In centum the employees are rewarded more than their employers/shareholders. Warren Buffet is in usa we are in kenya so comparing the two is a Disneyland fantasy.

Bottom line is what they are doing doesn't feel right in my stomach.

Then sell. A maxim of Warren Buffett is that you should trust the management.
I do not buy GoK controlled firms (except KenRe) coz I do not trust those appointed by godfathers.

No KPLC, KenGen, KQ, NBK and even KCB for me. No merali firms. No matu family firms.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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VituVingiSana
#115 Posted : Thursday, June 09, 2016 6:49:51 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Ericsson wrote:
GOK owns 23.6% of CENTUM via ICDC.Why can't they intervene and stop this madness and outright cannibalisation of this company by the leadership.
If they are intervening in KQ same should be made here before a shell is left and taxpayers are then told to foot the bill to bail it out.
During former president Kibaki's tenure Mworia and DJ would never have thought of giving out such obscene bonuses to employees whom we don't see anything extra-ordinary from them.

Centum makes money. It doesn't ask for a bailout.
KQ loses money. For years. Lots of it.

I would rather GoK stayed away from Centum.
GoK should also sell off (or not vote) shares in NBK, KCB, KQ, KenRe, etc.
Look at Safaricom where GoK isn't allowed to interfere by Vodacom. Now compare to KQ, NBK, etc.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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obiero
#116 Posted : Thursday, June 09, 2016 6:59:07 AM
Rank: Elder

Joined: 6/23/2009
Posts: 14,224
Location: nairobi
VituVingiSana wrote:
Ericsson wrote:
GOK owns 23.6% of CENTUM via ICDC.Why can't they intervene and stop this madness and outright cannibalisation of this company by the leadership.
If they are intervening in KQ same should be made here before a shell is left and taxpayers are then told to foot the bill to bail it out.
During former president Kibaki's tenure Mworia and DJ would never have thought of giving out such obscene bonuses to employees whom we don't see anything extra-ordinary from them.

Centum makes money. It doesn't ask for a bailout.
KQ loses money. For years. Lots of it.

I would rather GoK stayed away from Centum.
GoK should also sell off (or not vote) shares in NBK, KCB, KQ, KenRe, etc.
Look at Safaricom where GoK isn't allowed to interfere by Vodacom. Now compare to KQ, NBK, etc.

KQ badly needs GoK. I would not invest in KQ without govt significant holding

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Spikes
#117 Posted : Thursday, June 09, 2016 7:02:29 AM
Rank: Elder

Joined: 9/20/2015
Posts: 2,811
Location: Mombasa
obiero wrote:
VituVingiSana wrote:
Ericsson wrote:
GOK owns 23.6% of CENTUM via ICDC.Why can't they intervene and stop this madness and outright cannibalisation of this company by the leadership.
If they are intervening in KQ same should be made here before a shell is left and taxpayers are then told to foot the bill to bail it out.
During former president Kibaki's tenure Mworia and DJ would never have thought of giving out such obscene bonuses to employees whom we don't see anything extra-ordinary from them.

Centum makes money. It doesn't ask for a bailout.
KQ loses money. For years. Lots of it.

I would rather GoK stayed away from Centum.
GoK should also sell off (or not vote) shares in NBK, KCB, KQ, KenRe, etc.
Look at Safaricom where GoK isn't allowed to interfere by Vodacom. Now compare to KQ, NBK, etc.

KQ badly needs GoK. I would not invest in KQ without govt significant holding



GoK involvement comes with consequences including conversion of debt to equity and political expediency.
John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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target1360
#118 Posted : Thursday, June 09, 2016 7:08:03 AM
Rank: Member

Joined: 5/14/2014
Posts: 289
Location: nairobi
is this company so awash with cash till they couldnt wait for 2019 to issue a dividend.
Did they have to sell the mall,Aon to pay dividends
I find satisfaction in owning great business,not trading them
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alotoftalk
#119 Posted : Thursday, June 09, 2016 7:09:18 AM
Rank: Member

Joined: 8/27/2015
Posts: 138
Location: Harare
VituVingiSana wrote:
alotoftalk wrote:
Taking the focus away from the bonus to the results. My reading of the financial excerpts on the investor presentation and PY FS indicates that they're now consolidating Almasi for FY 16 after obtaining control on 31 March 2015.

1.What would be the effect of this going forward given that FCMG business is strongly linked to the economic cycles and maybe affected by the upcoming election?

2.Given the control date of 31 March 2015, the Almasi beverage sales were not included in the 2015 PnL but on the 2015 BS it was treated as a subsidiary. Question is was the Almasi operating cashflow included in the CF statement in 2015? Is there a good accountant who can assist me in understanding how the cashflows of Almasi were treated in FY 15 vs FY 16?


Almasi (Soft drinks and water) is in an industry that does OK in both good times and bad. A soda is an affordable luxury for many. Warren Buffett is a fan of Coke. It gives him dividends every year. If I had the ability or opportunity to buy shares in Almasi, I would do so...

I am not an accountant but I may be able to help. That said, if someone can help clarify/add/correct to my explanation, please do so.

If Almasi was "taken over" [50%+] on 31st March 2015 then it became a subsidiary on 31st March 2015. The P&L should have recognized the sales and profits from 1 Apr 2015. There should be an entry in the P&L (PAT) for "Minority Shareholders/Interests" and in the BS for "Minority Interests" under Shareholder Funds. The cashflow of a subsidiary flows through the Group's Cashflow Statement.


To clarify; I fully understand the transaction from a PnL and BS perspective i.e. consolidate from date of control. In terms of operating cashflows, since these are generated from operations i.e PnL. What is the treatment of cashflows, specifically operating CF where the PnL was zero at the date of control?

For Coke, Pepsi and Co, their bread and butter is becoming less and less soda due to the health wave sweeping in major markets. Kenya is an exception currently but this will catch up.

The volatility on Almasi will arise from cost of inputs rather than from the revenue side. They import most of the inputs (concentrate, aluminium cans etc) from the mother-ship and other suppliers abroad unlike Coke in the US. So forex losses, disruption of transportation etc come into play.
Investment philosophy development in progress...
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  | | Edit by user: Thursday, June 09, 2016 7:14 AM | Reason: Comment on Almasi
Aguytrying
#120 Posted : Thursday, June 09, 2016 7:12:52 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
GoK owns 23% of centum? There's is the missing piece of the jigsaw puzzle.
The investor's chief problem - and even his worst enemy - is likely to be himself
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