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Centum FY2016 div comeback 1/- net profit +25%
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researchfirst
#161 Posted : Friday, June 10, 2016 11:11:19 AM
Rank: Member

Joined: 2/24/2015
Posts: 154
Location: Nairobi
ngapat wrote:
researchfirst wrote:
ngapat wrote:
researchfirst wrote:
guru267 wrote:
Management paid themselves a bonus of less than 10% of PBT... What's the big deal? This is the market average isnt it???

This same management has worked their butts off to grow shareholder wealth over the years..

Some cry baby is selling shares because of that... All I say is Sayonara!!


I agree completely. All salaries, bonuses, etc. are, by definition, "at the expense" of owners. There is always a balance to be struck between who gets what. I think this balance is working, which is why I am an owner. For those of you who are not, Centum's share price has always tracked NAV closely. It is now trading at around 20% less than NAV per share. This is a no-brainer investment.

You could be creating wealth for share holders while unfairly stealing from them. Are they employees or fund managers?
Centum employees are paid salaries which i can assure are no peanuts and are in tandem with their contributions to the groups growth. I do agree on bonus payment for excellent results but their style of bonus pay is outright thuggery. The bonuses should be a fixed amount or a percentage of their salaries.
Awarding bonuses as a percentage of a company's profit can lead to enormous bonus figures and is simply doubling as an employee and a fund manager who are paid management fee based on portfolio returns.
Its unfair that bonuses to employees exceeds dividends to all shareholders.
As much as the employees credit themselves for the good performance, credit should also go to shareholders for providing the capital.
I see these employees becoming bigger than the company one day.


To date they have been very similar to fund managers so a fund manager-like bonus system makes sense. A fixed amount bonus does not, it creates no incentive for maximum performance 'just good enough to get the bonus' performance. The hurdle rate model works globally and it looks like it is working at Centum. As the company shifts its focus to more of a conglomerate style group, the bonus system will probably need to be rethought.

As for the shareholder credit for providing capital, see my post on the NAV per share relative to market price. The reward will come.


The NAV was criticized here as it can easily be manipulated by revaluation of assets like land. Centum has been exiting some of their investments and booking capital gains driving the NAV up. Some of these investments were bought even before some employees joined the company and they are taking credit for them.
I would prefer ROA and ROE.


You don't like NAV? Fine. Look at ROE and ROA, which are both strong. Use a residual income approach or a relative valuation and you will still come to the conclusion that Centum is undervalued. No matter how you go about running the numbers, you will come to the same conclusion on value.
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Spikes
#162 Posted : Friday, June 10, 2016 11:13:44 AM
Rank: Elder

Joined: 9/20/2015
Posts: 2,811
Location: Mombasa
guru267 wrote:
ngapat wrote:
researchfirst wrote:
ngapat wrote:
researchfirst wrote:
guru267 wrote:
Management paid themselves a bonus of less than 10% of PBT... What's the big deal? This is the market average isnt it???

This same management has worked their butts off to grow shareholder wealth over the years..

Some cry baby is selling shares because of that... All I say is Sayonara!!


I agree completely. All salaries, bonuses, etc. are, by definition, "at the expense" of owners. There is always a balance to be struck between who gets what. I think this balance is working, which is why I am an owner. For those of you who are not, Centum's share price has always tracked NAV closely. It is now trading at around 20% less than NAV per share. This is a no-brainer investment.

You could be creating wealth for share holders while unfairly stealing from them. Are they employees or fund managers?
Centum employees are paid salaries which i can assure are no peanuts and are in tandem with their contributions to the groups growth. I do agree on bonus payment for excellent results but their style of bonus pay is outright thuggery. The bonuses should be a fixed amount or a percentage of their salaries.
Awarding bonuses as a percentage of a company's profit can lead to enormous bonus figures and is simply doubling as an employee and a fund manager who are paid management fee based on portfolio returns.
Its unfair that bonuses to employees exceeds dividends to all shareholders.
As much as the employees credit themselves for the good performance, credit should also go to shareholders for providing the capital.
I see these employees becoming bigger than the company one day.


To date they have been very similar to fund managers so a fund manager-like bonus system makes sense. A fixed amount bonus does not, it creates no incentive for maximum performance 'just good enough to get the bonus' performance. The hurdle rate model works globally and it looks like it is working at Centum. As the company shifts its focus to more of a conglomerate style group, the bonus system will probably need to be rethought.

As for the shareholder credit for providing capital, see my post on the NAV per share relative to market price. The reward will come.


The NAV was criticized here as it can easily be manipulated by revaluation of assets like land. Centum has been exiting some of their investments and booking capital gains driving the NAV up. Some of these investments were bought even before some employees joined the company and they are taking credit for them.
I would prefer ROA and ROE.


Is it not the current employees who enable Centum to exit its investments at a gain?

Both ROA and ROE are good for centum.


@guru267 How many Centum shares do you own?
John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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ngapat
#163 Posted : Friday, June 10, 2016 12:44:41 PM
Rank: Veteran

Joined: 12/11/2006
Posts: 930
Looks like DJ visits wazua
“Invest in yourself. Your career is the engine of your wealth.”
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  | | Edit by user: Friday, June 10, 2016 4:48 PM | Reason: Not specified
Ericsson
#164 Posted : Friday, June 10, 2016 8:47:51 PM
Rank: Elder

Joined: 12/4/2009
Posts: 10,808
Location: NAIROBI
DJ has beauties to check for him what's being discussed on wazua
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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enyands
#165 Posted : Friday, June 10, 2016 9:28:51 PM
Rank: Elder

Joined: 12/25/2014
Posts: 2,301
Location: kenya
Ericsson wrote:
DJ has beauties to check for him what's being discussed on wazua



Laughing out loudly Laughing out loudly Laughing out loudly
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VituVingiSana
#166 Posted : Friday, June 10, 2016 9:49:43 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Ericsson wrote:
DJ has beauties to check for him what's being discussed on wazua

Sharon Mundia and Susan Wong. Sickquot; Sickquot; Sickquot;
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Aguytrying
#167 Posted : Saturday, June 11, 2016 5:57:29 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
Anyone who doesn't think awarding employees a bonus of 1bn last year and 600mn this year is a red flag is either. An employee, naive, blinded by DJ ck moves.

This is just an excuse to siphon money out the company in broad daylight!! And legally.

Employee are employed to work and get a salary. A bonus if any should be fixed according to you job group if you meet certain very high targets. And should overall be a very small fraction of the profits. It should be an incentive NOT another SALARY!
The investor's chief problem - and even his worst enemy - is likely to be himself
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enyands
#168 Posted : Sunday, June 12, 2016 1:25:46 AM
Rank: Elder

Joined: 12/25/2014
Posts: 2,301
Location: kenya
Aguytrying wrote:
Anyone who doesn't think awarding employees a bonus of 1bn last year and 600mn this year is a red flag is either. An employee, naive, blinded by DJ ck moves.

This is just an excuse to siphon money out the company in broad daylight!! And legally.

Employee are employed to work and get a salary. A bonus if any should be fixed according to you job group if you meet certain very high targets. And should overall be a very small fraction of the profits. It should be an incentive NOT another SALARY!



Be careful Aguytrying or guru267 will call you a mourn baby if not crybaby...Pray
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Spikes
#169 Posted : Sunday, June 12, 2016 9:54:15 AM
Rank: Elder

Joined: 9/20/2015
Posts: 2,811
Location: Mombasa
enyands wrote:
Aguytrying wrote:
Anyone who doesn't think awarding employees a bonus of 1bn last year and 600mn this year is a red flag is either. An employee, naive, blinded by DJ ck moves.

This is just an excuse to siphon money out the company in broad daylight!! And legally.

Employee are employed to work and get a salary. A bonus if any should be fixed according to you job group if you meet certain very high targets. And should overall be a very small fraction of the profits. It should be an incentive NOT another SALARY!



Be careful Aguytrying or guru267 will call you a mourn baby if not crybaby...Pray


CK DJ and his Centum cronies are capitalising on the legal loopholes to enrich themselves. This must stop by reviewing company laws.
John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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mwanake99
#170 Posted : Wednesday, June 15, 2016 8:07:12 AM
Rank: Hello

Joined: 6/15/2016
Posts: 2
Location: Nairobi
Salamu kwa wazee, elders and veterans.
Anyone knows the book-closure-date for this dividend?
Am looking for an exit point.
I don't want top be too greedy.... Am already up 64% on capital gains.

Its time to harvest!!!! Anxious Anxious
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