Centum CEO sets new targets after 10 years at the helm
Centum Investments chief executive James Mworia stepped into the company’s corner office in October 2008 when the firm held assets worth Sh6 billion. Ten years later, the balance sheet now stands at Sh67 billion. At 41, the soft-spoken executive, who swiftly mastered the art of growing money at Centum when he was given half a chance as an intern, has grand goals for the firm. The Business Daily caught up with the trained lawyer to reflect on his 10-year tenure as Centum CEO. Excerpts:
YOU TOOK OVER WHEN CENTUM MANAGED ASSETS WORTH SH6 BILLION
It has been an incredible journey. When I came in my cash (capital) was exactly Sh10 million and my overdraft was Sh169.9 million. We never got a shilling of cash from any shareholder. What the shareholders said is that we want to earn this return but we don’t have any money to give you. They said whatever you make don’t pay us a dividend. The first five years we exceeded our goals to move our assets to Sh22 billion. We will be at 70 per cent of target at the end of 2019. The staff were eight people and they now stand at about 160. We have had our highs and lows.
WHAT IS YOUR WORST EXPERIENCE AT THE HELM?
I have had many. One of our golden rules is to deliver on promises. My worst moment is when we committed to a date (of completing the Two Rivers Mall project) and twice we postponed. Personally that was my lowest moment. My mantra is you should always strive to deliver regardless of whatever problem or challenges you had. For me it’s personal. When we failed on the deadline I moved my office to Two Rivers until the day we opened.
THERE HAS BEEN SPECULATION ABOUT CENTUM’S LIQUIDITY, WHAT IS THE TRUE POSITION?
I’m not aware about such perceptions. We are working on the objective of retiring our debt earlier. Our focus is to be debt-free in the next eight months. The only bond we have outstanding is the Sh6 billion that is maturing in 2021. But there is a possibility of paying it earlier. We are working on an objective of retiring our facilities earlier and we are doing it through the exits. Our business is to invest, create value and to exit again. My focus is take Centum to a point where unless there is a catastrophe it is going to remain a strong organisation in this economy for a century. One of the objectives to get there is to make sure the balance sheet is very strong. Going forward we will now just fund our activities with internally generated funds.
SOME OF CENTUM’S LARGE-SCALE PROJECTS HAVE SOAKED UP MUCH OF YOUR CAPITAL, HOW DO YOU PLAN TO KEEP FUNDING FUTURE DEVELOPMENTS?
I think people don’t understand how we are able to fund many of our projects simultaneously. When we conceived the Two Rivers Mall project we didn’t have the money to execute the whole project. But we had the idea and we could execute it and then we were able to attract other equity investors. That way each project is able to stand on itself with other equity investors. That’s our model. That calls for the local partner to be someone who keeps their word. We have not had litigation in the past 10 years we have been carrying out projects.
BUSINESS TYCOON AND CENTUM CHAIRMAN CHRIS KIRUBI LOOMS LARGE OVER CENTUM. IN FACT SOME OBSERVERS SEE HIS IMAGE AS BIGGER THAN CENTUM. IS CENTUM BIGGER THAN KIRUBI?
I have worked with Mr Kirubi for a long time. He has a big reputation. He has a lot of experience. Leadership is never about one person. In the world of experience there are many factors known or unknown that can affect business. CK (Chris Kirubi) has been a very good partner at the decision making point. If you think about who is one of the most successful investors of our time in this market, if you would say the top three, I’m sure Kirubi features there. If CK was not there I don’t think these successes I have been talking about would have been possible.
WHAT IS HIS FUTURE AT CENTUM?
What happens with time is that your success as a leader is to replicate yourself. Today if you ask Kirubi the last time we saw things differently could be eight years ago. My conclusion and his, independently, will rarely be different. His future is here. There is a bit of him now in all of us. So his future is here. He doesn’t need to come here, for what he would have done even if he is not here it is what exactly we would have done. And eventually even if I am not here, I would have left an imprint of me in the people I leave.
My focus is take Centum to a point where unless there is a catastrophe it is going to remain a strong organisation in this economy for a century”
YOU HAVE A DIVERSE PORTFOLIO, WHAT IS THE PHILOSOPHY OF YOUR INVESTMENTS?
When picking the sectors we asked what the most pressing issues in our region are. Successful investment is being able to identify the need correctly and address it. The sectors we are in include manufacture of fast-moving consumer goods, which has ended up to be a theme of the government’s Big Four. We had identified financial services, manufacturing, agriculture and real estate, which is captured in affordable housing as well as infrastructure. We are not looking at additional sectors. We are sticking to our seven sectors because the economy has not moved to other sectors.
WHAT IS THE STATUS OF THE PRIVATE EQUITY FUND YOU WANT TO LAUNCH?
It is work in progress. And really the objective is not the fund. The objective is to generate a superior return in our private equity portfolio. The fund is a means to an end. It is a means of pulling other people’s capital together so that we can invest in larger companies that we on our own may not have capacity to take significant risk in. Our key return is from the companies we invest in. The key thing investors want is a track record. We have interest from investors but also people want to invest with them.
WHAT IS THE STATUS OF OCCUPANCY AT TWO RIVERS MALL? It is currently at around 70 per cent. WHAT IS THE STATUS OF YOUR LAMU COAL-FIRED POWER PLANT?
It is ongoing. It is largely driven by our partners in the implementation, Gulf Energy. But that’s the nature of these projects, they take time.
CENTUM INVESTED MORE THAN SH3 BILLION TO ACQUIRE A 77.1 PER CENT STAKE IN SIDIAN BY BUYING OUT FOUNDER SHAREHOLDERS AND PARTICIPATING IN NEW CAPITAL INJECTIONS MEANT TO STEADY THE LENDER. SIDIAN HAS BEEN MAKING LOSSES AMID LOAN DEFAULTS. WHAT IS YOUR OUTLOOK FOR THE LENDER?
It reported losses in 2018 but the fundamentals are improving. Their deposit book went up by more than 30 per cent. Their non-funded income has increased significantly.
WHAT IS YOUR OUTLOOK FOR THE NEW YEAR?
It will be a good year.
Centum Investments CEO James Mworia.