SINGAPORE (Sept 10): David Loh Kim Kang and Han Seng Juan, two of the controlling shareholders of accommodation provider Centurion Corp, have been increasing their direct stakes in the company via a series of purchases on the open market, as the company’s share price hovers around its 52-week-low.
On Aug 31, Han, who is Centurion’s non-executive director, bought 494,500 shares at an average price of 42.737 cents, bringing his direct stake to more than 20.7 million shares. His deemed stake remains at just over 453.7 million shares. The total of 474.4 million shares translates into a 56.426% stake in the company, up from 56.367% previously.
Han’s deemed stake is held via an entity called Centurion Global, which he jointly controls with his maternal cousin Loh, also a non-executive director of the company. The shares in the listed Centurion are held via Centurion Properties, which is a subsidiary of Centurion Global.
Loh has been buying shares as well. His most recent purchase was on Aug 30, when he bought 101,400 shares at an average price of 41.993 cents. That brings Loh’s direct stake in the company to 28.6 million shares, or 3.402%. His total stake has been raised to nearly 474.6 million shares, or 56.443%.
In the last two weeks of August, Han and Loh bought Centurion shares on several occasions. Both paid between 42 cents and 43.5 cents a share, which is about 20% off the company’s book value. As at June 30, Centurion’s net asset value was 55.7 cents a share, up slightly from 55.06 cents as at Dec 31, 2017. Year to date, Centurion shares have lost 17.2% to close at 43 cents on Sept 5, which values the company at 11.4 times historical earnings. At this level, Centurion shares are trading near their 52-week low of 40 cents reached on Aug 29.
Loh and Han, former remisiers, are better known as the “A-Team” of UOB Kay Hian. They were the rainmakers for dozens of Singapore Exchange listings of China-based companies before the sector turned sour. They have since diversified into property development and other investments, including Centurion Corp, which they took over in 2011 via a reverse takeover of optical disk maker SM Summit.
While the company’s focus has since moved to students’ and workers’ dormitories, the legacy optical disk business is still profitable. In fact, for the most recent 2Q ended June 30, the disk drive segment posted improved earnings of $158,000, up 84% y-o-y from $86,000 in the year-earlier quarter.
For the three months ended June 30, the company posted a 14% y-o-y drop in revenue to $30.4 million, as it no longer enjoyed revenue from one of the dormitories following the expiration of its lease at end-2017. During the same period, earnings fell 29% y-o-y to $9.8 million, as Centurion had to account for the higher financing costs of a bond issue, as well as higher administrative costs.
To date, Centurion has built a diversified portfolio of properties across Malaysia, Australia, the UK, the US and Singapore. Its home market is currently the largest in terms of number of beds, with a total of 26,100 beds as at end-2QFY2018. An additional 332 beds are in the pipeline. Malaysia has a total of 23,700 beds and an additional 12,700 have been earmarked in properties now under construction or planned. That will make Malaysia Centurion’s largest market in terms of capacity. The company has 2,143 beds in the US. In Australia, it has 456 beds with an additional 440 either planned or under construction.
Centurion is active in the UK too. It recently completed the £18.7 million ($33 million) purchase of a 127-bed freehold property in Manchester. This purchase has brought the company’s total number of beds in the UK to 2,543.
