The Capital Markets Authority yesterday confirmed that Centum Investment Company Ltd will receive a fine for failing to give a profit warning for this year’s half-year results, a report in the Business Daily said yesterday.
Centum’s official financial statements for the year ended 31st March 2012 available on the company website show the company’s profit after tax declined 48% to Ksh1,189,405 from Ksh2,292, 383 for the year ended 31st March 2011.
The CMA had given Centum two days to explain why it never issued a profit warning for these declined profits but Centum claimed it was difficult to issue a profit warning as valuations on its real estate investments only came in after the end of the financial year, the Business Daily reported yesterday.
The Capital Markets Authority requires company’s listed on the Nairobi Securities Exchange to issue a profit warning where: ‘…there is a material discrepancy between the projected earnings for the current financial year and the level of earnings in the previous financial year’ according to the regulator’s Securities, Public Offers, Listing & Disclosures Regulations (2002) website document.
Centum’s CEO James Mworia announced the company’s reduced profits on Tuesday last week at an investor’s briefing. On the same day, Bloomberg data shows the share dropped 10% from KES 14.75 to close at KES 13.30.
The same data shows that the share lost 35 cents yesterday to close at KES 13.40 from KES 13.75 on Tuesday. Since yesterday’s confirmation that Centum will be fined, the company’s share has lost a further 4.48% down to KES 12.80 from KES 13.40 yesterday at today’s NSE trading according to data from myStocks.
Centum Investment Ltd is Kenya’s largest investment company.