Cytonn Investments Management Plc released their audited financial statements for the Group for the year ended 31st December 2017, delivering a strong growth, with profitability growing by 276.7% to Kshs 398.0 mn in 2017 from Kshs 105.7 mn in 2016. Profitability was driven by strong revenue growth arising from projects construction progress and the realization of gains from investments in the stock market.
Balance sheet growth was also robust, with total assets growing by 49.4%, to Kshs 17.7 bn as at 31st December 2017 from Kshs 11.8 bn as at 31st December 2016. The growth in total assets was driven by (i) strong growth in the real estate projects under mandate, with Investment Property growing by 20.8% to Kshs 10.8 bn in 2017 from Kshs 8.9 bn in 2016, (ii) investments in financial services through our quoted Private Equity Investments, which delivered Kshs 342.1 mn to the firm in revenue in 2017, and (iii) growth in real estate sales and product uptake.
“The financial year 2017 was characterized by a tough economic environment for businesses in Kenya, brought about by low credit growth to the private sector, which hit a low of 2.4% in 2017, and the prolonged electioneering period. With our commitment to deliver attractive returns to all stakeholders, we saw this as an opportunity to invest in our growth while the rest of the market was distracted and businesses were on a slow. The investments made by the firm can be bucketed into three key areas: first was the continued investment in our ongoing projects, and the acquisition of assets at attractive valuations, in both real estate and financial services; these included investments in our latest Kilimani development, while also actively trading listed financial services counters, namely KCB Group and NIC Group. Second was the investment in our diversification strategy, as we expand into complimentary businesses for our real estate, such as education and hospitality. Diversification was also achieved through growth in the region, with the opening of our Mt. Kenya Office in Nyeri. Third was the investment in our future, through growth of staff, with a focus on filling key management positions, and the growth in our distribution network” said Edwin H. Dande, Cytonn’s Chief Executive Officer.
“In real estate, our main business area, the total value of projects under mandate grew to Kshs 82 billion across 10 investment ready projects. Two of our projects broke ground in the year 2017, namely Taraji Heights, a mixed-use development that sits on a 2.8-acre piece of land valued at Kshs 2.5 bn in Ruaka, and The Ridge, a comprehensive mixed-use development worth Kshs 12.0 bn, which sits on a 10.0-acre parcel of land in Ridgeways. In the year 2017, we launched real estate projects in the market worth Kshs 35 bn. These were RiverRun Estates, a master-planned mixed-use development set on 100-acres, in the heart of Ruiru, valued at Kshs 15 bn, and our Kshs 20 bn Kilimani-based iconic mixed-use development project, Cytonn Towers. We continue with the development and construction of the rest of the projects, among them being The Alma in Ruaka” said Elizabeth N. Nkukuu, Cytonn’s Chief Investment Officer.
“We continue to make investments in our strategic support services; and continue to make significant investments in technology. All these resulted in strong financial performance for the group, with Total Assets growing by 49.4% to Kshs. 17.7 bn as at 31st December 2017, from Kshs 11.8 bn the prior year, and profitability growing by 276.5% to Kshs. 398.0 mn for FY’2017, from Kshs 105.7 mn for FY’2016. Total Assets Under Management grow by 32.2% to Kshs 13.8 bn at the end of 2017 from Kshs 10.4 bn in 2016. The bulk of the growth in earnings and assets were driven by our investments in both quoted equities and real estate” noted Alex Magu, Ag. Financial Controller for Cytonn, during the Annual General Meeting held at Radisson Blu Hotel, Upper hill.
“Revenue from sale of our real estate developments increased by 92.7% to Kshs. 612.6 million for the period ending 31st December, 2017, from Kshs. 317.9 million reported in the prior year. This was as a result of increased uptake in our real estate developments and speedy construction progress. Our Investment Property in real estate projects and investments in quoted stocks that we held until the end of the year had fair value gains increase by 60.6% to Kshs. 886.0 million for the period ended 31st December 2017, from Kshs. 551.6 million recorded in the previous year. Notably, the Group’s Other Income increased by 681.0% to Kshs. 362.4 million from Kshs. 46.4 million recorded in the previous year. This was driven by income realized from our investments in quoted stocks at Kshs. 238.9 million, and dividends received at Kshs. 103.2 million for the period ended 31st December 2017. With the objective of seeking long term capital appreciation and attractive returns in financial services, the Group through our quoted private equity initiative has continued to build significant stakes in the financial services sector, through investments in KCB Group and NIC Group. In NIC Group, we are currently the fifth largest shareholder. This performance highlights the attractive investment opportunity in real estate and financial services in the region” added Alex Magu.
“We continued to build a strong track record led by a prudent business strategy and a strong corporate governance structure, the Group has remained on course with its strategy of providing financial solutions with above average returns. The Group has positioned itself as a market leader in the real estate industry by working to deliver aspirational real estate products in all segments of the market.” said Prof. Mugendi, Cytonn’s Board Chair. “So as to ensure that we are focused on the clients’ interests, we have put in place proper governance structures, with a Board of Directors consisting of members from diverse backgrounds, each bringing in unique skill-sets to the firm” added Prof. Mugendi.
Cytonn Investments is an independent investment management firm, with offices in Nairobi – Kenya and D.C. Metro – U.S. We are primarily focused on offering alternative investment solutions to individual high net-worth investors, global and institutional investors and Kenyans in the diaspora interested in the high-growth East-African region. We currently have over Kshs. 82 billion of investments and projects under mandate, mainly in real estate.