See: Centurion announces 4Q earnings of $5.9 mil after adjustments
“Centurion’s 4Q17 topline decreased 4% y-o-y, mainly due to the expiry of the lease for Westlite Tuas on Jan 30. The dormitory was fully vacated by Dec 3, 2017,” says analyst Jarick Seet in a Thursday report.
“In the meantime, its Toh Guan facility recorded a lower bed capacity, as the bed count was reduced by 808 units,” he adds.
RHB is keeping its “neutral” call on dormitory operator Centurion Corp with an unchanged target price of 47 cents.
“Going forward, management aims to continue expanding into investment management services, as well as ramp up the occupancy rates in its Woodlands and Papan worker dormitories,” Seet says.
In 4Q17, the group also launched its maiden private fund, the Centurion US Student Housing Fund, and acquired six assets across five states in the US.
“Management aims to expand the fund and acquire more assets going forward – which would boost the group’s management fee income,” Seet says.
He also notes that Centurion’s asset enhancement programme for the development of a new wing at RMIT Village – its first student accommodation asset in Melbourne, Australia – is on track.
The enhancement works, at a total development cost of A$30 million ($30.9 million), are expected to be completed in the fourth quarter of 2018, ahead of the 2019 academic year.
Upon completion, the new wing, an 11-storey building comprising studios, four-bedroom, and five-bedroom en-suite apartments, will add up to 160 beds.
See: Centurion starts building of $31 mil new wing at RMIT Village
“However, FY18 earnings may likely be impacted by the absence of the Tuas facility’s contributions to its numbers,” Seet adds.
As at 12.51pm, shares of Centurion are trading half a cent lower at 51 cents, implying an estimated price-to-earnings ratio of 11.5 times and a dividend yield of 2.8% in FY18.
