Following its listing, CAREIT’s gearing of about 31% offers a headroom of $559 million, while Centurion Corporation retains strategic unitholding and right of first refusal (ROFR) rights of over $2.6 billion pipeline assets, which will support future asset injections and a potential re-rating in valuation, Ng adds.
In FY2024 ended Dec 31, 2024, Centurion Corporation reported a revenue of $253.6 million, 22% higher y-o-y, sustaining a compound annual growth rate (CAGR) of 24% since FY2021 thanks to rental escalation and capacity expansion, notably the launch of its purpose-built worker accommodation (PBWA), Westlite Ubi.
The company’s core business profit surged by 45% y-o-y to $110.8 million with gross margins up by 500 basis points (bps) to 77% on operating leverage.
In 1HFY2025, Centurion’s revenue rose by 13% y-o-y to $140.7 million while core net profit increased by 22% y-o-y to $65.4 million.
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To Ng, the company’s revenue visibility remains strong with a pipeline of 6,100 beds, which includes Westlite Toh Guan and Westlite Mandai, which will add 1,764 beds and 3,696 beds respectively, as well as a 722-bed purpose-built student accommodation (PBSA) in Sydney.
Expectations of a dip in revenue in FY2026 will reflect the deconsolidation of the REIT and not weaker operations as fee income and distributions emerge as new growth levers, says the analyst.
“[Centurion Corporation’s] pivot toward an asset-light, fee-based model enhances returns and supports sustained multiple expansion,” he notes.
Shares in Centurion closed 1 cent higher or 0.73% up at $1.39 on Oct 6.
