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Centurion Corp

Joelton
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24-Aug-2020 09:14

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Centurion Corporation

Between Aug 13 and 17, Centurion Corporation non-executive director Han Seng Juan increased his interest in Centurion Corporation from 55.50 per cent to 55.61 per cent. The acquisitions saw him acquire 975,000 shares of the listed company for a consideration of S$344,225 at an average price of 35.31 cents per share.

This followed his acquisition of 550,000 shares at an average price of 35 cents per share on Aug 12.

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Starship
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13-Aug-2020 15:20

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Joelton ( Date: 13-Aug-2020 11:53) Posted:

Centurion, already under pressure, braces for greater impact of Covid-19

DORMITORY operator Centurion Corp is feeling the effects of Covid-19 on its business, but says the worst is yet to come.

On a call to discuss its H1 2020 results on Wednesday, the group said that it has seen increases in requests to review lease terms as well as for pre-terminations, rental deferrals, waivers, discounts and rebates.

Corporate communications head David Phey said there has also been a " slowdown" in rent collections, amid legislation put in place by various governments to assist tenants.

" We expect this to further increase especially as economies are seeing lockdown effects from Covid-19 measures," he added.

Mr Phey anticipated additional financial pressures on employers, such as the need to comply with safety regulations. " So we expect this to translate to employers being pressured in terms of the size of their workforce, in the accommodation needs for their workforce, and possibly affecting&hellip ability to pay for the rent of the workers' accommodation," he added.

Centurion has set aside a provision for doubtful debts of S$1.2 million.

Changes in the regulatory standards of purpose-built workers accommodation (PBWA) as announced by the government are also expected to affect the group, though the extent of the impact remains to be seen.

As for its purpose-built student accommodation (PBSA) segment, the group is seeing demand " pick up only quite slowly for the upcoming September semester" in Australia and the United Kingdom.

Given these various challenges, Centurion said it will pause expansion and development plans " until the Covid-19 situation normalises" .

Already, it has deferred the reconstruction of an existing block at a local PBWA, and put on hold the development of an additional 3,600 beds in another PBWA in Malaysia.

Mr Phey added that the group will " not be exploring new acquisitions or developments or enhancements projects, but will still consider opportunities if they are very attractive and sensible during this time" .

For now, Centurion said it will focus on " strengthening operations and management capabilities, especially looking at how to keep costs down&hellip and conserve cash resources" , and will tap into relief packages offered by various governments. It has also approached its bankers for moratoria on principal repayments and for additional working capital facilities.

As part of its cash conservation policy, the group did not declare an interim dividend for its first half when it announced its results on Aug 12.

For H1 ended June 30, Centurion saw its year-on-year profits rise 16 per cent to S$21.01 million. Earnings for Q2, however, declined by 10 per cent to S$9.13 million.

The weakness was attributed partially to additional operating expenses, particularly for its Singapore PBWA operations. Also affecting the bottom line were early lease terminations for student accommodation in the UK starting from May 1, and lower occupancy in its Australia PBSA.

Mr Phey said the group believes the demand and supply will stabilise for the PBWA segment, and that " demand for foreign workers and accommodation needs will remain strong, on top of the government initiative to develop new beds" .

He added: " Our proven track record (and) our management capabilities during this time have put us in good position to participate in opportunities to tap opportunities within the sector as the new dormitories are developed."

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Joelton
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13-Aug-2020 11:53