Centurion Corp Ltd *Official* (SGX: OU8)

Shion

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Centurion plans to buy US student housing assets for US$136m, entering new market

Centurion plans to buy US student housing assets for US$136m, entering new market

http://www.straitstimes.com/busines...tudent-housing-assets-for-us136m-entering-new

SINGAPORE - Centurion Corp, which specialises in workers and student accommodation, said on Monday (July 24) it plans to enter the United States.

It plans to buy a portfolio of 1,936 beds in five student accommodation assets, across four US states, for about US$136 million (S$187 million).

The aim is to hold up to 30 per cent of the assets and the firm is speaking with third-party investors that will own the remaining stake.

Mainboard-listed Centurion will also set up an investment management platform to manage the portfolio assets on behalf of third-party investors.

The proposed acquisition will be completed around the end of September, said the company.

Centurion is looking at the properties in Auburn, Alabama; Tallahassee, Florida; Madison, Wisconsin, and College Station, Texas, which support US universities with good national rankings and sizeable student populations, the firm said.

For instance, the 624-bed Tenn Street property is near Florida State University, which has more than 40,800 students, and Tallahassee Community College, which has 12,500 students.

Two other assets at Madison, Wisconsin - one with 231 beds and another with 226 beds - are "a stone's throw away from the University of Wisconsin-Madison, which has a yearly enrolment exceeding 43,300 students".

Once the sale is completed, the five fully operational assets will be earnings accretive, or add to the group's earnings from the fourth quarter of 2017.

Centurion will also enter a joint venture with a US student accommodation manager to co-manage the assets under Centurion's student accommodation brand called dwell.

When the 1,936 beds from the US are added, Centurion will have 5,424 beds under management across 16 student accommodation assets in the US, Britain, Australia and Singapore.

Chief executive Kong Chee Min said: "The US is one of the key and established educational hubs in the world... and the proposed acquisition will immediately expand our business geographically and increase the earnings contribution from this resilient sector.

"It will also open a new business opportunity for Centurion, as we extend into the investment management of investments from like-minded investors."
 
Perisher

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luxcan said:
I should be selling it soon since reach my exit price. The amount of debts is increasing which I suspect that they might attempt to do a reits.
Click to expand...

Yup, the debt is a big negative. Hopefully, the acqusitions will be worth the debt.
 
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https://www.theedgesingapore.com/centurion-posts-72-rise-2q-earnings-145-mil
Centurion Corporation, which owns, develops and manages accommodation assets, has recorded a 72% rise in 2Q17 earnings to $14.5 million from a year ago.

In 2Q17, revenue rose 23% to $35.2 million, largely due to contributions from ASPRI-Westlite Papan and the inclusion of four student accommodation assets in the UK, which were acquired in July 2016.

In tandem with the higher revenue and lower cost of sales in 2Q17, Centurion’s gross profit increased by 36% year-on-year to $25.7 million, as gross profit margin improved by 7 percentage point to 73% in 2Q17.

For 1H17, the group also delivered an improved performance, having recorded a earnings of $26.0 million, 43% higher year-on-year, while first-half revenue grew 24% to $71.3 million.

The board has declared an interim dividend of 1.0 cent per share.

CEO Kong Chee Min says he remains cautiously optimistic of its workers accommodation business and its portfolio continues to enjoy healthy occupancy rates.

“Given the strong demand and high occupancy rates across our student accommodation assets, we maintain a positive outlook for our student accommodation business in the near term and will stay on the lookout for asset enhancement and investment opportunities in this resilient segment,” adds Kong.

In June, the group announced that it has submitted an application to the Stock Exchange of Hong Kong for the listing and permission to deal in its shares on the Mainboard.

Shares in Centurion closed at 53 cents on Monday.
 
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