KGI Securities (Singapore) Pte. Ltd. April 11, 2025
Centurion Corp Ltd: Strong Growth Trajectory and Strategic Expansion
Company Overview
Centurion Corp Ltd, a leading provider of accommodation solutions, has demonstrated a strong performance in FY24, highlighting its resilience and solidifying its long-term growth trajectory. The company’s strategic initiatives, including a potential REIT listing and proposed share buyback, further enhance its value proposition.
Financial Highlights
Revenue increased 22.4% YoY to S$253.6 million, driven by high financial occupancy and rental rate uplifts across all key markets.
Net profit after tax surged 118% YoY to S$382.6 million.
Gross profit grew 27% YoY to S$101.5 million, underpinned by sustained high occupancy and positive rental revisions.
Operational Performance
Centurion operated 69,929 beds across 37 assets with AUM of S$2.5 billion as of December 31, 2024.
The company added 2,552 new beds and has 7,662 beds under development for 2025-2026, including a new PBSA in Macquarie Park, Australia.
Strategic Initiatives
Potential REIT Listing: Centurion is exploring a potential REIT structure comprising stabilized PBWA and PBSA assets in mature markets like Singapore, Malaysia, and the UK. This could unlock asset value, enhance capital recycling, and deliver stable income for shareholders via a potential dividend-in-specie.
Proposed Share Buyback: A proposed share buyback mandate (up to 10% of the total number of issued shares), pending approval, further underscores management’s confidence in the Group’s intrinsic value and ability to deliver earnings-accretive returns.
Market Analysis
Structural Demand: Centurion is strategically positioned to capitalize on strong, structural demand for affordable, compliant accommodation across its core segments, Purpose-Built Workers’ Accommodation (PBWA) and Purpose-Built Student Accommodation (PBSA).
Regulatory Reforms: Ongoing regulatory reforms, including the Dormitory Standards 2040, are accelerating the shift toward high-quality PBWA operators.
Geographic Performance
Singapore: Revenue increased 22.7% YoY to S$90,973, driven by high occupancy and rental rate uplifts.
Malaysia: Revenue grew 1.8% YoY to S$9,727, despite a slight dip in PBWA occupancy due to short-term foreign worker caps.
Australia: Revenue increased 6.5% YoY to S$8,621, driven by strong rental performance and high occupancy.
Financial Discipline
Centurion’s financial resilience and prudent capital management provide a solid foundation for sustainable growth and strategic expansion.
The company reduced total borrowings from S$657.4 million to S$623.5 million YoY, resulting in a significant decline in its net gearing ratio to 29%.
Valuation
KGI Securities maintains an OUTPERFORM recommendation with a raised target price of S$1.38, underpinned by Centurion’s strong FY24 performance and supported by higher-than-expected rental reversions across its PBWA and PBSA segments.
Financial Tables
Financials
Year Revenue (S$’000) PATMI (S$’000) EPS (cents) DPS (Sing cents)
2023 207,245 175,913 20.92 2.5
2024 253,616 382,636 45.51 3.5
2025F 292,890 263,224 31.69 3.8
2026F 328,082 248,613 29.93 3.6
2027F 327,193 293,819 35.28 3.9
Key Ratios
Dividend Yield: 3.6% (2024), 3.4% (2025F), 3.2% (2026F), 3.4% (2027F)
NAV per share (SGD cents): 146.9 (2024), 175.7 (2025F), 203.0 (2026F), 235.1 (2027F)
Price/NAV (x): 0.3 (2024), 0.6 (2025F), 0.6 (2026F), 0.5 (2027F)
Conclusion
Centurion Corp Ltd presents an attractive opportunity to gain exposure to a defensive, cash-generative asset class with consistent returns. The company’s strong FY24 performance, strategic initiatives, and prudent financial management position it for long-term growth and shareholder value creation.