KGI Securities (Singapore) Pte. Ltd. April 11, 2025
Centurion Corp Ltd: Strong FY24 Performance and Growth Prospects Drive Outperform Rating
Company Overview
Centurion Corp Ltd, a leading provider of purpose-built workers’ accommodation (PBWA) and purpose-built student accommodation (PBSA), has demonstrated a strong financial performance in FY24. The company’s revenue surged 22% YoY to S$253.6 million, driven by high financial occupancy and rental rate uplifts across all key markets. Net profit after tax jumped 118% to S$382.6 million.
Financial Highlights
Revenue Growth: Total revenue rose 22% YoY to S$253.6 million, driven by sustained high occupancy and positive rental revisions.
Net Profit: Net profit after tax surged 118% to S$382.6 million, driven by high financial occupancy and rental rate uplifts across all key markets.
Gross Profit: Gross profit grew 27% to S$101.5 million, underpinned by sustained high occupancy and positive rental revisions.
Operational Performance
Portfolio Expansion: Centurion operated 69,929 beds across 37 assets with AUM of S$2.5 billion as of 31 December 2024. The company added 2,552 new beds and has 7,662 beds under development for 2025-2026.
Geographical Revenue Breakdown: Revenue by geographical area:
Singapore: S$90,973 (22.7% YoY growth)
Malaysia: S$9,727 (1.8% YoY growth)
Australia: S$8,621 (6.5% YoY growth)
United Kingdom: S$19,323 (15.2% YoY growth)
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.
Strategic Expansion and Market Positioning
Diversified Multi-Segment Accommodation Provider: Centurion continues to evolve into a diversified, multi-segment accommodation provider, with strategic positioning across PBWA, PBSA, and its newest vertical, Build-to-Rent (BTR).
Robust Expansion Pipeline: The company has added 2,552 new beds and has 7,662 beds under development for 2025-2026.
Financial Discipline and Sustainability
Prudent Financial Structure: Centurion reduced its borrowings from S$657.4 million to S$623.5 million, leading to a significant decline in its net gearing ratio from 38% to 29%.
Healthy Cash Position: The company closed the year with a healthy cash position of S$89 million and access to S$150.4 million in unutilised committed credit facilities.
Valuation and Recommendation
Outperform Rating Maintained: We maintain our OUTPERFORM rating with a raised target price of S$1.38, driven by Centurion’s strong FY24 performance and growth prospects.
DCF Valuation: Our target price is derived from a discounted cash flow (DCF) analysis, using a terminal growth rate of 2.0% and a WACC of 5.0%.
Financials and Key Operating Statistics
Year 2023 2024 2025F 2026F 2027F
Revenue (S$’000) 207,245 253,616 292,890 328,082 327,193
PATMI (S$’000) 175,913 382,636 263,224 248,613 293,819
EPS (cents) 20.92 45.51 31.69 29.93 35.28
DPS (Sing cents) 2.5 3.5 3.8 3.6 3.9
Risks and Challenges
Prolonged Elevated Interest Rates: Centurion’s core operations are not directly affected by U.S. tariffs, but it remains exposed to broader macroeconomic headwinds that could weigh on accommodation demand and investor sentiment.
Medium-Term Macroeconomic Uncertainties: Heightened global trade tensions and potential tariff escalations may weigh on Singapore’s growth outlook in 2025.
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, potential REIT listing, and robust expansion pipeline drive our Outperform rating. We maintain a target price of S$1.38, underpinned by Centurion’s growth prospects and resilient accommodation growth.
