Centurion Corp Ltd Is Investing Again

Centurion Corp Ltd (SGX: OU8), well-known for its workers’ accommodation business, is expanding and diversifying further into its new business segment; student accommodation. Since 2014, the company has acquired RMIT Village in Melbourne, Australia, as its first step into the Student Accommodation business. Today, the company has student accommodation assets in Australia, United Kingdom, and Singapore.

Now it seems, Centurion Corp is planning to expand even further into this segment of business. This week, the company announced that it has a proposal to buy four more student accommodation assets in the United Kingdom. According to their announcement, the four assets are located in Manchester, Bristol, and Newcastle. In total, it will add an additional 519 beds to its portfolio, bringing its total student beds to 3,208. That is a 20% increase of its existing student accommodation portfolio.

However, in term of number of beds, its student accommodation segment is still quite a small segment. Its worker accommodation segment houses close to 50,000 beds and would be adding another 19,000 beds in the near future from three additional developments.

The proposed acquisition would cost about S$38.9 million. Centurion Corp would be financing the purchase with some external financing arrangement with its internal resources, which mostly include the proceeds from the issue of S$65 million Medium Term Note back in July 2015.

The company does not expect any change to its net tangible asset or dilution to its shareholders. Positively, the acquisition would add about 6% increase to Centurion Corp’s FY2015 earnings per share if it is added on a pro forma basis.

Foolish Summary

Centurion Corp Ltd has been aggressively acquiring student accommodation segment since 2014. With the new proposed acquisitions, the company is indicating to the public that it would want to make student accommodation one of its key business segments for the future as well.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim does not own any companies mentioned above.