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Here Are the Different Ways Centurion Corp Ltd Makes Money

Centurion Corp Ltd (SGX: OU8) is one of Singapore’s largest workers and student accommodation owner-operators. Investors in Singapore’s stock market may have noticed the company for the simple fact that it has been a big long-term winner – over the past five years, the company’s stock is up by 102.5%.

The company’s strong gains prompted me to dig in further to understand one thing: Its sources of revenue.

Here’s a table showing the revenue, profit, and profit margins of the company’s three business segments in 2016 and 2015:

Centurion segmental revenue breakdown
Source: Centurion 2016 full year earnings release

Workers Accommodation is clearly the largest revenue contributor to the company, accounting for 71% of Centurion’s total revenue in 2016. Under this segment, Centurion provides dormitory accommodation services to workers in Singapore and Malaysia. It was also the fastest grower in 2016, with revenue up by 19% in the year.

The next largest revenue contributor is Student Accommodation, which focuses on providing accommodation services to students in the United Kingdom, Australia, and Singapore. In 2016, the segment accounted for 27% of Centurion’s total revenue.

Optical Disc is the smallest segment within Centurion (just 2% of the company’s total revenue in 2016) and it focuses on the sale of optical discs and related data storage products. This segment’s revenue has been dwindling over the past few years as management has been scaling back its operations.

With the segmental breakdown of revenue done, let’s turn our attention now to a geographical breakdown of Centurion. This is important, given that the company sources revenue from a number of different countries.

Data on Centurion’s geographical revenue sources for 2016 is not available yet, so let’s have a look at its 2015 and 2014 numbers below:

Centurion geographical revenue breakdown
Source: Centurion 2015 annual report

We can see that Singapore and the United Kingdom were the two most important geographies for the company in 2015. A significant chunk of Centurion’s revenue (35%) in 2015 was sourced from outside Singapore, so that presents currency risks for investors.

By breaking down the revenue streams of Centurion, investors can better understand the risks and opportunities associated with the company’s business. This can help investors make more informed investment decisions.

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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 contributor Lawrence Nga doesn’t own shares in any companies mentioned.