Investment firm Cytonn posts Sh630m profit in first year of operation

Cytonn CEO Edwin Dande with chief investment officer Elizabeth Nkukuu. PHOTO | FILE 

By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com

Investment firm Cytonn has reported a Sh630 million net profit for the 12 months ending December 2015, the first full year of operation for the firm.

Cytonn said the profit was driven by its investments in the real estate sector, where the firm says it has 14 projects worth Sh73 billion in development on more than 1,200 acres.

These projects include The Alma in Ruaka, Situ Village and Amara gardens in Karen.

The firm reported revenue of Sh185.7 million for the year and operating expenses of Sh214.6 million, but an upward adjustment of Sh611.4 million in fair value of its real estate portfolio beefed up the earnings resulting in the Sh630 million net profit.

The company reported that its investment property is valued at Sh5.76 billion, which coupled with other investments and cash value its entire asset base at Sh6.53 billion.

“Our strategy to focus on the attractive alternative investment opportunities, which exist in Kenya and the region, drove our performance…focus on real estate, private equity and structured products has delivered attractive returns to our shareholders, clients and partners,” said Cytonn chief executive Edwin Dande.

Cytonn was founded in September 2014 by four former senior staffers at British-American (Britam) Asset Management (BAAM), comprising of the CEO Edwin Dande, chief investment officer Elizabeth Nkukuu, head of private equity and real estate Shiv Arora and head of legal Patricia Wanjama.

The company recently announced plans to branch out to the counties through a franchise model partnering initially with real estate firms in Mombasa, Kajiado, Kiambu, Machakos, Nakuru, Vihiga, Kericho, Migori and Trans Nzoia.

Cytonn offers the franchisees the use of its brand name and assistance in identifying, evaluating, structuring and financing real-estate projects.

In return, the real estate partners pay Cytonn a one-off fee of Sh1 million ($10,000) and an annual charge of six per cent of gross revenues, or alternatively Cytonn takes a stake of between 70 to 80 per cent in the projects, possibly climbing to 100 per cent.