Centurion - RHB Invest 2024-03-05: More Positive On Operating Leverage; Keep BUY

• We remain positive on Centurion Corp (SGX:OU8) and continue to see growth driven by higher bed capacity, occupancy, and rental rates.
• Following FY23 results, we lift our earnings forecast for Centurion by a marginal 4-6% on higher FY23 earnings base, which results in a slightly higher Centurion's target price.

FY23 earnings in line.

• - Read this at SGinvestors.io -
• Revenue was driven by bed capacity (65,856 beds, +3% y-o-y), bed rates (S$274 per bed, +4% y-o-y) and higher occupancy (96%, +6ppt).
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• Higher average bed rates were generally contributed by Singapore, UK, and Australia, as Malaysia’s rates remained flattish.
• The higher overall revenue led to better operating leverage, which resulted in better gross (70%, +3.9ppt) and EBIT margins (59%, +6.2ppt).
• A final dividend of 1.5 cents was declared, bringing total dividend to 2.5 cents for the full year, amounting to 30% payout ratio. See Centurion's dividend dates.

Outlook remains positive.

• Read more at SGinvestors.io.

Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2024-03-05 SGinvestors.io

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