Williamson Tea Kenya, a prominent player in the agricultural sector, has witnessed a remarkable upswing in its stock value, soaring to a fresh 52-week peak at Kshs 269. Investors are buoyantly responding ahead of the company’s book closure, offering an enticing Kshs 30 per share dividend on August 23. Impressively, this new share price outshines the previous 52-week high of Kshs 261. Market activity on Tuesday saw Williamson Tea’s share value ascend from Kshs 256, with a moderate trading volume of 5,000 units.
The dividend distribution strategy unfolds in two stages, with the company slated to deliver the initial and final dividend on September 4. This financial perk represents a stride forward from the Kshs 20 per share dividend disbursed in the previous fiscal year, which concluded in March 2022. The company registered a commendable rise of 4.5 percent in profitability which marked the fiscal year closing in March 2023, culminating in a substantial net earnings figure of Kshs 564.3 million.
This impressive performance is testament to the company’s resilience in the face of challenges. However, a drop of 11 percent in crop production led to an output of 15.1 million kilograms of tea. Additionally, the volume of tea sold experienced a modest contraction from 16.2 million kilograms to 16 million kilograms. The impact of these challenges was partially offset by the surge in average tea prices, increasing from Kshs 216 to Kshs 257 per kilogram.
The impending dividend distribution carries significant implications for various stakeholders. Gong Tea Holdings Limited, registered in London, emerges as a notable beneficiary, holding a commanding 51.4 percent stake in Williamson. This translates to a substantial ownership of 9,012,328 shares. Other influential shareholders include Balochi and Imaret Patel, boasting a 4.33 percent stake, as well as Upstream Investments Limited and CTC Global Investment Limited.
Despite the company’s commendable performance over the past year, the management remains cautious due to several challenges. Notably, inflation has led to increased production costs, compounded by elevated expenses such as electricity and security. Williamson’s Chairman, Ezekiel Wanaka, highlighted concerns about the erosion of the rule of law and the rise in theft of green leaves, vandalism, and asset destruction. These issues necessitate additional security measures, consequently adding to the company’s operational costs, as noted in the 2023 Annual Report.
