Listed agricultural firms Williamson Tea Kenya and Kapchorua Tea Kenya will dip into their retained earnings to pay larger dividends that surpass their net incomes in the year ended March 2026.
Williamson Tea Kenya tripled its dividend payout to Sh525.3 million in the review period when it returned to profitability, riding on cost cutting.
It had paid a dividend of Sh175.1 million for the prior year. The company reported a net profit of Sh120.7 million in the review period compared to a net loss of Sh166.4 million the year before.
The higher profit saw the firm declare a first and final dividend of Sh15 per share, up from the previous Sh10 per share. The new dividend will be paid on a larger number of shares of 35.02 million units, amounting to the total payout of Sh525.3 million.
Williamson Tea doubled its issued shares in October last year after approving a bonus issue at a rate of one share for each held.
It previously paid a total dividend of Sh175.1 million when its shares count stood at 17.5 million units. This means that its dividend payout has tripled in absolute terms, thanks to more shares and a rise in payout per share.
The new dividend will be paid to shareholders who will be on record as of July 31, as the company taps part of its Sh4.4 billion retained earnings to make the distribution.
Williamson Tea's share price rallied 13.1 percent to close at Sh150.25 on Friday. Kapchorua, an affiliate of Williamson Tea, also raised its total dividend payout by 140 percent to Sh469.4 million from the prior year's Sh195.6 million.
The company declared a dividend of Sh30 per share up from Sh25 per share.
Just like Williamson Tea, Kapchorua had made a bonus issue of one share for each held, doubling its share count to 15.6 million shares from 7.8 million shares.
Kapchorua, whose net profit grew to Sh196.9 million from Sh181.1 million, will also use part of its retained earnings to pay the larger dividend. The company has retained earnings of Sh1.6 billion.
Kapchorua's share price rose 7.5 percent to Sh321.25 on Friday.
Williamson Tea returned to profitability despite sales dropping by Sh708 million to Sh3.4 billion, underlining the impact of lower costs which cut its operating loss to Sh41.5 million from Sh392.2 million. Other items including higher valuation of its plantations and more income from financial investments lifted the firm to the Sh120.7 million net profit.
“Crop production remains lower than last year due to strict quality controls on bought leaf combined with a dry spell experienced earlier in the year and continued lower than average rainfall,” Williamson Tea said in a statement.
Kapchorua Tea, a sister company to Williamson Tea, also benefitted from lower costs as revenue declined to Sh1.6 billion from Sh2.2 billion.
Williamson Tea issued a mixed outlook for the tea sector, decrying a higher tax and regulatory burdens.
“We hope that the opening of the Strait of Hormuz will reduce geopolitical pressures and assist the market but cost pressures and economic uncertainty are expected to continue,” the company said.
“The board is increasingly concerned by the continued growth in sector-specific taxes, levies and regulatory costs at both national and county levels which affect the industry’s long-term competitiveness and all stakeholders.”
