Comments On The Audited Results For The Year Ended 30th September, 2014
The results for the year ended 30th September, 2014 indicate a profit after tax from operating activities of Kshs. 85.476 million compared to Kshs. 126.832 million in the previous year.
The decrease in the profit is largely as a result of significantly lower prices of tea and lower production volumes of coffee in the year under review. The decline of tea auction prices persisted throughout the year mainly due to over-supply in the industry, changing consumer trends, political instability in major tea export destination countries, slow economic growth in the Eurozone and aggressive expansion of Tea bushes in Vietnam which has grown her exports to Pakistan by 60% over the period under review. Good rains in the West of Rift sustained last year’s tea production levels.
Although the tea division met projected production levels, the price realization dropped sharply from last year’s average of $2.26 per Kg to $1.82. This trend necessitated the announcement of the profit warning issued by the Company when announcing the unaudited six month results to 31 March 2014. The poor rainfall in the East of Rift over the year adversely affected production volumes of coffee while increasing our cost of production through increased irrigation intervals. Coffee prices improved during the year following the poor performance of Brazilian coffee. However, results were weighed down by the reduced production volumes for the year due to poor rainfall. Management implemented several cost cutting measures across businesses, and focused expansion of the retail and export divisions in a bid to improve the company’s performance.
The Board recommends the payment of a first and final dividend of Kshs. 0.25 (25%) per share for the year ended 30th September 2014, payable less withholding tax, where applicable, on or about 16th March 2015, to the members on the register at the close of business on 19th February 2015.
The register will be closed for one day, on 20th February 2015.
Annual General Meeting
The Annual General Meeting of the members will be held at Kamundu Estate, Kiambu on Friday 27th February 2015. Formal notice of the meeting will be sent to the shareholders.
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