20th June 2018
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Company Data
Williamson Tea Kenya Ltd.
Par Value:                  5/-
Closing Price:           139.00
Total Shares Issued:          17512640.00
Market Capitalization:        2,434,256,960
EPS:             -13.73
PE:                 -10.124

Williamson Tea Kenya PLC H1 results through 30th September 2017 vs. 30th September 2016
H1 Turnover 1.737176b vs. 1.731368b +0.335%
H1 [Loss]/ profit from operations before biological assets valuation 27.744m vs. [96.276m] +128.817%
H1 Increase/ [decrease] in fair value of biological assets 17.059m vs. [200.478m] +108.509%
H1 Finance income/ [costs] 24.916m vs. [28.438m] +187.615%
H1 Share of results of associated companies [7.761m] vs. [50.685m] +84.688%
H1 Profit/ [Loss] before taxation 61.958m vs. [375.877m] +116.484%
H1 Profit attributable to equity holders of the parent 51.371m vs. [231.306m] +122.209%
H1 Profit attributable to non-controlling interests [8.000m] vs. [31.809m] +74.850%
H1 Profit/ [Loss] arising from operating activities 42.275m vs. [89.136m] +147.428%
H1 Profit/ [Loss] arising from changes in fair value of biological assets 9.096m vs. [142.170m] +106.398%
H1 Earnings/ [Loss] per share 2.93 vs. [13.21] +122.180%
Total assets 8.621686b
Total equity 5.962516b
Cash and cash equivalents at 30th September 861.164m vs. 701.529m

Company Commentary

Tea production was low not only for the Group but across the Tea Industry due to severe drought conditions experienced in the first few months of the year. reduced supplies were met with good demand which boosted prices during the period under review.
Group reported a profit during the 6 months mainly from investment and other non-operational activities.
Cost of production remains the biggest concern for the Group and the tea industry at large.
a much publicised strike orchestrated illegally by Union Leaders in the month of October and early November resulting in major losses which will affect performance for the next 6 months.
The Future therefore remains very unpredictable.


Market Cap is 2.9b versus Total Equity of 5.96b which is before marking the real estate to market.

Williamson Tea Kenya Limited FY 2016/17 results through 31st March 2017 vs. 31st March 2016

FY Turnover 3.416340b vs. 3.386015b +0.896%
FY [Loss]/ profit from operations [361.180m] vs. 365.210m -198.897%
FY Increase in fair value of biological assets 4.130m vs. 45.505m -90.924%
FY Finance income 25.586m vs. 133.923m -80.895%
FY [Loss]/ profit before taxation [351.944m] vs. 586.609m -159.996%
FY [Loss]/ profit for the year [261.593m] vs. 482.747m -154.188%
[Loss]/ earnings per share [13.73] vs. 26.45 -151.909%
Total Assets 8.364127b vs. 8.931395b -6.351%
Total Equity 6.094272b vs. 6.714337b -9.235%
Cash and cash equivalents at 31st March 949.714m vs. 1.241617b -23.510%

Company Commentary

Prices have been generally weak through the year but as very high crops were followed by low crops, prices increased in the final quarter of the year.
Cost increased trough the year further adding to poor results.

With crops currently low and therefore less Tea available to buyers throughout Kenya, we expect to see good prices for a period of time in the new financial year.
There remains uncertainty over trade union disputes currently being presided over in the courts.

End of the week view over the farms #bushtocup #teafarmers #kenya @Williamson_Tea


They have not yet advised around the final Dividend.
NAV is a multiple of the share price

Williamson Tea reports H116 Earnings through 30.09.2016 versus through 30.09.2015
H1 Turnover 1.731368b versus 1.529611b
[Loss] Profit from Operations before biological assets valuation [96.276m] versus 207.536m
[Decrease]Increase in fair value of biological assets [200.478m] versus 159.216m
Finance [costs]Income [28.438m] versus 120.312m
Share of results of associated Companies [50.685m] versus 56.748m
[Loss] profit before Taxation [375.877m] versus 543.812m
Tax credit[charge] 112.763m versus [163.144m]
[Loss] profit after Tax [263.114m] versus 380.668m
[Loss] EPS [13.21] versus 41.66


Turnover +13% due to higher crops
Higher crops throughout tea growing areas depressed prices to very low levels last seen briefly in 2014
Cost of production continues to rise which when coupled with low prices has resulted to a loss
In June 2016 an Industrial Court judgement awarded over 50% wage and benefit increases to our workers for years 2014 and 2015. Award was challenged by the Tea Industry and is awaiting Judgement by the court of Appeal
The unknown Outcome of the next judgement adds considerably to the uncertainty of the next 6 months
In short the outlook is gloomy


Buy on dips. NAV is a multiple of the share price, notwithstanding the earnings dip.

FY Turnover 3.386015b vs. 2.590416b +30.713%
FY Profit from operations before tax 539.779m vs. 193.884m +178.403%
FY Increase [decrease] in fair value of biological assets 174.046m vs. [471.682m] +131.899%
FY Finance income [costs] 133.923m vs. [9.083m] +1,574.436%
FY Profit [loss] before taxation 980.672m vs. [298.565m] +428.462%
FY Profit [loss] for the year 738.209m vs. [227.636m] +424.294%
EPS 40.30 vs. [11.88] +439.226%
Dividend per share 20
Total equity 6.969799b vs. 6.583036b +5.875%
Cash & cash equivalents at the end of the year 1.241617b vs. 0.993360b +24.992%

Company Commentary

Cropping Patterns and therefore prices were erratic through the year. Low supply initially forced prices up before giving way to extremely favourable conditions, supply surged and prices crashed.
Whilst the Group honoured long term contract commitments to partially miss out on the initial strength of the market, an increase in crop of +19%
Final Dividend 20 shillings a share


The Dividend is worth 10.98% of Yield.
Plenty of cash on the Balance sheet.
Its a Cheap share on a PE of 4.51

Full Year Earnings through 31st March 2015 versus through 31st March 2014
Full Year Turnover 2.590416b versus 3.512086b -26.242%
Full Year Profit from Operations before Income Tax 193.884m versus 614.593m
[Decrease] Increase in fair value of biological assets [471.682m] versus [346.663m]
Full Year [Loss]profit for the Year before Taxation [298.565m] versus 1.041033b
Full Year Profit after Tax [227.636m] versus 740.721m
Full Year Earnings Per share [23.77] versus 81.36
Full Year Dividend 40 shillings a share funded by reserves
Revenue Reserves 5.518553b versus 5.681819b

Company Commentary

Prices have been weak through the year as large unsold tea stocks from other producers within Kenya We expect to see better prices as we enter the financial year due to less Tea available in the market


Weak Tea prices were a known Known. The aggressive Dividend Pay out Policy will revalue the share considerably higher

Full Year Earnings through 31st March 2014
FY Turnover 3.512086b versus 3.490681b +6.132%
FY Profit from Operations before Tax 614.593m versus 863.292m
FY Increase in Fair Value of Biological Assets 346.663m versus 202.557m
FY Share of results of Associated Companies 72.030m versus 101.176m
FY Profit Before Tax 1.041033b versus 1.155760b -10.099%
FY Profit After Tax 740.721m versus 855.659m -13.43%
FY Earnings per Share 81.36 versus 94.36 -13.777%
Final Dividend 7 shillings a share versus 7.50 a share -6.666%

Company Commentary

weak markets and declining Tea Prices experienced during the Year
Group made significant investments in Changoi solar park which was commissioned on 21st May 2014 to secure a cost effective power supply to the Changoi factory.


The 8.6% Dividend Pay Out Ratio is incomprehensible and its been like this for a number of years.
This is probably the cheapest share at the Securities Exchange on a PE Basis.

H1 2013 ended 30.09.2013 versus H1 2012
H1 Profit from operations before biological assets Valuation 175.374m
versus 125.858m
H1 Increase in Fair Value of biological Assets 279.220m versus 192.583m
H1 PBT 526.064m versus 398.017m
H1 PAT 368.245m [189.595m from Biological Assets Reval] versus 278.612m
H1 EPS 41.18 versus 29.85

Company Commentary

It is a matter for national concern that the international tea markets have declined sharply indeed over the period under review with Mombasa
Auction prices currently a huge 30% below 2012 and now standing at a seven year low. The Kenyan crop has increased by 20% in this period over 2012 which has combined with increases in crop in other major tea producing countries to create a very weak and commercially unsustainable tea market in Mombasa.


Its an outrageously cheap shares and There is 910.092m of cash on hand and
that alone is worth 103 shillings a share.

Swot Analysis H1 through Sep 2012 versus H1 through Sep 2011

FY Turnover 3.490681b versus 3.607409b
Increase in Value of Biological Assets 202.557m versus 440.944m
Share of Results of Associate Companies 101.176m versus 44.535m
FY PBT 1.155760b versus 1.163499b
FY PAT 855.659m versus 854.740m
FY EPS 94.36 versus 93.74 +0.66%
Final Dividend 7.50 a share Unchanged 7.94% Dividend Pay Out Ratio
Short Term Deposits 798.239m
Bank and Cash 300.104m

The year under review saw reasonable weather conditions, albeit two significant hailstorms in April and August 2012, which resulted in a reduction of our own crop. This not withstanding, the rainfall throughout the year ensured that the crop remained high in the last quarter and contributed significantly to the results.
In view of the favourable results, the Directors recommend a final dividend of KShs 7.50 per share (2012 KShs 7.50) to be approved at the forthcoming Annual General Meeting. The final dividend if approved will accrue to those members on the register at close of business on 25th June 2013
The register will remain closed from 26th June to 2nd July 2013 both days inclusive with the dividend being paid thereafter net of withholding tax as applicable.
The weather conditions continue to be unpredictable. In addition to uncertain market demand, foreign exchange fluctuations and the ever increasing costs of production, the impact of the new County Governments and the new Agricultural and Fisheries board may adversely affect the performance and profitability of the Group in the forthcoming financial year.


Williamson Tea has now established this Level of EPS [above 90 shillings a share] as a New Normal.
They are currently sitting on 1.098b Cash in Hand.
A Dividend Pay Out Ratio of 7.94% of EPS is an egregious Anomaly.
The Price should be much higher and The Management needs to work out how they will raise the PE Ratio from 2.6918 to something more like equilibrium which is a minimum of 8.00

Turnover 1.502746b versus 1.556129b -3.43%
Profit from Operations before Biological Revaluation 125.858m versus 438.382m -71.29%
Increase in Fair Value of Biological Assets 192.583m versus 286.367m
H1 Profit Before Taxation 398.017 versus 1.073361b -62.918%
H1 Profit after Tax 278.612m versus 805.714m -65.42%
H1 Earnings Per Share 29.85 versus 89.42 -66.618%

Company Commentary

Variable weather conditions and some severe hail attacks have reduced the group crop by 6% during the period under review. The actual costs of doing business have increased substantially, broken down into large increases in the cost of green leaf purchases, power, fuel, selling and distribution costs, an additional 12% on wage costs and huge increases to our export of taxation liabilities. In addition plant, property and equipment were revalued at March 2012 which significantly increased the depreciation charge for the six months.


Sharply lower but recall There was an Extraordinary Gain of 144.642m from the Sale of Williamson House last time.
Even if I straight line the H1 EPS i come up with a Forward PE of 3.35 which hardly looks demanding.
They have come off the Elevated EPS level seen for the last 3 Years.
The Net Asset Value is a Multiple of the Current share price because the Land Bank is held at Cost.
There has been considerable Cash Formation on the Balance Sheet
Total Equity is 5.155210b 8.76m shares 588.35 Shillings a share.

Swot Analysis Full Year through March 2012 versus FY through March 2011
Profit for Operations before Biological Assets Revaluation 729.5m versus 823.363m -11.3999%
Increase in Biological Assets Revaluation 440.944m versus 333.823m +32.089%
Profit Before Taxation 1.163499b versus 1.29369b -10.06%
Profit After Tax 854.74m versus 884.385m -3.35%
Earnings Per Share 93.74 versus 97.45 -3.807%
Interim Dividend of 50.00 shillings paid
Final Dividend 0f 7.50


This is the 3rd Year Williamson has made more than 90 shillings per Share. Therefore, I believe Earnings have entered a New and elevated Normal. At a PE of 2.98, I remain of the View that Williamson is egregiously undervalued.

Swot Analysis 6 months to Sep 2011 versus 6 months to Sep 2010
Turnover 1.556129b versus 1.513183b +2.838%
Profits from Operations before Biological Revaluation 438.382m versus 284.626m
Gain on Sale of Property 144.642m
PBT 1.073361b versus 652.772m +64.431%
PAT 805.714m versus 456.783m +76.388%
EPS 89.42 versus 50.50 +77.069%


This is the sweetest of sweet spots for Tea Estates. They have made just 9% less in these 6 Months than they made in the Entire Previous Year. The Forward Implied PE is less than 2.00.

Swot Analysis 12 Months ended March 2011
Turnover 3.284909b versus 2.723187b
Profit from Operations before Biological Tax Revaluation 823.363m
versus 759.707m
Biological Revaluation 333.823m versus 382.353m
Profit After Tax 884.385m versus 876.055m
EPS 97.45 versus 96.42
Final Dividend 12.50 + Interim Diividend of 2.50
All In Dividend Yield is 7.142%


They should have paid a Much Higher Dividend Pay Out Ratio. but a PE
of 2.154 looks egregious. Tea Prices are significantly higher than their Long Term Moving Average and the Currency is also sweetening the Profits. This remains a very undervalued share but Management apparently is determined to keep that Discount. A Higher Pay Out Ratio would have ignited the Price.
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 19 Jun 2018
  30-NOV-2017 ::  Change of Name
  Change of Name

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  02-OCT-2017 ::  AGM Resolutions
  Annual General Meeting Resolutions

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  04-JUL-2017 ::  Full Year Results (Additional Information)
  Audited Results for the Year Ended 31st March 2017.

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  30-JUN-2017 ::  Full Year Results
  Audited Results for the Year Ended 31st March 2017.

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