Kapchorua Tea sets aside Ksh77 million for dividends payment
Kapchorua Tea Kenya PLC (KAPC) runs tea farming and sale business. It farms the tea in Kenya for sale around the world. The company made a profit of Ksh19.4 million in its 2020 fiscal year ended March, marking a sharp reversal of fortunes from a Ksh125.7 million loss last year.
Kapchorua Tea’s revenue dropped to 1.13 billion in fiscal 2020 from Ksh1.42 billion last year, weighed down by weak tea prices in the global market. But the company still managed to turn a profit despite the revenue decline because of better cost controls.
Kapchorua Tea plans to pay a dividend of Ksh10 per share, which will cost it Ksh77.3 million. Notably, the company paid the same dividend of Ksh10 per share last year despite making a loss.
Kapchorua Tea is a subsidiary of Williamson Tea Kenya PLC (WTK), which also turned to profit in fiscal 2020 from a loss in fiscal 2019. Williamson Tea plans to pay a dividend of Ksh20 per share. Kapchorua Tea and Williamson Tea have a common board of directors.
Kapchorua Tea shares currently trade at Ksh89 apiece. The shares have gained more than 10% this year but still trade at more than 6% discount to their 52-week peak of Ksh95.