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Kapchorua Tea

Kapchorua Tea FY07 Loss Falls as Turnover increases

By Markets Editor ⋅ July 3, 2007 ⋅ Post a comment
Kapchorua Tea Company Ltd (NSE Listed) Producer and marketer of tea products has reported their 2007 financial results. According to a company statement posted on the Nairobi Stock Exchange website Kapchorua had a net loss of KES .928 million in their fiscal year ending March 31st, 2007 or .24 shillings per share from KES 9.79 million or 2.5 shillings per share in the prior year.
Kapchorua Tea Company Ltd (NSE Listed) Producer and marketer of tea products has reported their 2007 financial results. According to a company statement posted on the Nairobi Stock exchange website Kapchorua had a net loss of KES .928 million in their fiscal year ending March 31st, 2007 or .24 shillings per share from KES 9.79 million or 2.5 shillings per share in the prior year.

Annual profit before tax was KES 2 million, compared to loss of KES13 million in the previous year. Operating profit for the year was KES5.6 million, up from a loss of KES6.4 million in the earlier year. The company’s annual turnover climbed 32% to KES61027.3 million from KES463 million in the year ago.BALANCE SHEET REVIEW:

  • Inventories - UP 241%
  • Receivables & Prepayments - UP 11%
  • Trade & Other Payables - UP 160%
  • Bank and Cash- UP 85%
  • Post employment benefits obligations - UP 12.77%
  • Long-term borrowings - 5302%
    Property, Plant and Equipment - UP 68%

The company’s Board has proposed a final dividend of 5.0 shillings per share that, if approved at the AGM, will accrue to those members on the register at close of business on 19th July 2, 2007. The register will remain closed from 20th July 2007 to 31st July 2, 2007 both days inclusive with the dividend being paid thereafter net of withholding tax as applicable.

Annual Data: Profit and loss account
KAPCHORUA TEA COMPANY LIMITED
PERIOD ENDING 31 March  2007 31/03/2007 31/03/2006 06 vs 07
Kshs’ 000 Kshs’ 000 % Change
Turn over 610,303 462,749 31.89%
Profit(loss) from operation before biological assets valuation 32,826 (3,661)
Sisal leaf processing income (27,194) (2,585) -951.99%
Profit(loss) from operation 5,632 (6,246)
Net finance costs (3,578) (7,126) -49.79%
Profit or loss before taxation 2,054 (13,372) -115.36%
Taxation charges (2,982) 3,579 -183.32%
Profit(Loss) arising from operating activities (928) (9,793) -90.52%
KAPCHORUA TEA COMPANY LIMITED : Balance Sheet
PERIOD ENDING 31 March  2007 31/03/2007 31/03/2006 06 vs 07
Kshs ‘000 Kshs’ 000 % Change
ASSETS
Current Assets
Inventories 101,514 29,738 241.36%
Receivables and repayments 105,890 95,162 11.27%
Due from related companies 485 584 -16.95%
Taxation - 8,192
Bank and cash 50,561 27,419 84.40%
Total Current Assets 258,450 161,095 60.43%
Non-Current Assets
Property,plant and equipment 305,858 234,930 30.19%
Investments 717 717 0.00%
Prepaid operating lease rentals 21,837 21,861 -0.11%
Biological assets 523,092 546,798 -4.34%
Total Non-Current Assets 851,504 804,306 5.87%
Total Assets 1,109,954 965,401 14.97%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Trade and other payables 104,863 40,234 160.63%
Due to related companies 20,732 17,527 18.29%
Taxation 88 -
Borrowings 3,102 13,557 -77.12%
Total Current Liabilities 128,785 71,318 80.58%
Non-Current Liabilities
Borrowings 5,240 97 5302.06%
Deferred tax liabilities 211,434 191,524 10.40%
Employee benefit obligations 53,849 47,751 12.77%
Total Non-Current Liabilities 270,523 239,372 13.01%
Shareholders’ Equity
Share capital 19,560 19,560 0.00%
Reserves 691,086 635,151 8.81%
Proposed dividend - -
Total Shareholders’ Equity 710,646 654,711 8.54%
Total Liabilities and Shareholders’ Equity 1,109,954 965,401 14.97%

COMPANY STATEMENT ON RESULTS:
The results show a turn around from a loss of KES 7.9 Million to an after Tax profit of 18.1 Million arising from the operating activities. The improved results are mainly from the better prices in the first half of the year resulting from the lower production during the drought period of January to March 2006. The last half of the year saw a notable decline in the World Tea prices, a situation made worse by the strong Kenya Shilling.

Good crop was realized during the period with a record production of 5 Million kilos passing through the factory. During the year, the company carried out a professional revaluation of its Property, Plant and Equipment resulting in a revaluation surplus of KES 84 million which has been transferred to the Capital Reserves. The previous valuation was carried out in 2002.

DIVIDEND:
The Directors will recommend a first and final dividend of KES 5.00 (2006 – KES 0.50) at the forthcoming Annual general Meeting. The dividend if approved will accrue to those members on the register at close of business on 19th July 2, 2007. The register will remain closed from 20th July 2007 to 31st July 2, 2007 both days inclusive with the dividend being paid thereafter net of withholding tax as applicable.

ANNUAL GENERAL MEETING:
The Annual General Meeting of the Company will be held at the Nairobi Club, Ngong Road, Nairobi on Thursday 26th July 2007 commencing at 10:00 am.

PROSPECTS:
In view of declining World Tea prices and the continuing strong Kenya Shilling, we anticipate a considerable reduction in profitability and a very challenging year ahead.

Extracted from Company Statement

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