Capital Markets

Williamson Tea share price gains on doubling dividend


George Williamson House in Nairobi. FILE PHOTO | NMG

Listed agriculture firm Williamson Tea’s share gained by nearly six percent on Friday after the firm announced it will double its dividend per share to Sh20 for the year ended March.

The stock closed at Sh130.75 on Friday after opening trading on the day at Sh124. During trading, it touched a high of Sh137 before easing on selling pressure.

Williamson Tea enhanced its dividend payout to shareholders after it turned around a net loss of Sh146.1 million in the year ended March 2021 to a net profit of Sh529.8 million in the review period.

The register for the dividend closes on July 29, the firm said in its financial statement released last Thursday.

“Our long-term plan of producing teas that are as consistent in quality as possible is providing further selling opportunities in the key markets of Egypt and Pakistan. With demand improving prices also improved and we were able to return to a profitable position,” said Williamson Tea.

“The disruption to global supply chains and current inflationary pressures on all inputs means our costs will rise.

The demand and price side is impossible to control but we are confident of remaining competitive.”

Investors at the Nairobi Securities Exchange (NSE) have increasingly considered the dividends paid on a stock before taking a position due to limited capital gains in the long-running bear market.

The depressed prices have been in contrast to improved profitability among firms, which have continued their post-Covid financial recovery, with the effect being a jump in dividend yields as firms resume or enhance their payouts.

Williamson Tea’s stock is now offering a dividend yield of 15.3 percent based on Friday’s closing price, representing one of the highest returns on a stock at the bourse.

Other companies offering high yields include the NSE, whose yield stood at 19.3 percent on Friday, Standard Chartered Bank Kenya at 15.3 percent, and Carbacid at 13.9 percent.

These yields far outstrip the interest rate on the government’s one-year Treasury bill, which stood at 9.98 percent in last week’s auction.

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