This is a very stable company with a product that have longevity and it is very well run with no dominant individual shareholder as is visible in a company like EA Cables. Eveready has 3 shareholders who in total own 63% thus providing a balanced ownership.
Many of us urbanites do not appreciate the power of the D battery in powering the country as many of us either have rechargeable devices or use the AA and AAA battery.
At the bottom of the pyramid the D size battery is king, ask your watchman today when you get home which battery he uses.
When looking at the shareholding of EA cables and Eveready it is shocking that less than 6 shareholders have invested more than 1 million shillings and over 99% have less than 10,000/- invested.
It tells you that the over hyped investment groups are over spread. You want your investment group notices then buy 4 million worth of Eveready shares and you will be listed in the annual report.
Eveready is a very tightly run business with very little financial acrobatics which attests to their being able to survive all this years of imported products. To better deal with issues of ownership and management Merali relinquished his chairmanship and board seat which means improved corporate governance.
Eveready has an Achilles hill as relates to the current MD, his too hands on and the board needs to start working on leadership continuity.
If we can develop strong well funded investment groups then we can position for the post Kenyatta generation to take control of listed companies. Investment clubs need to remain unitized and avoid becoming business owners are managers.
In the case of Eveready a buy off of ICDC would cost 72 million, a figure that can be easily raised if 10 or so clubs agreed to put aside their egos and merged. Thus being able to take a decision making position in a good company.
It is said that investment clubs hold over 35 billion (http://www.un.org/ecosocdev/geninfo/afrec/newrels/kenya-grassroots-savings-09.html) of which over 80% (28B) is in non & low performing assets such as plots and taxis.
Eveready has been able to manage their debt very efficiently and even though it took on additional debt last financial year it did it without increasing total interest payments.
For those who did not know Eveready will soon be diversifying into the baby care products such as diaper from the Playtex range this will supplement the other two consumer products for the medium income range energizer & Schick.
With the drop in calling charges from 8/- to 3/- many women who previously could not afford diapers will now be able.
In conclusion the company has a clear strategy which they follow through and this can be seen when you read the annual reports for the past 3 years.
Even though they will not be paying a dividend this year it is a solid company that has above average fundamentals and offers high opportunities for capital gains as a result of its large number of shareholders.