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Williamson, Kapchorua Tea HY 2014-2015 gloomy picture
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muganda
#1 Posted : Monday, November 24, 2014 12:33:00 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
The futility of a new topic, HY 2014-2015 Williamson & Kapchorua, 6 months later - same script WTK earnings down 55% KAPCH earnings down 38% http://ge.tt/9tUFG852

This sector is careening, without terrorism, to reflect Tourism sector.

PROSPECTS

There are no indications of the global tea market picking up in the near future. As the weather continues to be favourable, we expect that the crop and stock levels will continue to rise depressing the tea prices further.

The County Governments have prepared their budgets which appear to impose more taxes on firms operating within their jurisdictions. The labour unions are pressing for higher wages despite the economic conditions currently prevailing in the tea sector. Movement in cash and cash equivalents

The Board continues to look into cost effective ways of running the Company operations under the circumstances even as the remaining months to year end are likely to more challenging.

Based on the above stated factors ... it is reasonable to anticipate earnings for financial year ending March 2015 will be lower than previous ear's earnings by at least 25%.
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VituVingiSana
#2 Posted : Monday, November 24, 2014 8:41:49 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Not for the faint-hearted. And worth picking up when the prices fall [due to low tea prices or low production] ... unlike small-scale farmers, WTK/KTC can afford to maintain their bushes, replant/replace old bushes and conduct R+D for future growth.

Now hoping it falls towards 200/-... The biggest threat is not low tea prices but land grab by the politicians.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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sqft
#3 Posted : Wednesday, April 29, 2015 5:49:28 PM
Rank: Veteran

Joined: 1/10/2015
Posts: 961
Location: Kenya
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kayhara
#4 Posted : Tuesday, January 05, 2016 3:31:34 PM
Rank: Veteran

Joined: 5/5/2011
Posts: 1,059
To Each His Own
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VituVingiSana
#5 Posted : Tuesday, January 05, 2016 3:36:18 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Why did CMA take so long to approve a bonus issue? Why does the CMA need to be involved in the approval? Do you need the permission of the cook to slice your boiled potato into 2 pieces?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Arconnrk
#6 Posted : Wednesday, January 06, 2016 12:05:59 AM
Rank: New-farer

Joined: 7/23/2015
Posts: 35
VituVingiSana wrote:
Why did CMA take so long to approve a bonus issue? Why does the CMA need to be involved in the approval? Do you need the permission of the cook to slice your boiled potato into 2 pieces?


Applause I'm in agreeement @VVS about the achingly long time it takes for what should be a simple process of verification. I almost gave up on this bonus issue until eagle-eyed @pesanane posted the approval on another thread.

Why is such approval needed in the first place? If I may dust off my old company law books: since bonus shares are meant to be paid for out of reserves not distributed as dividends, the reason for CMA approval is presumably to ensure that a company does not issue such shares based on inaccurately stated accounts (I have HAFR, Uchumi and EAPC's adventurous accounting in mind) and do not result in unlawful changes in share capital. The consequences can be quite severe in such a scenario since in at least one case a court invalidated the contract to allot bonus shares because the company had insufficient profits to 'pay' for the bonus shares.

I doubt the toothless CMA would do much if shares are incorrectly allotted but in theory the rule makes sense so that bonus shares are not wrongly alloted then messily 'retrieved' by court order. It shouldn't take such a long wait though IMHO.
Even the birds can testify...but you forget the chief has his son as the judge and his son-in-law as interpreter- Oumar Ba
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VituVingiSana
#7 Posted : Wednesday, January 06, 2016 2:07:33 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Arconnrk wrote:
VituVingiSana wrote:
Why did CMA take so long to approve a bonus issue? Why does the CMA need to be involved in the approval? Do you need the permission of the cook to slice your boiled potato into 2 pieces?


Applause I'm in agreeement @VVS about the achingly long time it takes for what should be a simple process of verification. I almost gave up on this bonus issue until eagle-eyed @pesanane posted the approval on another thread.

Why is such approval needed in the first place? If I may dust off my old company law books: since bonus shares are meant to be paid for out of reserves not distributed as dividends, the reason for CMA approval is presumably to ensure that a company does not issue such shares based on inaccurately stated accounts (I have HAFR, Uchumi and EAPC's adventurous accounting in mind) and do not result in unlawful changes in share capital. The consequences can be quite severe in such a scenario since in at least one case a court invalidated the contract to allot bonus shares because the company had insufficient profits to 'pay' for the bonus shares.

I doubt the toothless CMA would do much if shares are incorrectly allotted but in theory the rule makes sense so that bonus shares are not wrongly alloted then messily 'retrieved' by court order. It shouldn't take such a long wait though IMHO.

Bonus shares are not used to raise funds/capital. If the books are cooked, the bonus shares make no difference.

Look at Bonus/Split shares as smaller pieces of the same pie. If you owned 10% of Williamson before the bonus/split, you will still own 10% of Williamson after the bonus/split. No difference in your 'ownership' of the profits of Williamson.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Arconnrk
#8 Posted : Wednesday, January 06, 2016 2:57:19 PM
Rank: New-farer

Joined: 7/23/2015
Posts: 35
VituVingiSana wrote:
Arconnrk wrote:
VituVingiSana wrote:
Why did CMA take so long to approve a bonus issue? Why does the CMA need to be involved in the approval? Do you need the permission of the cook to slice your boiled potato into 2 pieces?


Applause I'm in agreeement @VVS about the achingly long time it takes for what should be a simple process of verification. I almost gave up on this bonus issue until eagle-eyed @pesanane posted the approval on another thread.

Why is such approval needed in the first place? If I may dust off my old company law books: since bonus shares are meant to be paid for out of reserves not distributed as dividends, the reason for CMA approval is presumably to ensure that a company does not issue such shares based on inaccurately stated accounts (I have HAFR, Uchumi and EAPC's adventurous accounting in mind) and do not result in unlawful changes in share capital. The consequences can be quite severe in such a scenario since in at least one case a court invalidated the contract to allot bonus shares because the company had insufficient profits to 'pay' for the bonus shares.

I doubt the toothless CMA would do much if shares are incorrectly allotted but in theory the rule makes sense so that bonus shares are not wrongly alloted then messily 'retrieved' by court order. It shouldn't take such a long wait though IMHO.

Bonus shares are not used to raise funds/capital. If the books are cooked, the bonus shares make no difference.

Look at Bonus/Split shares as smaller pieces of the same pie. If you owned 10% of Williamson before the bonus/split, you will still own 10% of Williamson after the bonus/split. No difference in your 'ownership' of the profits of Williamson.


Indeed a bonus issue is probably just a share split with a better set of clothes.

But even if as a shareholder I'm not one cent better off, in this bear run the psychological 'gain' of seeing my shares multiply is all I have to cling to!

Williamson was the best performer in my portfolio last year- the rest (Unga, DTB, KPLC and KK) were either flat or gave me heartburn.
Even the birds can testify...but you forget the chief has his son as the judge and his son-in-law as interpreter- Oumar Ba
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VituVingiSana
#9 Posted : Wednesday, January 06, 2016 4:50:27 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Arconnrk wrote:
VituVingiSana wrote:
Arconnrk wrote:
VituVingiSana wrote:
Why did CMA take so long to approve a bonus issue? Why does the CMA need to be involved in the approval? Do you need the permission of the cook to slice your boiled potato into 2 pieces?


Applause I'm in agreeement @VVS about the achingly long time it takes for what should be a simple process of verification. I almost gave up on this bonus issue until eagle-eyed @pesanane posted the approval on another thread.

Why is such approval needed in the first place? If I may dust off my old company law books: since bonus shares are meant to be paid for out of reserves not distributed as dividends, the reason for CMA approval is presumably to ensure that a company does not issue such shares based on inaccurately stated accounts (I have HAFR, Uchumi and EAPC's adventurous accounting in mind) and do not result in unlawful changes in share capital. The consequences can be quite severe in such a scenario since in at least one case a court invalidated the contract to allot bonus shares because the company had insufficient profits to 'pay' for the bonus shares.

I doubt the toothless CMA would do much if shares are incorrectly allotted but in theory the rule makes sense so that bonus shares are not wrongly alloted then messily 'retrieved' by court order. It shouldn't take such a long wait though IMHO.

Bonus shares are not used to raise funds/capital. If the books are cooked, the bonus shares make no difference.

Look at Bonus/Split shares as smaller pieces of the same pie. If you owned 10% of Williamson before the bonus/split, you will still own 10% of Williamson after the bonus/split. No difference in your 'ownership' of the profits of Williamson.


Indeed a bonus issue is probably just a share split with a better set of clothes. Laughing out loudly Laughing out loudly Laughing out loudly

But even if as a shareholder I'm not one cent better off, in this bear run the psychological 'gain' of seeing my shares multiply is all I have to cling to!

Williamson was the best performer in my portfolio last year- the rest (Unga, DTB, KPLC and KK) were either flat or gave me heartburn.
I like your picks except for the long term except for KPLC with my aversion for most GoK controlled firms. I lost a bundle on KPLC after I bought into the Rights Issue. We were conned by KPLC/GoK/MoE/ERC about the upcoming triennial rate review that was indicated in the IM as coming due.

WTK will face challenges in 2017 with the ushago political climate. In 2008, they lost some equipment & buildings some idiots burnt. It's better they steal the equipment and use it than burning it! Idiots.

Profitability: With current (2H) tea prices, high interest rates & weak (100+) KES... plus the recent rains the 2H is looking very good for WTK. Perhaps we will see another 40/- dividend?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Wednesday, January 06, 2016 4:56 PM | Reason: Not specified
VituVingiSana
#10 Posted : Wednesday, January 06, 2016 5:00:38 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,347
Location: Nairobi
Without counting the Time Value of Money, and a possible 40/- dividend for FY 2015-16, Williamson has been one of my best payback via dividends.

50/- after selling Williamson House.
40/- last year after a bumper harvest + low CAPEX
For 2015-16, I expect low CAPEX [no need to spend on the farm to build or buy what idiots might burn down] & a high payout approx 40/-
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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