The Board of Limuru Tea Plc Limited has issued a profit warning for the year ended December 31, 2021, due to reduced green leaf and increased cost of production.
“The Board hereby informs holders of Securities issued by the Company and the general public that based on a preliminary review of the financial statements of the Company, the Company is expected to record a decline of more than 25 percent in the net profits attributable to the shareholders of the Company for the financial year ended 31st December 2021 as compared with the audited financial results for the year ended 31st December 2020. The Board is of the view that the estimated decrease in the results for the period is mainly due to the lower green leaf volumes that were realized in 2021 compared to 2020 amid rising cost of production,” the statement read in part.
This comes ahead of full disclosure of the financial statement in March 2022, which will highlight major financial occurrences of the company.
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“The information contained in this announcement is based on the information currently available to the Board and a preliminary evaluation of the financial statements of the Company for the period of 12 months (which are being audited by the Company’s auditors),” the statement added.
Founded in 1895, Limuru Tea owns 275 hectares of tea land situated four kilometers to the east of Limuru Town.
Limuru Tea Plc is an out-grower to Unilever Tea Kenya Limited (UTKL). UTKL holds 52 percent of the issued share capital of Limuru Tea and acts as the company’s managing agent in the growing, manufacturing, sales and marketing of its teas.
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The Limuru Tea estate green leaf is manufactured in the nearby UTKL’s Mabroukie factory from where it is sold mainly for export.
UTKL started as Brooke Bond Kenya (BBK). The name was changed to Unilever Tea Kenya Limited (UTKL) in 2004. Today, UTKL has a total landholding standing at 16 223 acres, has 20 tea estates and eight factories manufacturing an average of 32 million kgs of tea per year.
In January 2009 Unilever Tea was delisted from the Nairobi Stock exchange after Brooke Bond took its holding in the company to 97.65 per cent. The drive for the Anglo-Dutch firm to de-list from the NSE emanated from the fact that it does not meet the requirement that all listed firms should have at least a 25% equity stake owned by local shareholders.
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