Kakuzi Plc's avocado and macadamia operations delivered a combined KSh 1.07 Bn in segment profit in the year ended 31 December 2025, powering the group back to a KSh 568.4 Mn pre-tax profit after a KSh 166.7 Mn loss in the prior year.
- •The listed company's revenue rose 12.0% to KSh 5.37 Bn, the second-highest in the company's history.
- •The turnaround, however, came with a margin squeeze with cost of sales falling KSh 564 Mn to KSh 3.57 Bn, but selling and distribution costs ate back KSh 453 Mn of that saving, surging 47.2% to KSh 1.41 Bn as Red Sea shipping disruptions, now in their second year, inflated logistics expenses.
- •The net effect: a pre-tax margin of 10.6%, recovered from FY2024's loss but a fraction of the 27.6% achieved in FY2022.
Avocados, the group's largest segment at KSh 3.46 Bn in revenue (64.4% of total sales), drove the headline numbers. Segment profit nearly doubled to KSh 709 Mn from KSh 361 Mn as production rose 23% and export volumes increased to 525 containers from 446. Pricing moved in the opposite direction with European averages dropping to EUR 7.13 per carton from EUR 7.64, compressed by large volumes from Peru, South Africa and Colombia arriving through more efficient logistics routes than those available to Kenyan exporters.
Macadamia was the standout with segment profit surged to KSh 365 Mn from KSh 69 Mn as global kernel demand recovered and average prices rose 30% to USD 11.70 per kilo from USD 9.00. Production from 1,410 hectares grew 13% to 7.8 million kilos as orchards matured. Chairman Nicholas Ng'ang'a flagged the gap between the current price and the pre-COVID benchmark of approximately USD 15, noting that sustainable demand growth depends on expanding how consumers experience macadamia kernel rather than simply chasing higher prices.
The two weaker segments told contrasting stories. Tea swung to a KSh 53 Mn loss from a KSh 15 Mn profit as international prices fell 11% to KSh 166 per kilo of made tea on high global inventories. Blueberries, by contrast, recorded their first profit at KSh 5 Mn after a KSh 19 Mn loss, with production rising 70% to 90 tonnes and the average price improving to USD 12.40 per kilo. The board plans to triple blueberry acreage to 25 hectares in 2026, with potential to add 25 hectares annually thereafter, a bet that this crop can meaningfully reduce single-commodity exposure over time.
Forestry held steady at KSh 122 Mn in profit with the Kakuzi Farm Market, the company's domestic value-addition channel, crossing KSh 50 Million in annual sales for the first time, selling cold-pressed macadamia oil, ready-to-eat nuts, avocado fruit, blueberry packs and a recently launched loose-leaf tea.
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Cash generation strengthened materially. Operating cash flow surged 79.7% to KSh 853.2 Mn, lifting cash and bank balances 43.9% to KSh 1.59 Bn. Employee costs rose 17.5% to KSh 1.28 Bn despite headcount falling 9.1% to 3,418. Total equity edged up 4.4% to KSh 5.57 Bn, or KSh 283.87 per share.
Revenue concentration remains a structural risk: 63.9% of sales go to UK and Continental Europe through shipping corridors still affected by Red Sea instability. Management is developing market access to China and India for avocados, though current volumes in those markets do not substitute for Europe. North American access is described as aspirational.
Deloitte & Touche LLP retires as auditor after nine years, with PricewaterhouseCoopers recommended for FY2026. The board has only one independent director out of nine, below the CMA Code threshold. The National Land Commission's recommendation that Kakuzi surrender 3,200 acres is being challenged in court.
The board recommended a dividend of KSh 16.00 per share, double FY2024's KSh 8.00 but below the KSh 24.00 paid in FY2022 and FY2023. Dividend cover at 1.24x is thin by historical standards. Dr. John Kibunga Kimani, a non-executive director, holds 33.53% of shares. Camellia Plc, the UK-listed parent, controls 50.70%. EPS swung to KSh 19.77 from a loss of KSh 6.72.
