Williamson Tea, one of the oldest tea companies in Kenya, has issued a profit warning for the financial year that ended on 31st March 2021. In a public statement, the company said ” [Williamson Tea] currently forecast that the result of financial year ending on 31st March 2021 could be at least 25% lower than those of the financial year ended 31st March 2020″.
The company blames the depressed property market, which has negatively affected its investment properties, for the anticipated drop in net profit. In addition, rising cost of production and reduced tea prices in the global market are expected to contribute to the decline in full-year profit.
In its latest annual report, Williamson Tea Chairman, Ezekiel Ndichu Kimatu, said, “The actual cost of doing business is forever rising. Local taxes, often set without consultation and with doubtful basis rise inexorably.”
Williamson Tea, which began operating more than 150 years ago, is mainly involved in the production and sale of tea. In the last financial year that ended on 31st March 2020, the company posted a net profit of KSh180 million, up from a net loss of KSh173 million the previous year.
The company says that the loss on revaluation of investment properties has got no impact in the group’s cash flow position.