Skip to content
Stock Watch

Kakuzi Ltd Releases Rather impressive FY16 results; EPS up 18.6pc

BY Soko Directory Team · March 30, 2017 09:03 am

Equities

Market turnover remained elevated yesterday with a turnover of KES 4.5Bn over yesterday’s KES 4.0Bn. However, activity was slowed down by the announced tap sale which is expected to fill and close today. Rebound on activity  is expected in the market today with focus still on IFB bonds and the long to medium term end of the yield curve. The local unit came under pressure yesterday to close at 102.90 as end month corporate demand peaked. The interbank market remained relatively range bound with liquidity still well spread within the market.

Stock Watch

Kakuzi Ltd (NSE: KUKZ) released its rather impressive FY16 results yesterday; EPS was up 18.6% y/y to KES 27.8 owing to favourable market demand for the core crop products (avocado and macadamia). Additionally, the board of directors recommend a dividend of KES 6.00(+20.0% y/y) per ordinary share.
We noted the below drivers of the firm’s profitability:
  • Kakuzi is the only avocado producer among the listed companies, which accounts for exporting approximately 45% of the total volume from Kenya. Kakuzi continues to focus on producing a quality product and has extended its orchard footprint by another 58 hectares, totaling 483 hectares. The intention is to have a total planted area of 640 hectares by 2020.
  • Construction of the macadamia cracking facility which is complete will continue to improve volume growth going forward. Kakuzi currently has 953 hectares of macadamia orchard, which was up by 97 hectares from last year. The company plans to have a total of 1,030 hectares by 2020.
  • Strong Cashflow.
  • Has a wealth of assets and the company has no leverage.

 

However, the risks are:

  • Earnings vulnerable to external factors.
  • Foreign exchange risks.

 

Having considered the above, we recommend a buy on the counter.

Trading Expectation:
Market turnover clocked slightly above KES 500Mn with Safaricom Ltd (NSE: SCOM) holding firm as the highest traded counter though losing 3.0% in yesterday’s session. With the book closure dates around the corner for most banking counters, we expect continued exuberance in the banking sector.

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

Trending Stories
Investment Your Investment Plan For 2025: Mansa X (19.53%) vs. Oak Fund (29.38%) – 2024 Performance, Which Should You Invest In? Steve Biko Wafula
Entrepreneur's Corner 15 Reasons Why You NEED NCBA Now: The Bank Fueling Ambition And Entrepreneurship In Kenya Steve Biko Wafula
Government and Policy HELB Opens Loans And Bursary Application For Students, How To Apply Getrude Mathayo
Headlines Jubilee Health Insurance Launches Its First Center of Excellence, Agency Office; Empowering Agents To Bridge Kenya’s Healthcare Gap Soko Directory Team
Government and Policy TSC Announces JSS Vacancies, Requirements And How To Apply Getrude Mathayo
Related Articles
Market News Kenya Airways Top Gainer At The NSE As Equity Turnover Expands 42% Standard Investment Bank
Market News Bamburi clocks 95% Of Day’s Turnover, Linked To The Takeover Offer Soko Directory Team
Market News November PMI Expands To 50.9, CBK MPC Interest Rate Decision Tomorrow Soko Directory Team
Market News Safaricom Accounts For 66.3% Of Thursday’s Turnover As Foreign Investors Turn Bearish Standard Investment Bank
Investment Why Is The NSE Dead When We Have So Much Opportunity For IPOs And a Sustainable Ecosystem Of Investments? Steve Biko Wafula
Explore Soko Directory
Banking Blogging Commodity Watch Did you know Entertainment Entrepreneur's Corner Feature Government and Policy Headlines Investment Lifestyle Market News Money Opinion Press Releases Stock Watch Technology
Soko Directory Archives