WTK (Williamson Tea Kenya) — Investor Analysis & Recommendation

WTK is one of the strongest, most fundamentally-sound companies on the NSE, even though it is currently going through a rough patch due to global tea prices.

Based on the 2025 half-year results, here is the full breakdown:

1. PROFITABILITY (Short-Term Weakness)

WTK posted a small loss of KSh 10M for the 6 months to Sept 2025.

This loss came mainly from:

• Depressed global tea prices
• Higher operating costs
• Reduced revenue (KSh 1.69B → 1.98B same period last year)

However, the loss is way smaller than the huge KSh 122M loss in 2024.

This shows improvement and better cost management.

 Conclusion: Loss-making now, but losses are reducing → stabilising.

2. BALANCE SHEET (EXTREMELY STRONG)

WTK remains one of the healthiest balance sheets in Kenya.

Key figures:

• Total Assets: KSh 8.02B
• Total Equity: KSh 6.13B
• Debt: Very low (only ~KSh 80M borrowings, small leases)
• Retained earnings: KSh 4.36B

This is a financially solid, asset-rich company.

Conclusion: Strong balance sheet. No risk of collapse. No insolvency issues.

3. DIVIDEND + BONUS ISSUE (Huge Confidence Signal)

WTK declared dividends both in:

• 2024 → KSh 262M
• 2025 → KSh 175M

This is important:

• Companies in distress NEVER pay dividends
• WTK is still paying consistently
• The bonus issue means:
  • They want to improve liquidity
  • Reward long-term shareholders
  • Show confidence in future earnings

4. CASHFLOW (Mixed but Acceptable)

WTK generated positive operating cashflow:

• Cash from operations: KSh +106M
• Ended period with KSh 680M cash, which is excellent for a tea producer.

However:

• Capital expenditure is increasing
• Global tea prices remain uncertain

Conclusion: Cashflow is fine but may remain under pressure if tea prices stay low.

5. RISKS TO WATCH

WTK is strong, but risks include:

• Continued global oversupply of tea
• Lower auction prices
• Climate variability affecting yields
• Higher international shipping & input costs

This is NOT a company risk; it’s an industry cycle risk.

Good news: Tea cycles eventually turn. When prices rise, WTK profits jump sharply.

6. INVESTMENT VIEW: BUY / HOLD / SELL?

✔ Long-Term Investors → BUY

Reasons:

• Strongest balance sheet among agricultural stocks
• Consistent dividends
• Bonus issue = shareholder value
• Low debt = low collapse risk
• Tea is cyclical → recovery upside
• Large asset base (land, factories, biological assets)

WTK is like a value stock + dividend stock + asset-backed stock.

✔ Dividend Investors → BUY

WTK regularly pays dividends even in weak years.

You will not find many NSE companies paying dividends during losses — WTK does.

✔ Defensive Investors → BUY / HOLD

If you want stability, real assets, land, and a company unlikely to collapse → WTK is one of the safest.

⚠ Traders / Short-Term Speculators → HOLD

WTK is slow-moving and not hype-driven.

Not ideal for quick flips unless tea prices spike.

❌ High-Risk Speculators → NOT FOR YOU

If you like penny stock volatility, WTK will feel slow and boring.

This is a value/asset/dividend play — not a pump-and-dump candidate.

FINAL VERDICT: STRONG HOLD / BUY (For Long-Term)

WTK remains one of NSE’s most underrated real-asset companies, despite temporary losses.

If you want:

• Dividends
• Safety
• Asset-backed value
• Stability
• Long-term growth when tea prices recover

👉 WTK is a BUY.

If you want volatility, hype, gambling-style stocks → this is NOT your stock.