Rea Vipingo Plantations Ltd — Mon, February 08 2010 myStocks!

20-Jan-10: Final Dividend: 0.50/= • Books close: 26-Mar-10 • Payment: 15-Jun-10

REA Vipingo Plantations Limited is engaged in the cultivation of sisal and the production of sisal fiber and also acts as a holding company. The principal businesses of the subsidiary companies comprise the cultivation of sisal and the production of sisal fiber and twines. The Company is organized into two principal business segments: sisal, which cultivation of sisal and production of sisal fiber, and spinning and services, which involves conversion of sisal fiber into yarns and twines and other related services. The Company’s operations consist of two main geographical segments: Kenya and Tanzania.

Madison Insurance House Upper Hill Road P.O. Box 17648 Nairobi, Kenya +254-20-2725386 (Phone)
+254-20-2721422 (Fax)

Company website:
http://www.reavipingo.com/
Financial Information | Corporate History/Profile | Executives | Products/Services
Updated: Tue, June 17, 2008

Business Performance

Rea Vipingo is the largest producer of sisal both domestically and regionally. The firm has benefited from the rise in sisal fibre prices and is well positioned in both the bulk market and the niche market hence it is able to extract higher margins from its sales. However, sisal fibre prices seem to have topped out and are unlikely to rise further, hence future revenue growth will emanate from increased sisal production.

The company's revenues grew by 26% to KES 1.10 Billion in the 2004/05 financial-year. This despite the largely dry weather and the strong shilling. Operating profit rose by 7.7% to KES 217.00 Million and as a result. However, net profit decline marginally 3% to KES 124.00 Million mainly due to rising financing costs and a higher tax bill.

Although the main challenge(s) for them remains that of ensuring adequate water supply for the plantations amidst unpredictable rainfall patterns the end of 2006 has seen unprecedented rainfall which should serve to boost Rea's productivity.

Future Prospects

The increased rainfall and the stabilization of the dollar will enhance both output and the value of output and as a result revenue should continue to grow.