Eveready shareholders face dividend drought

Eveready East Africa Limited, Nakuru, November 2014. [Boniface Thuku, Standard]

Consumer goods company Eveready reported a widened loss of Sh50.8 million for the financial year that ended in December, continuing its loss-making streak.

It posted a Sh34.6 million loss the previous year.

The company, which was once Kenya's main dry cell battery maker, saw its sales decrease eight per cent to Sh82.6 million from the previous year, blaming a difficult business environment for the poor performance.

Following the performance, Eveready said it will not pay dividends this year.

"The business environment remained challenging in the year 2022 despite easing Covid-19 restrictions was impacted by operational challenges occasioned by a deficit in working capital, the geopolitical situation, supply constraints following business resumption after two years period of the Covid-19 pandemic and the national general elections," said the firm in a statement.

"The directors do not recommend a dividend."

In its heyday, Eveready roped thousands of retail traders into the Nairobi Securities Exchange (NSE) with a promise of dividends and capital gains, but it has not lived up to this promise.

Shareholder wealth

Listed in 2006, the firm's share price has declined from a peak of Sh28 shillings to just over Sh1, eroding shareholder wealth after its earnings were hit by rising costs and counterfeits which affected demand.

The company, which also sells products such as flashlights and razors, still faces those challenges.

Its management has annually said it has devised plans to get the business back to growth without offering further details.

Eveready, which held the record for the highest subscription rate when it announced its initial public offering, has struggled to give a return to investors.

The firm had gone for seven years without paying dividends until 2017 when it paid a Sh210 million dividend.

But that was after selling its land in Nakuru as it exited the battery manufacturing business.

Once known for its Eveready batteries and the nine lives logo, the firm no longer stocks this brand.

It had a complicated relationship with Energizer International, which owned 10.03 per cent of Eveready but used to control over 80 per cent of the company's revenue.

Energizer International cut the 50-year-old contract as a chief supplier of Eveready batteries in 2015, throwing Eveready East Africa off balance.

The management has had to start working on a new brand, Turbo, and embarked on selling imported dry cells and car batteries and also trading in a range of flashlights and washing detergents.