Unga Group said it will reinvest all earnings and will not recommend a dividend for the year ended June 2026, reversing earlier statements that it would resume dividend payments after returning to profitability.
The Nairobi Securities Exchange-listed firm reported net income of KSh404.5 million for the year, an 82.2 per cent increase from the previous period, and said the priority is to convert the improved momentum into sustainable, profitable and cash-generating growth.
The company’s share price has risen 10 per cent since the dividend freeze began and has traded below KSh39.3 for most of the period; the latest profit would cover the previous dividend level of KSh0.5 per share or KSh37.8 million more than ten times.
Unga Group last paid a dividend of KSh0.5 per share, totalling KSh37.8 million, for the year to June 2019 when it recorded a net profit of KSh544.8 million, and instituted the dividend freeze the following year, maintaining the suspension through subsequent losses and profits.
The firm has no publicly stated dividend policy but previously said it would resume payouts on a return to profitability and strong cash generation; in 2023, after a net loss of KSh959.3 million, it told shareholders to be patient and promised that its new strategic plan would restore profitability and dividend payments.
Emerging from losses in 2025 with a net income of KSh222 million, the company noted in its 2025 annual report that cash from operations rose to KSh1.085 billion from a cash outflow of KSh725 million in 2024, giving flexibility to reduce debt, fund strategic capital expenditure internally and support future dividend considerations.
The profit surge was helped by sales growth of KSh4.3 billion to KSh30.4 billion, up from KSh26.1 billion a year earlier, and an increase in gross profit margin from 2.7 per cent to 3.08 per cent, the company said, adding that higher volumes across animal and human nutrition businesses drove the revenue growth.
The firm said cost management and improved operational efficiency enabled the conversion of this growth into better profitability, while the animal nutrition division performed strongly on market expansion, distribution improvements and market-share gains, and the human nutrition division recorded growth but faced margin pressure from intense price competition and raw-material cost volatility.
Unga Group holds a 65 per cent interest in its operating businesses, including Unga Farm Care (E.A.) and Unga Limited; Seaboard Corporation holds the remaining 35 per cent stake in those businesses and a direct 18.47 per cent interest in Unga Group acquired in 2018, and the Philip Ndegwa family remains the top shareholder with a 50.93 per cent stake.
Finance costs fell to KSh261.3 million from KSh394.5 million, a benefit that corporate borrowers have enjoyed alongside a fall in lending rates and a stable shilling.
The company paid income tax of KSh339.1 million on pre-tax earnings of KSh743.6 million, an effective tax rate of 45.6 per cent, compared with an effective rate of 34.8 per cent the prior year when it paid KSh118.7 million on pre-tax earnings of KSh340.8 million.
Unga Group also completed a biomass installation at one of its sites as part of efforts to cut costs and meet its environmental goals.
The firm noted that a few other NSE-listed companies, such as Sameer Africa, are also not paying dividends despite posting profits.
