Kakuzi Ltd — Profit Warning Announcement - Update

Kakuzi warns earnings will fall at least 25% amid macadamia market downturn.

What the company is saying

Kakuzi Plc has issued an updated profit warning, formally cautioning investors and the public that net earnings for the year will be significantly below the previous year. The company references its earlier warning from 25 August 2026, which stated earnings could be at least 25% lower year-on-year. The Board now signals a further deterioration, using the phrase 'significantly below' to indicate the decline may exceed the previously stated threshold. The cause is attributed directly to a continued downturn in the macadamia market and a lower macadamia crop, both of which are central to the company's business. The announcement is made under regulatory requirements, specifically citing Paragraph 14.5.7 of the Capital Markets (Public Offers, Listing and Disclosures) Regulations, 2023. Nicholas Ng'ang'a, Chairman, is named as the signatory for the Board, lending institutional authority to the statement. The tone is factual, direct, and negative, with no attempt to soften the impact or suggest near-term improvement.

What the data suggests

The only quantified figure is the previously disclosed threshold: earnings for the year may be at least 25% lower than the previous year. The latest update removes even this lower bound, stating only that net earnings are now expected to be 'significantly below' last year, which implies a worsening outlook but does not provide a new percentage or absolute figure. No actual earnings, revenue, or comparative numbers are provided, limiting the ability to assess the precise scale of the decline. The company attributes the shortfall to both a continued downturn in the macadamia market and a lower crop yield, directly linking operational and market factors to the financial outcome. The disclosure is clear about the negative direction but lacks granularity, offering no mitigating factors or forward guidance beyond the warning itself. The evidence supports a deteriorating financial trajectory with no sign of stabilization.

Analysis

The announcement is a regulatory profit warning update, with the company explicitly stating that net earnings for the year are expected to be significantly below the previous year, following an earlier warning of at least a 25% decline. The language is factual and direct, with no attempt to downplay or inflate the seriousness of the situation. There are no forward-looking promises of recovery or improvement, only a clear statement of deteriorating financial performance due to adverse market and crop conditions. The majority of claims are realised facts (the issuance of the warning, regulatory compliance, and the reasons for the decline), with only the magnitude of the earnings drop being forward-looking. No large capital outlay or future benefit is discussed, and the tone is appropriately cautious. There is no evidence of narrative inflation or overstatement.

Risk flags

• ●Earnings risk is acute, with the company now expecting net earnings to be significantly below the previous year, exceeding the prior warning of at least a 25% decline. This signals a rapid deterioration in profitability, which could affect dividend capacity, debt covenants, or investor confidence.
• ●Market risk is elevated due to the continued downturn in the macadamia market, which directly impacts the company's core revenue stream. If market conditions do not improve, further earnings pressure is likely.
• ●Operational risk is present from a lower macadamia crop, which compounds the market-driven decline. This suggests potential issues with agricultural yields or supply chain factors that could persist into future periods.

Bottom line

Kakuzi Plc's updated profit warning signals a worsening financial outlook, with net earnings for the year now expected to fall at least 25% and likely further below last year's level. The company is explicit that both weak macadamia market conditions and a reduced crop are driving this decline, with no mitigating actions or recovery timeline disclosed. The lack of precise figures means investors cannot quantify the downside, but the language used points to a material deterioration. This announcement is credible and direct, with no evidence of narrative inflation or downplaying of risks. Investors should expect continued earnings pressure until market or crop conditions improve, and should watch for the full-year results to gauge the true extent of the impact. The most important takeaway is that the company's core business is under significant strain, and near-term financial performance will be weak.

Announcement summary

(LSE:KAKU) Kakuzi Plc has issued an updated profit warning notice and cautionary statement to current and potential investors as well as the general public. This update is consistent with the provisions of Paragraph 14.5.7 of the Thirteenth Schedule of the Capital Markets (Public Offers, Listing and Disclosures) Regulations, 2023. The company refers to its previous profit warning announcement dated 25th August 2026, in which it advised that earnings for the year may be at least 25% lower than the previous year. The Board, in its latest review, now expects net earnings to be significantly below the previous year. The primary reasons cited for this expectation are the continued downturn in the macadamia market and a lower macadamia crop. The announcement is made by order of the Board and is signed by Nicholas Ng'ang'a, Chairman. The date of the Board's order is 21st October 2026. The notice is distributed by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. The announcement is directed at both current and potential investors, as well as the general public. The company emphasizes that this is an updated profit warning, following a previous warning earlier in the year. The regulatory framework referenced is the Capital Markets (Public Offers, Listing and Disclosures) Regulations, 2023. The company specifically attributes the expected decline in net earnings to market and crop conditions affecting macadamia. The cautionary statement is intended to inform stakeholders of the anticipated financial performance for the year.

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