REG - Camellia PLC - AGM Trading Statement

CamelliaAnnouncement

30/06/2022 07:16

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RNS Number : 7136Q  Camellia PLC  30 June 2022

30 June 2022

AGM Trading Statement

Camellia Plc (the "Company")

Camellia Plc (CAM.L) has today issued the following update on trading in the
year to date.

Trading

Agriculture - Tea

Heavy monsoonal conditions across northern India and Bangladesh have resulted
in reduced production.  In India, the lower volumes have led to improved
prices over the same period last year. In Bangladesh however, prices remain
below those of the same period last year.  Wage increases in West Bengal
(effective 1 January 2022) have recently been agreed at 15%, substantially
higher than the industry was anticipating.  Wage increases for Assam remain
under negotiation.  Productivity improvements and other cost reduction
measures are being explored in mitigation.

In Kenya, higher average prices have prevailed in the year to date but this
has been partially offset by a crop volume which is lower than in the same
period of last year and more in line with historic averages. Pricing levels
going forward will largely depend on national production volumes.

In Malawi, tea volumes are in line with historic averages but lower than those
of 2021 and prices (as previously reported) remain under pressure.

Agriculture - nuts and fruits

Our macadamia operations continue to harvest and process their production with
volumes expected to be higher than last year although as previously indicated
pricing, particularly for commercial grades is under pressure.

The Hass avocado harvest has started, with early indications that volumes will
be above those of last year but that pricing is likely to be under pressure in
what is anticipated to be a well supplied summer market in Europe.

At Bardsley England the cherry, plum and apricot volumes appear reasonable for
this coming season, with the cherry harvest already started. There are good
indications for an improved apple crop later in the year.  Inflation is
continuing to impact profitability and integration challenges remain.

Other Agriculture

Our remaining agricultural businesses are trading well, with our arable
farming operation in Brazil selling into strong markets.

Other Investments

Our non-agriculture businesses in the UK have had a difficult start to the
year.  AJT Engineering continues to face challenges due to supply chain
delays and cost inflation.  ACS&T has received notice of termination from
a substantial customer, however, it has been successful in partially
offsetting the revenue and profit impact following new storage customer wins.

BF&M, our 37.4% owned associate, recently issued its first quarter results
for 2022 which, disappointingly, show a loss after tax for the period of
Bermudian dollar 6.7 million (1(st) quarter 2021 - profit after tax Bermudian
dollar 6.5 million).  In the year ended 31 December 2021, Camellia's share of
the results of BF&M contributed £6.4 million to Group profit. BF&M's
Q1 2022 results were negatively impacted by investment income losses driven by
rising interest rates and stock market volatility. Underwriting results were
impacted by increases in reinsurance costs and there were higher than
anticipated medical claims in the first quarter.

Outlook

As always, our financial results remain largely dependent on Agriculture where
the majority of harvesting, and hence sales, takes place in the second half of
the year. It is therefore too early to give a firm indication of the likely
results for 2022 however despite an expected net positive profit impact from
the factors set out above in respect of our Agriculture, Engineering and Food
Service businesses, if the trading conditions experienced by BF&M in Q1
2022 continue through the remainder of the year it will lead to an overall
adjusted profit before tax* for the Group which is significantly lower than
market expectations.

As previously reported the Group continues its strategy to expand the
Agriculture division to further diversify both by crop and location, and to
dispose of non-core assets.

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014.

 

* adjusted profit before tax seeks to present an indication of performance
which is not impacted by exceptional items or items considered non-operational
in nature and for example it excludes impairment charges, gains/losses on
disposal of assets and restructuring costs.

 

Enquiries

Camellia Plc
 
            01622 746655

Malcolm Perkins, Chairman

Susan Walker, CFO

Panmure Gordon
              020 7886 2500

Nominated Adviser and Broker

Emma Earl

Erik Anderson

Maitland/AMO

PR

William Clutterbuck
              07785 292617

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