REG - Camellia PLC - Refocussing investments & Bardsley England update

CamelliaAnnouncement

04/01/2024 16:00

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RNS Number : 7045Y  Camellia PLC  04 January 2024

4 January 2024

Camellia Plc

(the "Company" or the "Group")

 

Update on refocussing investments and Bardsley England

 

Progress in refocussing investments

BF&M

As announced on 6 June 2023, we agreed the sale of our 37% holding in BF&M
to Bermuda Life Insurance Company Limited, a subsidiary of Argus Group
Holdings Limited ("Argus") for a cash consideration of $100m (the "Sale"),
conditional on receipt of a number of regulatory and tax approvals.

 

Following the announcement of this proposed disposal, BF&M's board
implemented a shareholder rights agreement, the objective of which was to act
as a 'poison pill' in the event of any new shareholder seeking to register a
more than 15% shareholding without BF&M's consent. This shareholder rights
agreement has since been removed. However, BF&M has since separately
announced a partnership with Equilibria Capital Management Limited (Argus'
major shareholder) under which Equilibria will grant BF&M an exclusive
option to acquire a 13.7% stake in Argus. As part of this partnership,
BF&M has also committed to a significant investment in a dedicated
Equilibria investment fund which will include the initial investment in
respect of a 16.3% stake in Argus.

 

These developments have impacted the anticipated timetable for regulatory
approvals for the Sale such that we now expect it to be delayed into Q1 2024.

 

Collections

In line with the stated strategy, the Company sold a significant number of
items from the manuscript collection, predominantly at auction in December
2023, generating net proceeds of approximately £2.6 million. A gain on
disposal of approximately £1.9 million will be reflected in the 2023 results.

 

Bardsley England

Since acquisition and as previously announced, Bardsley England has
consistently failed to perform to expectation incurring significant losses in
each year. A combination of factors has contributed to this unacceptable
outcome. These include above inflation increases in labour costs, due to
government policy on pay for seasonal workers which had a consequent impact on
wage rates for permanent workers. In addition, very high inflation in
electricity, fertiliser, chemicals and fuel costs as a result of the Ukraine
war had an indirect inflationary impact on other costs. Although consumers
have experienced significant food inflation, key retail customers have
continued to resist any meaningful selling price increases. The sales
programme for the Bardsley's 2023 harvest is in place but unfortunately prices
achieved are insufficient to make any meaningful headway into the cost
inflation experienced over the last two years. Attempts to mitigate cost
increases through the restructurings undertaken in 2021 and again in early
2023 have had limited impact.

Most of the UK top fruit sector is experiencing difficulties and many
producers have removed orchards, discontinued planting and in the worst cases
stopped farming. Similar cases are reported in the wider fresh produce sector.

Considering the trading environment, and despite the significant efforts made
by Bardsley's management to increase efficiency and to explore new more
profitable markets, it has become apparent that there is no reasonable
turnaround plan which would result in a profitable business.  The losses are
unsustainable and as a result Bardsley England is now consulting with its
employees on a proposed orderly wind down of the business. Customer's
programmes for the 2023 harvest will be supported with closure of all
operations expected in Q2 2024. In the meantime, Bardsley England is seeking
to maximise the value realisation from its assets.

An update on Group trading will be provided when appropriate.

 

 

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation.

 

Enquiries

 

Camellia Plc
 
01622 746655

Byron Coombs, CEO

Susan Walker, Chief Financial Officer

 

Panmure Gordon
 
020 7886 2500

Nominated Adviser and Broker

Emma Earl

Rupert Dearden

 

H/Advisors Maitland

PR

William Clutterbuck
 
07785 292617

 

 

 

 

 

 

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