REG - Camellia PLC - Trading Update

CamelliaAnnouncement

27/09/2023 10:15

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RNS Number : 8463N  Camellia PLC  27 September 2023

27 September 2023

Camellia Plc

(the "Company" or the "Group")

 

Trading update

 

The last quarter of the year is a critical trading period for our Group. This
is due to the seasonal nature of our crops, with a substantial proportion of
our tea production and sales occurring in that period in conjunction with
substantive avocado and macadamia sales. While it therefore remains difficult
to predict the outcome for the full year, there has been a significant
deterioration in our expectations for certain of our businesses in recent
weeks.

 

Tea

Kenya and Bangladesh production to the end of September is ahead of
expectation.  However due to weather conditions, tea production in India for
the same period has been materially below expectation at only 3-4% ahead of
last year and critically, this trend is now anticipated to continue for the
remainder of the key cropping months.  Lower production has also been
experienced in Malawi due to very dry conditions experienced following cyclone
Freddy in March.  On a combined basis, Group tea estate production is now
expected to be only c 7% ahead of prior year.  Bought leaf volumes in India
are also tracking below that previously expected.

 

Our average prices achieved in India and Malawi have also been substantially
below expectations and market conditions suggest this is likely to continue
for the remainder of the year.  Prices in Kenya in September were marginally
higher than expected.

 

The market for branded teas in India remains competitive. Although at Jing
Tea, our UK branded business, where sales are up 15% in the year to date,
lower than expected occupancy levels in the hotel and leisure sector globally
continues to constrain growth.

 

Avocado

Average selling prices for our Hass crop to date have been significantly below
expectations which will impact full year results. However, there are signs
that market prices are recovering as we move into our peak period for
deliveries into Europe.

 

Other fruits

The Gala apple harvest at Bardsley is underway with fruit quality improved on
that of last season.  However, the pear and Bramley crops are 25% and 40%
respectively lower than expected. Much of the sales programme for the 2023
harvest is now in place with prices improved only marginally on those of last
year.  Price increases achieved are insufficient to fully compensate for the
cost inflation experienced over the last 18 months.

 

Other crops

Average selling prices for maize and wheat have deteriorated significantly
during the last few weeks as the scale of production in South America has
become clearer.

 

Outlook

Despite the difficulty in forecasting, if current market pricing and
production trends continue through the remainder of the year, revenue for
continuing operations* for 2023 would be expected to be in the region of £283
million to £287 million with an adjusted loss before tax for continuing
operations** of c£9 -11 million.

 

 

*   continuing operations are all operations except for ACS&T which was
sold at the end of 2022

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

 

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

 

Enquiries

 

Camellia Plc
 
01622 746655

Malcolm Perkins, Chairman

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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