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RNS Number : 1147Y  Camellia PLC  05 September 2025

5 September 2025
Camellia Plc

('Camellia', the 'Company')

Half year results for the six months ended 30 June 2025

'Stable trading performance and progress on Value Enhancement Plan'

Camellia is pleased to announce its half year results for the six months ended
30 June 2025 ('HY25') and give an indication of expected production and price
ranges for its agricultural operations for 2025.

The first half results reflect the seasonality of the business with the cost
base for most of Camellia's operating companies spread fairly evenly
throughout the year, while the majority of revenues arise in the second half
of the year. Both annual crop yields and realised pricing remain uncertain at
this point in the calendar, making it difficult to predict the full year
outcome. With this context in mind the Board's current expectation is that the
Company will see higher full year revenues and improved trading performance in
2025 compared to 2024.

HY25 Financial Highlights:

·      Revenue was £107.7 million (H1 24 £105.1 million)

·      Trading loss was £9.6 million (H1 24 £9.7 million)

·      EBITDA loss was £6.2 million (H1 24 loss £1.9 million)

·      Loss before tax was £10.4 million (H1 24 loss £11.0 million)

·      Loss attributable to shareholders was £11.8 million (H1 24 loss
£13.6 million)

·      First half losses in part reflect crop seasonality

·      Net assets reduced to £312.4 million at 30 June 2024 (31Dec 24
£347.7 million) due to shareholder capital distributions, losses in the
period and translation losses on overseas subsidiaries opening net assets

·      Cash and liquid assets at 30 June 2025 of £81.7 million (31 Dec
24 £21.3 million)

·      Proceeds of £11.2 million from sales of a tea estate, properties
and collections

·      Distributions to shareholders of £18.9 million through Tender
Offer, on-market share buyback programme, and final ordinary dividend

·      Final ordinary dividend of 260p in respect of the 2024 financial
year approved at the AGM, equating to £6.6 million outflow (2023 financial
year: Nil)

HY25 Operational Highlights:

·      Strategic direction provided through announcement of the Value
Enhancement Plan ("VEP") in May 2025, with focus on improving overall business
performance and providing sustainable and growing shareholder returns

·      Strengthened cash position through disposals of non-core and
non-operating assets

·      Mature hectarage increased to 49.4k Ha (31 Dec 24 48.5k Ha).
Immature hectarage decreased to 4.6k Ha (31 Dec 24 5.5k Ha)

·      Continued investment in the Tanzanian avocado farm to support
growth, with a further 92Ha planted taking the total to 448Ha out of 650Ha

·      Ongoing investigation and trials into new crops to support
diversification

·      Two new Managing Director appointments for India and Bangladesh

CEO'S STATEMENT:

Trading results for the first half were similar to those for the corresponding
period for 2024. This has arisen from better results in Malawi and Brazil
offsetting poorer results primarily from the tea businesses in Bangladesh and
Kenya, and a lower profit from Kakuzi.

The key event in the period was the announcement in May 2025 of the Value
Enhancement Plan ('VEP') designed to improve the performance of the Company,
by generating sustainable and growing profitability for the benefit of all
stakeholders. The VEP, based on a medium-term view, is designed to support
improved operating results and increased growth investment, while also
reducing the overall risk profile of the Company. This includes realising the
significant potential within the operating companies and disposing of higher
risk and less predictable operating assets.

Progress has been made on the VEP with the disposal of two tea estates in
India (one post period end), five properties, and continued disposals from the
collections. These actions have further strengthened the cash position,
supporting the Company's articulated capital allocation priorities of:
maintenance of a strong balance sheet; payment of ordinary dividend; and
investment in the business.

During the period, the Company made further investments in avocado planting in
its Tanzanian avocado business and continued with its multi-year investment in
additional pivot irrigation and renovation of dams within its Brazilian arable
business. Additionally, the Company is examining a number of organic
investments with good return profiles, and is actively undertaking
investigations and trials into new crops to support business diversification
and fully exploit the value of its land holdings.

The Tender Offer was completed in June 2025 with £11.6 million returned to
shareholders.  This, coupled with the, now concluded, on-market share buyback
programme, and final dividend of 260p per share has resulted in distributions
to shareholders of £18.9 million in 2025.

In line with its articulated capital allocation priorities the Company has
transitioned to a policy of considering a single annual dividend and is
therefore not declaring an interim dividend. This policy has been adopted
because most crop revenues are realised in the second half of the year making
annual financial performance difficult to forecast until year end.

Whilst it is still early to get a clear outlook of results for the full year,
it is currently expected that both revenues and trading performance will show
an improvement on 2024.

Operational Report

India

Tea production in India for H1 2025 was down 7% on last year due to dry
weather and high temperatures affecting crop.  Market pricing for this
season's production was also down slightly on last year on a weighted average
basis.  Sales have been affected by the ongoing geo-political issues in the
Middle East which reduced demand for orthodox teas.  In H1 2025 there has
been a significant increase in bought leaf volumes in Assam and North Bengal
which has put pressure on CTC sales and pricing.

Packet tea sales were down 13% over the period in comparison to last year, but
pricing was up 13%. Work is underway to re-focus this business unit on higher
margin product lines. Instant tea sales volumes are down 9% with pricing also
down slightly by 2% due to timing. This is expected to reverse in H2 2025 with
the introduction of new clients. In aggregate, results for H1 25 were in line
with the same period in 2024.

During H1 2025 the sale of one Dooars tea garden, Chulsa Tea Estate, was
successfully completed with proceeds of £1.6 million. The sale of a second
Dooars garden, Leesh River Tea Estate, was completed in July with proceeds of
£2.2 million. The business is looking to diversify its crops in India and has
several trials in progress to assess feasibility. New trials in garlic,
turmeric, ginger and livestock are underway as well as the roll out of
increased mechanical plucking. The business has increased its investment in
tea tourism opportunities in Darjeeling.

Mr Shaibal Dutt has been appointed as Managing Director of the Indian
businesses with effect from September 2025.

Bangladesh

As a result of a very dry winter followed by a dry start to the new season,
tea production is down 26% for H1 2025 compared with last year. Production
began to recover with the onset of the rains in Q2. Bolstering overall sales
in H1 2025 was the carry-over of a higher than usual 4.7m kgs of stock from
2024 which was fully sold in the period.

The Tea Board of Bangladesh introduced a minimum pricing mechanism to improve
the sustainability of the industry in 2024. The 2025 minimum price for tea has
been set at 245 Taka per kg, up 53% on the prior year.  Taking into account
the sale of the 2024 carry-over stock at prices before the introduction of the
new minimum price, overall pricing to-date is up 31% on H1 2024. However,
revenues remain below the cost of production due to the very poor yields
achieved year to date. The business is actively looking at ways to improve
operational efficiency including through the addition of a new production line
at the Lungla tea factory. Opportunities to realise income from non-operating
assets are also being explored.

Mr Mustafizur Rahman was appointed as Managing Director of the Bangladesh
businesses with effect from January 2025.

Eastern Produce Kenya

The first quarter of 2025 saw the more traditional dry weather pattern emerge,
resulting in volumes being down 23% on H1 2024. Pricing has remained under
pressure as a result of the over supplied Kenyan market. The ongoing
geopolitical and economic challenges in key buying countries are impacting
demand.  Pricing in H1 2025 was down 1% on the same period last year and
stocks of Kenya teas continue to grow. The business continues to explore
options to improve efficiency and productivity, and the company has approved
the installation of solar panels at its Chemomi estate. The litigation matters
over an illegal incursion on Sitoi Estate, that occurred early in the year,
remain in court and the focus is on continuing to ensure people's safety.

Kakuzi

There was an increase in export volumes of both Pinkerton and Carmen avocado
varieties in comparison to the same period last year. However, Hass avocado
volumes are down on the same period last year as the company slowed harvesting
in reaction to the short term market over supply. Volumes are expected to
accelerate rapidly as market conditions improve and expectations are that
total volumes will eventually exceed last year.

The avocado market has seen Pinkerton pricing up 60% for H1 2025 due to its
early arrival in April to a volume-depleted European market.  Pricing through
June for Hass was down 36% on last year due to an oversupply of Peruvian fruit
in the market. However, it is still early in the season for Kenyan Hass and
prices are expected to improve as Peruvian seasonal supply declines in the
mid-summer months.

There have been successful trial shipments through the Red Sea which should
lead to higher volumes being shipped through this normal route to market. The
benefits of a return to this logistic would be significant in terms of reduced
costs and improved fruit integrity and quality on arrival in Europe.

Macadamia production was up 41% on the same period last year due to good
weather conditions and the young orchards continuing to mature.  The market
has also strengthened on last year with pricing up 53% in H1 2025.

Malawi

Tea production for H1 2025 from Eastern Produce Malawi (EPM) is slightly down
on the same period last year.  Pricing has been under pressure due to the
continued over supply of tea in the export market from Kenya, with prices down
5% on the same period as last year.

Macadamia production recovered from last year, up 61% in H1 2025 compared with
H1 2024 due to improved growing conditions.  Pricing has also recovered - up
33% on last year.

A government gazetted minimum wage increase of 40% from the 1 June has
increased costs considerably and imposed significant pressure on the
operations to cut costs and improve operational efficiency.  There has been
no devaluation of the Kwacha in the first half of 2025.

During the period, a new revenue stream has been started which supplies
fertiliser to an agricultural producer in Malawi. This new business has
significantly improved the trading and the cash flow of the business.

Tanzania

Avocado planting has continued in 2025 with a further 92Ha planted, taking the
total to 448Ha. The business remains in the developmental stage with the
operation continuing to invest in orchard and infrastructure establishment.
The construction works on the main dam continue to make good progress. The
avocado cropping season is anticipated to commence at the end of Q3.

South Africa

The 2025 Eastern Produce South Africa macadamia crop was adversely impacted by
frost during flowering in 2024.  The current production is down 29% compared
with H1 2024.  The South African national crop is reported down on last year.
The Australian crop is also down on last year resulting in market prices up
77% on H1 2024.  The current year crop is well sold with the majority
contracted for delivery in the second half of the year. The company has
reduced its cost base through rationalisation of its management structure and
the closure of its regional office.

Brazil

Farming conditions greatly improved for this first half of the year enabling
significantly increased production of soya up 27% on the same period last
year.  The operation has invested heavily in irrigation infrastructure this
year with five new pivots established totalling 200Ha and extensive dam
renovations continuing.

A new partnership for growing 200Ha of potatoes commenced, and 233Ha of land
is in the process of being repurposed from commercial forestry to arable
production to accelerate cash generation and improve margins. The total area
repurposed in this way since 2020 is 722Ha.

Other businesses

Jing's revenues are up 13% on 2024 with a loss of £0.5 million (2024 H1:
£0.7million loss).  AJT's revenues are up 22% from last year with a profit
of £1.4 million (2023 H1: £0.4 million profit). AJT plans to invest in a new
horizontal borer to improve its capabilities.

There is an active sales process in place for the vineyard in South Africa.

Corporate

Five properties were sold in H1 25, with profit on sales of £1.6 million and
proceeds of £8.8 million.  The collections and manuscripts are also being
sold systematically with £0.8 million of proceeds in H1 and profits of £0.4
million. In addition, £2.9 million was realised in relation to the Group's
equity investments, being £0.1 million above their carrying value.

The weakening of the dollar over the first half of 2025 led to losses from the
Company's strategic reserve holdings in US dollars of £3.4 million.  The
Company will continue to hold US dollars as the majority of investment
opportunities are anticipated to be linked to this currency.

Financial Summary Table for six months ended 30 June 2025:

 Financial Highlights                                        HY25       HY24
                                                             £'m        £'m
 Continuing operations
 Revenue                                                     £107.7     £105.1
 Trading loss*                                               (£9.6)     (£9.7)
 Separately disclosed significant items                      £2.5       £0.6
 Other losses**                                               (£4.2)    -
 Operating loss                                              (£11.2)    (£8.7)
 Loss before tax                                             (£10.4)    (£11.0)
 Adjusted loss before tax                                    (£12.9)    (£11.6)
 Taxation                                                    (£1.3)     (£2.1)
 Loss after tax                                              (£11.7)    (£13.1)
 Loss on discontinued operations                             -          (£0.9)
 Loss after tax                                              (£11.7)    (£14.0)
 Loss attributable to shareholders                           (£11.8)    (£13.6)
 EBITDA                                                      (£6.2)     (£1.9)

 Loss Per Share from Continuing Operations                   (429.0)p   (459.8)p
 Loss Per Share from Continuing and Discontinued Operations  (429.0)p   (492.4)p

 Net cash, treasury deposits and money market instruments*   £81.7      £21.3
 Net Assets***                                               £312.4     £357.2

* Additional performance measures, reconcilable in the financial statements /
notes below.

** Includes a £3.4 million exchange loss on US$ treasury deposits at a rate
of £/US$ of 1.3704.

*** Includes impact of strengthening sterling, HY25 v HY24 currency movements
of between 8% and 13% against majority of our operating currencies and costs
of tender offer.

Key Crops Production and Price Range Table:

While premature to provide firm indications for agricultural trading results
for 2025, the table below shows the currently expected range of production and
price for the operating companies' key crops.

Production is primarily influenced by weather patterns during the growing
season, and each country / crop has different pricing dynamics influenced by
production, both in country and globally, as well as demand.

                                       2024    2025    2024    2025
 India                                 H1      H1      Actual  Low                                                     High
 Own tea production     (million kg)   8.9     8.3     27.9    25.5                                                    27.0
 Ave. tea sales price   (INR / kg)     264     280     264     210                                                     240
 Bangladesh
 Own tea production     (million kg)   4.0     3.0     15.2    13.75                                                   14.5
 Ave. tea sales price   (BDT / kg)     128     188     176     190                                                     220
 EP Kenya
 Own tea production     (million kg)   8.3     6.4     16.5    14.1                                                    14.7
 Ave. tea sales price   (USD / kg)     1.84    1.82    1.84    1.76                                                    1.84
 Kakuzi
 Avocado production     (k cartons)    1,118   901     2,258   *                                                       *
 Ave. avo' sale price   (€/ carton)    5.17    4.29    4.65    *                                                       *
 Macadamia production   (tonnes)       293     413     723     *                                                       *
 Ave. mac' sales price  (USD / kg)     7.54    11.56   7.89    *                                                       *
 Malawi
 Own tea production     (million kg)   13.3    12.9    20.2    17.1                                                    19.1
 Ave. tea sales price   (USD / kg)     1.23    1.17    1.18    1.10                                                    1.20
 Macadamia production   (tonnes)       267     430     267     528                                                     528
 Ave. mac' sales price  (USD / kg)     7.74    10.29   7.02                             11.00                                      11.30
 EPSA
 Macadamia production   (tonnes)       157     111     416     440                                                     460
 Ave. mac' sales price  (USD / kg)     6.70    9.65    7.94    11.50                                                   12.00
 Brazil
 Soya production        (tonnes)       13,727  17,489  13,700  17,621                                                  17,621
 Ave. soya sales price  (BRL / tonne)  2,129   2,118   2,138   2,124                                                   2,124
 Maize production       (tonnes)       10,450  5,397   11,733  16,946                                                  16,946
 Ave maize sales price  (BRL / tonne)  962     1,211   1,020   1,000                                                   1,300

 

* As Kakuzi is a listed entity, it is not possible to provide unpublished
forward-looking guidance.

This announcement forms the Company's half year report for the six months
ended 30 June 2025, which is available to view and download from the Company's
website at https://www.camellia.plc.uk/investors/company-reports/.

This announcement contains inside information under Article 7 of the Market
Abuse Regulation (EU) No. 596/2014, as part of UK domestic law via the
European Union (Withdrawal) Act 2018.

Enquiries:

Camellia Plc
                                           01622
746655 /

investorrelations@camellia.co.uk (mailto:investorrelations@camellia.co.uk)

Byron Coombs, Chief Executive

Oliver Capon, Chief Financial Officer

Panmure Liberum (Nominated Adviser and Broker)
      020 7886 2500

Emma Earl

Rupert Dearden

Equitory Limited (Investor Relations)
                       07909918034

Catherine Miles

H/Advisers Maitland (Financial PR)
                         07785 292617

William
Clutterbuck

Investors can register to receive updates and news from the Company by
registering their email address at investorrelations@camellia.co.uk
(mailto:investorrelations@camellia.co.uk) .

 

About Camellia:

Camellia Plc is the ultimate holding company of a group of agricultural
businesses incorporated in jurisdictions across the world (the 'Operating
Companies'), while also owning and operating other assets outside of
agriculture.

Camellia's purpose is to grow and nurture agricultural businesses and assets
of the highest quality - creating value for today's shareholders, while
investing for the long term. Camellia's Operating Companies are committed to
working fairly, sustainably and with integrity for the wellbeing of their
employees, communities, and the natural environment.

The Operating Companies collectively own and manage circa 50,000 hectares of
mature land across seven countries (Bangladesh, Brazil, India, Kenya, Malawi,
South Africa, and Tanzania).

The majority of the Group's revenue is derived from the growing of tea,
avocado, macadamia, rubber, wine grapes, blueberries, arable crops, forestry
and livestock. The Operating Companies have well-established and
industrial-scale operations, with reputations for high-quality products.

 

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