8 June 2023
Camellia Plc
(the "Company" or the “Group”)
AGM trading statement
Camellia Plc (CAM.L) has today issued the following update on trading in the year to date.
The Group continues to focus on its core Agriculture operations and is divesting non-core assets
as appropriate opportunities arise.
Trading outlook
Trading in 2023 to date has continued to be mixed albeit it remains very early in the season for a
number of our major businesses. Although we still expect revenue to be ahead of that of 2022,
taking account of the significant continuing pressure on macadamia prices (discussed below), we
now expect that the adjusted profit before tax for 2023 will be below that of 2022. With our
substantial cash resources, our investment portfolio and limited gearing, we continue to be well
placed to withstand a further period of disruption to our operations and sales.
Agriculture - Tea
Tea production in Kenya has started positively in comparison to last year. It is however of
concern to note the violence being perpetrated against large scale tea operations last month in
the Kericho district of Kenya ostensibly as a protest against the use of mechanical harvesting
machines. The Group’s estates have not been affected and it is hoped that the authorities will be
able to maintain order and prevent any repeat of such actions. Malawi production is marginally
ahead of last year despite the damage caused by Cyclone Freddy earlier in the year. It is very
early in the season for India and Bangladesh although it is disappointing to report that the
Dooars in India suffered significant hail damage in March and April.
Tea sale prices are generally below those of last year principally on account of the lack of foreign
exchange in the major consuming countries of Egypt, Pakistan and Iran.
Agriculture – nuts and fruits
The avocado harvest in Kenya has yet to get meaningfully underway. Macadamia production in
Kenya, Malawi and South Africa is in line with expectations with volumes anticipated to be above
those of last year. However , macadamia sale prices have reduced further in the last month and
remain under significant pressure.
The continuing high cost of food in the UK is the subject of much media comment as indeed is
the lack of a reasonable price being paid to farmers for their produce by the major retailers.
Intervention by government has yet to yield any positive assistance to this sector of the
economy. The top fruit harvest in the UK will commence in a few months and it is hoped that the
adverse climate conditions experienced in the last two years will not be repeated. The plan for
the closure of Bardsley England’s West Kent operations and the relocation of all packing to its
Howfield property near Canterbury is proceeding and should be implemented by August.
Following an agreement to terminate the supply contract with its key customer earlier in the
year, Bardsley England is currently tendering its 2023 season fruit for other retail programmes as
well as exploring export opportunities.
Other Agriculture
In Brazil the soya harvest is marginally ahead of last year and it is pleasing to report that the
wine grape harvest in South Africa enjoyed a record year.
Agriculture – costs
The Group’s operations worldwide continue to be impacted by the ongoing war in Ukraine
particularly in respect of energy and fertiliser costs. Wage negotiations are normally carried out
through collective bargaining agreements directly with the unions or employee representatives
involved. There has been a recent tendency for some governments to impose arbitrary wage
awards for political expediency without fully understanding the implications thereof. This is a
worrying trend.
Other Investments
In March the Group’s head office relocated from Linton Park to Wrotham Place near Sevenoaks,
which is a property that has been owned by the Group for many years. Linton Park has been
placed on the market for sale. This move was carried out to reduce costs and release capital.
It was announced earlier this week that the Group had entered into an agreement for the sale of
all the Group’s shares in BF&M Ltd for a price of $100 million, subject to regulatory and tax
approvals. Although it is likely to take some time for such approvals to be secured and the exact
use of proceeds may vary depending on circumstances between now and completion, the funds
realised together with the proceeds from the sale of other non-core assets will give considerable
financial strength to the Group and allow it to accelerate its policy of diversifying its agricultural
operations by crop and geographical location. The objective of disposing of non-core
investments is, with this latest development, well under way.
This announcement contains inside information for the purposes of the UK Market Abuse
Regulation.
Enquiries
Camellia Plc 01622 746655
Malcolm Perkins, Chairman
Susan Walker, Chief Financial Officer
Panmure Gordon 020 7886 2500
Nominated Adviser and Broker
Emma Earl
Rupert Dearden
H/Advisers Maitland
PR
William Clutterbuck 07785 292617
