Camellia PLC AGM Trading Statement (7270A)
June 03 2021 - 6:00AM
UK Regulatory
TIDMCAM
RNS Number : 7270A
Camellia PLC
03 June 2021
3 June 2021
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 We are pleased that, despite the pandemic, all of
our agricultural operations continue to operate. However, the Covid
situation in India remains deeply concerning despite the extensive
efforts made locally to keep all our staff safe, including
restricting workforce deployment to 50% in West Bengal. Very dry
conditions across northern India and Bangladesh to date have also
resulted in reduced production which in turn has led to improved
prices over the same period last year. However, following the
recent elections, wage increases in Assam (backdated to 23 February
2021) have been agreed at 22.75% which is substantially more than
the industry was anticipating. Productivity improvements and other
cost reduction measures are being explored but the benefit of these
may not arise until next year. As a result, the combined impact is
a reduction in operating profits in 2021 of approximately GBP1
million. In Bangladesh there is now some indication that demand may
be adversely impacted due to continuing Covid restrictions and this
is expected to result in some pricing pressure in the coming
months. In Kenya, whilst not quite at 2020's record levels, benign
weather is resulting in very high volumes of tea and consequent
weakness in auction prices which remain marginally behind 2020. In
Malawi, both tea volumes and prices are ahead of 2020 as previously
reported.
The harvest for our Hass avocado crop has started, with early
indications that volumes will be up on last year but that pricing
may be under pressure in what is anticipated to be a well supplied
summer market in Europe.
Our macadamia operations continue to harvest and process their
production with volumes expected to be higher than last year
although as previously indicated, in Malawi pest damage has been
experienced and indications are that this is more extensive than
previously expected. The kernel market is active with both demand
and prices improving.
Our remaining agricultural businesses are trading well, with our
farming operation in Brazil seeing very high soya yields being sold
into a strong market.
Non-agriculture Our non-agriculture businesses in the UK have
had a difficult start to the year with the continuing restrictions
hitting retail and food service. We are optimistic that as the
restrictions continue to ease, trading in these businesses will
improve. Aerospace also remains very quiet and we now anticipate no
improvement in performance for the remainder of the year.
Outlook
Whilst there are signs that normality is returning in some
regions, the speed and intensity at which the pandemic has
re-emerged in India demonstrates the need for continued vigilance.
We have a very strong financial position and believe that over the
long-term demand for our agricultural produce will continue to
rise. 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 2021
however the factors discussed above suggest the results for the
year will be approximately GBP2 million below market
expectations.
The Board of Camellia is also very much aware of the recent
share price performance, which it believes is largely driven by the
weakness in tea prices globally. Whilst there is little we can do
regarding the tea price, a programme is being undertaken to review
all non-core investments and other options with a view to
maximising value for the Group and reducing UK costs. Additional
detail will be issued in due course and as appropriate.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Enquiries:
Camellia Plc
Tom Franks, CEO
Susan Walker, CFO 01622 746655
Panmure Gordon
Nominated Adviser and Broker
Emma Earl
Erik Anderson 020 7886 2500
Maitland/AMO
PR
William Clutterbuck 07785 292617
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END
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