Camellia PLC AGM Trading Statement (7136Q)
June 30 2022 - 1:00AM
UK Regulatory
TIDMCAM
RNS Number : 7136Q
Camellia PLC
30 June 2022
30 June 2022
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 - Tea
Heavy monsoonal conditions across northern India and Bangladesh
have resulted in reduced production. In India, the lower volumes
have led to improved prices over the same period last year. In
Bangladesh however, prices remain below those of the same period
last year. Wage increases in West Bengal (effective 1 January 2022)
have recently been agreed at 15%, substantially higher than the
industry was anticipating. Wage increases for Assam remain under
negotiation. Productivity improvements and other cost reduction
measures are being explored in mitigation.
In Kenya, higher average prices have prevailed in the year to
date but this has been partially offset by a crop volume which is
lower than in the same period of last year and more in line with
historic averages. Pricing levels going forward will largely depend
on national production volumes.
In Malawi, tea volumes are in line with historic averages but
lower than those of 2021 and prices (as previously reported) remain
under pressure.
Agriculture - nuts and fruits
Our macadamia operations continue to harvest and process their
production with volumes expected to be higher than last year
although as previously indicated pricing, particularly for
commercial grades is under pressure.
The Hass avocado harvest has started, with early indications
that volumes will be above those of last year but that pricing is
likely to be under pressure in what is anticipated to be a well
supplied summer market in Europe.
At Bardsley England the cherry, plum and apricot volumes appear
reasonable for this coming season, with the cherry harvest already
started. There are good indications for an improved apple crop
later in the year. Inflation is continuing to impact profitability
and integration challenges remain.
Other Agriculture
Our remaining agricultural businesses are trading well, with our
arable farming operation in Brazil selling into strong markets.
Other Investments
Our non-agriculture businesses in the UK have had a difficult
start to the year. AJT Engineering continues to face challenges due
to supply chain delays and cost inflation. ACS&T has received
notice of termination from a substantial customer, however, it has
been successful in partially offsetting the revenue and profit
impact following new storage customer wins.
BF&M, our 37.4% owned associate, recently issued its first
quarter results for 2022 which, disappointingly, show a loss after
tax for the period of Bermudian dollar 6.7 million (1(st) quarter
2021 - profit after tax Bermudian dollar 6.5 million). In the year
ended 31 December 2021, Camellia's share of the results of BF&M
contributed GBP6.4 million to Group profit. BF&M's Q1 2022
results were negatively impacted by investment income losses driven
by rising interest rates and stock market volatility. Underwriting
results were impacted by increases in reinsurance costs and there
were higher than anticipated medical claims in the first
quarter.
Outlook
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 2022
however despite an expected net positive profit impact from the
factors set out above in respect of our Agriculture, Engineering
and Food Service businesses, if the trading conditions experienced
by BF&M in Q1 2022 continue through the remainder of the year
it will lead to an overall adjusted profit before tax* for the
Group which is significantly lower than market expectations.
As previously reported the Group continues its strategy to
expand the Agriculture division to further diversify both by crop
and location, and to dispose of non-core assets.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
* adjusted profit before tax seeks to present an indication of
performance which is not impacted by exceptional items or items
considered non-operational in nature and for example it excludes
impairment charges, gains/losses on disposal of assets and
restructuring costs.
Enquiries
Camellia Plc 01622 746655
Malcolm Perkins, Chairman
Susan Walker, CFO
Panmure Gordon 020 7886 2500
Nominated Adviser and Broker
Emma Earl
Erik Anderson
Maitland/AMO
PR
William Clutterbuck 07785 292617
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