RNS Number:3490K
Camellia PLC
24 April 2003


Preliminary Announcement - Year Ended 31st December 2002

Consolidated Profit and Loss Account
for the year ended 31st December 2002

                                        2002                2001

                                  #'000      #'000     #'000     #'000

                                                          Restated

Turnover - continuing 
           operations                      169,511             170,996

         - discontinued 
           operations                        7,012              32,351
                                           -------             -------
                                           176,523             203,347

Cost of sales                              134,997             156,851
                                           -------             -------
Gross profit                                41,526              46,496

Net operating expenses                      35,537              34,592
                                            ------              ------
Operating profit - continuing   
                   operations     5,853               11,201

                 - discontinued    
                   operations       136                  703 
                                  -----               ------
                                             5,989              11,904

Share of results of associates              11,670               5,349
                                            ------              ------
                                            17,659              17,253

Investment income                            1,431               1,453

Profit on disposal of fixed                    
 assets                                        195                  24

Profit on disposal of fixed
 asset investments                             170                 573

Profit on disposal of
 subsidiary undertakings                       255                 424

Goodwill transferred upon part
 disposal of a subsidiary                        -                 704

Share of associate's profit on
 disposal of a subsidiary                        -               2,065
                                            ------              ------
                                            19,710              22,496
                                           
Net interest payable and similar            
 charges                                     4,281               4,940
                                            ------              ------
Profit on ordinary activities
 before taxation                            15,429              17,556

Taxation on profit on ordinary               
 activities                                  4,827               4,183
                                            ------              ------
Profit on ordinary activities
 after taxation                             10,602              13,373

Interest of minority                         
 shareholders                                3,453               3,146
                                            ------              ------
Profit for the year                          7,149              10,227

Dividends                                    2,270               2,303
                                             -----              ------
Retained profit for the year                 4,879               7,924
                                             =====              ======

Earnings per share                          269.57p             374.48p
                                            =======             =======




Consolidated Balance Sheet
as at 31st December 2002

                                     2002                   2001

                               #'000      #'000       #'000      #'000

                                                          Restated
Fixed assets
Intangible assets
Goodwill:

 Positive                      1,265                  1,219

 Negative                     (3,648)                (4,074)
                               -----                  -----
                                         (2,383)                (2,855)

Tangible assets                         166,232                172,574

Investments                              79,387                 72,219
                                        -------                -------
                                        243,236                241,938

Current assets
Stocks                        31,467                 34,100

Debtors                       56,650                 55,514

Cash at banks and in hand    154,738                164,493
                             -------                -------
                             242,855                254,107

Creditors: amounts falling
           due within one
           year              210,650                212,562
                             -------                -------
Net current assets                       32,205                 41,545
                                         ------                -------
Total assets less current              
 liabilities                            275,441                283,483

Creditors: amounts falling
           due after more
           than one year                 38,047                 39,587

Provisions for liabilities                
 and charges                              7,240                  7,595
                                        -------                -------
Net assets                              230,154                236,301
                                        =======                =======

Capital and reserves

Called up share capital                     264                    271

Share premium account                       423                    423

Revaluation reserve                      37,273                 38,280

Profit and loss account                 132,197                135,297

Merger reserve                              242                    242
                                        -------                -------
Equity shareholders' funds              170,399                174,513

Minority shareholders'                   
 interest                                59,755                 61,788
                                        -------                -------
                                        230,154                236,301
                                        =======                =======




Consolidated Cash Flow Statement
for the year ended 31st December 2002

                                                   2002                   2001

                                       #'000      #'000       #'000      #'000

Net cash flow from operating                     
  activities                                     12,810                 22,033

Capital distribution/dividends 
 received from associates                         1,031                    629

Returns on investments and
 servicing of finance

Interest received                        682                    955

Interest paid                         (4,514)                (5,065)

Income from investments                1,297                  1,662

Dividends paid to minority           
 interests                            (1,485)                (1,632)                   
                                       -----                  -----
                                                 (4,020)                (4,080)

Taxation

UK corporation tax paid                 (140)                (1,548)

Overseas tax paid                     (2,596)                (3,368)
                                       -----                  -----
                                                 (2,736)                (4,916)

Capital expenditure and
 financial investment

Purchase of tangible fixed           
 assets                              (10,428)               (10,869)

Sale of tangible fixed assets          1,429                    936

Purchase of investments               (2,226)                (4,338)

Sale of investments                      590                  1,751
                                      ------                 ------
                                                (10,635)               (12,520)

Acquisitions and disposals

Acquisition of business                    -                   (557)

Disposal of businesses                 4,030                  2,846

Purchase of additional                   
 Siegfried AG shares                       -                 (1,439)

Purchase of minority                   
 interests                              (331)                  (542)
                                       -----                  -----
                                                  3,699                    308

Equity dividends paid                            (2,287)                (2,267)
                                                  -----                  -----
Cash outflow before financing                    (2,138)                  (813)

Financing

Loan repayments                       (5,917)                (7,614)

New loans                              5,242                  9,862

Capital element of finance              
 lease rental payments                  (347)                  (279)

Purchase of own shares                (2,079)                (1,693)
                                       -----                  -----
                                                 (3,101)                   276
                                                  -----                  -----
Decrease in cash in the                          
 period                                          (5,239)                  (537)
                                                  =====                  =====




Statement of Total Recognised Gains and Losses
for the year ended 31st December 2002
                                                       2002       2001

                                                      #'000      #'000

                                                              Restated

Profit for the year - includes associates #8,386,000  
 (2001 - #4,476,000)                                  7,149     10,227

Release of goodwill on disposal of subsidiary            
 undertaking                                              -        515

Release of goodwill on part disposal of subsidiary
 undertaking                                              -       (704)

Impairment on previously revalued tangible assets         -       (384)

Share of associate's fixed asset revaluation              -        539

Currency translation differences on foreign currency
 net investments
 - includes associate's profit #525,000 (2001 -        
   #505,000)                                         (6,914)    (3,008)
                                                      -----      -----
Total recognised gains and losses for the year          235      7,185
                                                                 =====
Prior year adjustment                                (4,515)
                                                      -----
Total gains and losses recognised since last annual  
 report                                              (4,280)
                                                      =====




Reconciliation of Movement in Shareholders'Funds
for the year ended 31st December 2002
                                                     2002         2001

                                                    #'000        #'000

                                                              Restated

Profit for the year                                 7,149       10,227

Dividends                                          (2,270)      (2,303)
                                                   ------       ------

Retained profit for the year                        4,879        7,924

Currency translation differences on foreign        
 currency net investments                          (6,914)      (3,008)                           

Purchase of own shares                             (2,079)      (1,860)

Release of goodwill on disposal of subsidiary
 undertaking                                            -          515

Release of goodwill on part disposal of                
subsidiary undertaking                                  -         (704)

Impairment on previously revalued tangible             
 assets                                                 -         (384)

Share of associate's fixed asset revaluation            -          539
                                                    -----        -----
Net addition in shareholders' funds                (4,114)       3,022

Opening shareholders' funds as previously      
 reported                                         174,513      177,091                                          

Prior year adjustment                                           (5,600)

Opening shareholders' funds restated                           171,491
                                                  -------      -------
Closing shareholders' funds                       170,399      174,513
                                                  =======      =======





Analysis of turnover, profit and net operating assets

                                                                          Net operating
                                   Turnover          Operating profit        assets

                                2002       2001        2002     2001      2002        2001

                               #'000      #'000       #'000    #'000     #'000       #'000

By activity
Parent and subsidiary undertakings

Agriculture and              
 horticulture                111,327    108,955       8,842    9,557   135,773     141,826

Trading and agency             6,894     29,684         498      821     2,946       3,971

Food storage and  
 distribution                 42,791     45,215         576    3,076    30,117      30,398

Engineering                   13,122     14,478         421    1,287    12,927      12,521

Fine art trading and
 philately                       291      2,812          94      411     1,793       2,288

Property leasing               2,068      2,177       1,993    2,088     2,956       4,204

Central management and
 miscellaneous                    30         26      (5,550)  (5,501)    9,656       8,658
                             -------    -------       -----   ------   -------     -------
                             176,523    203,347       6,874   11,739   196,168     203,866
                             =======    =======
Banking                                                 (83)     152    21,310      21,120

Profit on sale of investments to group company
 included in banking results                           (795)       -         -           -


Net interest from group companies                        (7)      13         -           -
                                                      -----   ------   -------     -------
                                                      5,989   11,904   217,478     224,986
                                                                       =======     =======
Associated undertakings

Agriculture and horticulture                            (44)     (34)

Pharmaceutical                                       10,504    4,218

Insurance and leasing                                 1,210    1,165
                                                     ------   ------
Operating profit                                     17,659   17,253
                                                     ======   ======



                              Chairman's Statement

Pre-tax profit for the year ended 31st December 2002 was #15.43 million compared
with #17.56 million in 2001. The profit attributable to shareholders was #7.15
million compared with a restated figure of #10.23 million in 2001 and earnings
declined from 374.48p per share to 269.57p per share.

Siegfried AG again made a substantial contribution to our profits, but
continuing lower tea prices and very weak coffee prices had a detrimental effect
on profits. The situation in India is causing some disquiet and this is
discussed in more detail below.

The concerns expressed last year about another "El Nino" cycle were,
unfortunately, substantiated and this pattern will also affect 2003.

Dividend

The Board is recommending a final dividend of 66p per share which, together with
the interim dividend already paid of 20p per share, brings the total
distribution for the year to 86p per share compared with 85p per share in 2001.

Agriculture and Horticulture

Tea
India

The difficult conditions experienced in 2001 unfortunately continued into 2002.
Factors which are affecting the industry's profitability include sale prices
that are now lower than for many years, lower domestic demand, decreasing
exports and the increasing impact of the production of green leaf from small
growers which is sold to dedicated bought leaf factories. These factories pay
little or no statutory taxes, nor undertake welfare responsibilities and as a
result their end product can be at least 30% cheaper than the organised sector.
The Indian Government has to be prepared to take steps to control these factory
operations or the situation can only deteriorate further. Disruptions occurred
at the year end with the auction system throughout the country as Government
tightened regulations with the reintroduction of a more stringent Tea Marketing
Control Order. The situation is still not fully resolved.

As a result of these factors the Group produced a loss of #418,000 despite a
record crop of 29.62 million kgs, which was an increase of 5% over the previous
year.

On a brighter note, the Instant Tea Factory at Aibheel is working to full
capacity with continuing orders from both overseas and a major multi-national
beverage manufacturer.

The law and order situation throughout the estates has been relatively peaceful,
but precautionary measures remained in place.

Bangladesh

With only average weather conditions, the ten Longbourne Group estates produced
a total of 10.31 million kgs which was 7% behind 2001. However prices, which had
started poorly at the beginning of the season, improved steadily and by the end
of the year were 4% above the previous year. The Group produced a pre-tax profit
of #399,000. The newly acquired Eastland Camellia Limited, which has one estate,
also produced a slightly lower crop than in 2001 but prices were 4% higher. This
estate produces some of the highest priced teas in the country.

The 15,000 square foot extension to the warehouse in Chittagong has been
completed satisfactorily and will allow for the storage of an additional 15,000
packages of tea.

Africa

Tea production by subsidiary undertakings amounted to 35.8 million kgs. Climatic
conditions were generally beneficial in Malawi, but Kenya and South Africa both
suffered from irregular rainfall patterns. "El Nino" started to bite towards the
end of 2002, particularly in South Africa where exceptionally dry conditions
were experienced on the majority of the estates. Sale prices for tea were very
similar to those experienced in 2001, but inevitably the cost of production
increased.

The transition to a new Government in Kenya appears to have gone smoothly and
pronouncements are being made which are consistent with the need to improve the
economic management of the country. In Malawi interest rates for borrowings are
still exorbitantly high, presently 41%, and the Malawi kwacha devalued during
the year. The South African rand strengthened during 2002 to the extent that its
exchange rate against sterling is now higher than the levels witnessed before
the rand's dramatic fall during the latter part of 2001. Interest rates remain
at a relatively high level in South Africa, and these two factors will have an
unfavourable effect on the overall fortunes of our operations.

Nepal

Himalaya Goodricke Private Limited, the Group's associate company in Nepal,
produced a record crop of 306,000 kgs, but will show a small loss of #17,000
compared with a loss of #92,000 in 2001. Further improvements have been made in
the factory and a new large generating set is being installed which will allow
for increased manufacture of bought leaf.

Coffee

Coffee production in Kenya fell, mainly due to the disposal by Kakuzi of its 51%
owned subsidiary, Garton. Nonetheless, prices realised were again lower and
throughout the year we have been selling coffee at below the cost of production.
Considerable efforts have been made to reduce costs, but the short term
prospects are not encouraging. There is simply too much coffee being produced
and until the supply/demand ratio is put into balance, it is difficult to see
how profits can be made by any participants in the production sector of this
business.

The fortunes of our Malawi coffee estates have been affected even more adversely
by the fall in prices and costs have been reduced substantially by taking action
that must inevitably impinge on the long term health of the bushes.

Citrus

Yandilla Park experienced difficult conditions in Australia during the year with
an abundance of small sized fruit which was difficult to pack and market. A
greater than usual proportion of the fruit was destined to go to the juice
market, for which no sale contracts existed, resulting in poor prices being
achieved. The disappointing quality of the fruit was due to adverse climatic
conditions and it is hoped that the 2003 navel harvest will be of a considerably
higher quality, resulting in better marketing opportunities. It is, however,
encouraging to report that the marketing operations of Vitor go from strength to
strength with new opportunities being exploited, particularly in the Pacific Rim
region.

The prospects for the citrus operations in Chile, United States and South Africa
remain encouraging with good progress being made towards maturity. Plans are
being prepared for the extension of our citrus activities in these countries.

Edible Nuts

There was a further increase in the production of macadamia in Malawi and prices
improved over the previous year. The South African macadamia operations also
performed well and the processing facility has now been changed from a wet to
dry operation, hopefully further increasing the quality of the product. In
California the almond orchards have come to the end of their useful life and
have been uprooted; they will almost certainly be replaced by citrus. The
pistachio operations in California enjoyed a very good production season with a
crop considerably in excess of that predicted, even though it was an "on" year
in the alternate bearing cycle.

Other Horticulture

The pineapple joint venture in Kenya with Del Monte was again profitable,
although production was substantially down from the previous year on account of
the harvesting cycle. Prices recovered somewhat in 2002 and the prospects for
2003 are also encouraging due to a potential lack of supply from South East
Asia. In Kenya passion fruit remains disappointing and is gradually being
replaced with further areas of avocado, the existing plantings of which continue
to perform beyond our initial expectations.

Wine grape production in Australia improved over the previous year and prices
were reasonable. The prospect for prices, in particular the red varieties, is
set to decline due to continuing over-production in Australia. In South Africa
the wine grape harvest was satisfactory, but the export market has continued to
be difficult throughout the year with producers offering wine for export at very
low prices and, in some cases, almost certainly below cost of production. We
continue to concentrate our efforts on the premium sector and wine that is not
suitable for this market is sold as bulk rather than bottled. During the year
our Merlot and Shiraz wines were awarded gold medals in the well-respected
"Michelangelo" wine fair. Table grape production in South Africa was
disappointing although prices, mainly due to the weak rand, made up much of the
shortfall.

Rubber, which is planted on eight estates in Bangladesh, had a successful year
and production totalled 600 tonnes, which was in line with budget and a crop of
700 tonnes is anticipated for 2003.

Our operation in Brazil again made a modest profit which would have been
considerably better had it not been for an area-wide infestation of the bean
crop. Assuming reasonable weather conditions and a favourable economic
environment, the prospects for this operation continue to be much improved.

Trading and Agency

The Group's remaining 74.9% interest in British Traders & Shippers was sold in
January 2003, but its results are included for 2002. A profit on the sale of our
shareholding should be realised in 2003.

Food Storage and Distribution

Associated Cold Stores & Transport failed to replace the business of a customer
lost at the end of 2001 with business of a similar value and the extra cost of
providing outside space to accommodate a major customer's requirements impacted
on results. The development and implementation of a new IT system is already
identifying opportunities for cost savings which should help profits to recover.
A further 80% increase in insurance premiums in 2002 also had a significant
effect on profits. 2003 premiums have risen again by a further 36%.

Losses continued at W G White as caviar sales remained depressed and the costs
associated with the new wine distribution business continued to exceed sales
from that activity. Responsibility for international sales of wine from the
Group's vineyards has been transferred to South Africa in the first quarter of
2003, thus reducing ongoing selling costs for W G White. Changes in the pattern
of international air travel and the reduction in tourism to London are holding
back caviar sales.

In the Netherlands, Affish produced a much improved result in 2002. However, due
to a downturn in the Dutch economy, there was a general reduction in eating out
of the home, which adversely affected the results of Wylax, the Group's fish
distribution business which services the Dutch restaurant sector.

Engineering

2002 was the first full year of operations for Abbey Metal Finishing's rebuilt
facility, following the fire which severely damaged its premises in June 2000.
During the year, sales continued to progress whilst profits remained supported
by business interruption insurance income. However, the more constrained civil
aerospace market will make it difficult for the company to recover to the level
of turnover achieved before the fire.

Pressure on margins and the effect on North Sea exploration of the government's
imposition of an additional 10% corporation tax on oil companies had an impact
on the results of AJT Engineering, AKD Engineering and some divisions of British
Metal Treatments. AJT's cold extrusion process again provided a useful addition
to sales in its second year of operation. AKD completed the construction of its
new office building which now enables all staff to be accommodated together. The
company secured its largest ever order, for completion during the first half of
2003. The British Metal Treatments' site at Hove, which had been closed in the
previous December, was sold in July and the profit from this contributed to the
2002 results.

General Utilities reported a small loss in 2002 due to a further downturn in
demand for its profile cutting and precision grinding services. Plans are in
hand to consolidate operations onto a single site during 2003, which will
contribute to an improvement in the profitability of the business.

Property Leasing, Fine Art and Philately

Property leasing enjoyed another good year. As anticipated, fine art trading has
now ceased as the Lumley Cazalet operations were finally liquidated during 2002.
This operation has been very successful for the Group and only comes to a close
due to the retirement of our minority partners, to whom we extend our best
wishes for the future.

Very modest trading within the Group's philately activities continued during the
year.

Banking

The difficulties within the financial services sector resulted in another
disappointing year for Duncan Lawrie Limited. The continuing decline in UK base
rates has an immediate effect on the profitability of the bank, particularly as
our very cautious lending policy dictates that customer deposits should not be
utilised as advances to customers who may wish to borrow. Investment management
activity has also been restricted due to the decline in stock markets and this
also impacts on the management fees earned on portfolio valuations. However,
Duncan Lawrie has conducted an extensive review of its operations and will make
considerable savings on reorganisations that are presently under way, the main
one of which is to move its support staff out of expensive London property into
other property already owned by the Group. A lot of positive changes have been
made over the last 12 months including the continuing up-dating of our computer
systems and other communication systems and we remain confident that a niche
market exists for the services offered by Duncan Lawrie as a private bank and
that we will be able to return to making a reasonable profit when financial
conditions improve generally.

Pharmaceutical

The Siegfried Group increased net turnover by 13.2% to SFr. 399.0 million and
recorded a consolidated profit after tax of SFr. 56.2 million, an increase of
more than 81% over the prior year. This constituted the best result in the 130
year history of the Siegfried Group. Our share of these profits amounts to
#8,148,000. The improvements have come particularly from the "Exclusives"
division, which produces custom manufactured active pharmaceutical ingredients
for multi-national companies and also from the generics side of the business.
The Sidroga division, which markets medicinal and herbal teas, continues to show
improvement in its trading operations.

Other Associated Undertakings and Investments

The United Leasing Company Limited had a good year and generated a profit before
tax of #2.32 million compared with #2.24 million in 2001. The Bangladesh economy
is less buoyant at present and 2003 may be a more difficult year. The United
Insurance Company Limited also had a satisfactory year with a profit of
#329,000. The Surmah Valley Tea Company's three tea estates had a good year with
a crop of 1.90 million kgs and prices considerably ahead of 2001. Duncan
Products Limited had a poor year for sales of both water and packet tea.
However, it is hoped that a new plant recently commissioned in Dhaka for the
production of large commercial jars should improve profitability.

Our investments in Bermuda continue to make a positive contribution and it is
pleasing to report that the Bermuda stock market has not collapsed in the manner
evidenced by most other markets around the globe. Further small purchases have
been made and we are very happy with the prospects of the companies in which we
invest.

Development

The main emphasis on development during the year was to continue to bring
immature plantings towards maturity. The initial results from the avocado
plantings in Kenya and the citrus plantings in California and South Africa are
most encouraging and it is likely that further development will take place in
these areas.

Staff

The plight of the stock market and its effect on the health of pension funds has
been well documented and debated over the last few months. Our own pension
schemes are, unfortunately, not immune from the substantial deterioration in the
performance of equities. The FT all-share index fell 25.6% in 2002, which
compares with a previously assumed actuarial appreciation of 7%. The disclosures
required under FRS 17 show that the pension funds' deficits have increased from
#1,575,000 to #17,496,000 during the year. These deficits do, of course, simply
reflect just one moment in time and it is possible, indeed it is to be hoped
that, a recovery in the stock market will make good these deficits. Of more
immediate importance to us are the triennial actuarial valuations that are being
prepared for our main pension schemes as at 1st January and 5th April 2003. In
this context there is bound to be a significant deterioration since the last
valuations three years ago and company pension contributions as a percentage of
salaries are set to increase. The directors feel strongly that the present
defined benefit schemes should continue, notwithstanding the hopefully temporary
deficit in the schemes. We are fortunate to have a generally stable and long
serving workforce and it seems only right that they should be allowed to enjoy
their well-earned retirement in the knowledge that their post retirement income
will not be subject to the volatility of prevailing stock market conditions and
annuity rates.

2002 was a difficult year in many parts of the Group's operations and on behalf
of the Board I would like to extend my thanks to all employees for dealing with
the problems encountered in a positive manner.


Notes

 1. The directors have decided to recommend a final dividend of 66p per ordinary
    share payable on 2nd July 2003 to shareholders registered at the close of
    business on 6th June 2003.

    The total dividend for the year of 86p per ordinary share compares with 85p
    per ordinary share paid in the previous year.

 2. Earnings per share have been calculated by dividing profit after tax and
    minority interests of #7,149,000 (2001 - #10,227,000) by the weighted
    average number of shares in issue at 31st December 2002 of 2,652,023 (2001 -
    2,731,019).

 3. Taxation on profits on ordinary activities includes overseas taxation of
    #2.28 million (2001 - #3.06 million), UK corporation tax of #1.44 million
    (2001 - #2.21 million) and share of associated undertakings tax of #2.75
    million (2001 - #2.35 million).

 4. The Annual General Meeting is to be held on Thursday, 29th May 2003.


 5. The above figures are an abridged statement from the Group's accounts for
    the year ended 31st December 2002. The audit report on these accounts was
    unqualified.

    The statutory accounts for the year ended 31st December 2001 have been
    delivered to the Registrar of Companies and those for the year ended 31st
    December 2002 will be delivered after the Annual General Meeting.

 6. The Directors Report and Statement of Accounts will be posted to
    shareholders on 28th April 2003 on which date copies can be obtained from
    the company's registrars:-

        Capita IRG Plc,

        The Registry,

        34 Beckenham Road,

        Beckenham

        Kent, BR3 4TU

        or from the company's registered office:-

        Wrotham Place,

        Wrotham,

        Sevenoaks,

        Kent TN15 7AE

        Press enquiries to:-

        Mr. M.C. Perkins

        Telephone No. 01622 746655



  P.E. Hill

  Company Secretary

  24th April 2003














                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
FR EZLFLXZBBBBX