TIDMCAM
RNS Number : 0168L
Camellia PLC
01 September 2023
CAMELLIA PLC
Interim results for the 6 months ended 30 June 2023
H1 2023 Highlights
-- Revenue from continuing operations fell 2% to GBP110.5 million
(2022 H1: GBP112.8 million) reflecting lower revenues in
Agriculture as a result of sterling strengthening against
the majority of our operating currencies and from lower macadamia
prices.
-- Profit before tax of GBP4.9 million (2022 H1: loss GBP16.1
million) reflecting improved trading at our associate, BF&M
and impairment write backs in relation to BF&M following
the agreement to sell our holding
-- Adjusted loss before tax* for continuing operations was significantly
reduced in H1 2023 at GBP12.5 million on that of H1 2022
(loss GBP17.6 million) due to improved trading at our associate,
BF&M
-- Adjusted operating loss before tax* for Agriculture increased
42% to GBP12.8 million in the period
* The result from tea improved in H1 compared to the
prior year. Tea production was up 5% which more than
offset the impact of lower average tea selling prices
experienced in almost all regions in H1 and the full
period impact of significant wage increases.
* Profits from avocado were up GBP2.9 million, being up
more than four fold on prior year
* Losses were recorded for macadamia due to the impact
of the current over supply in the market which has
led to c45% lower prices being experienced and
impacted results by GBP5 million period on period
* Profits from instant tea, branded tea and our arable
farm in Brazil were all significantly lower
* Lower profits from Bardsley England reflecting the
impact of inflation (previously announced) and
contracted prices for the 2022 harvest. Contract now
complete.
-- The Board recommends an interim dividend of 44p per share
for the Group
Strategic developments
-- Continued investment and investigation into the expansion
of our agriculture activities via diversification of crop
and location
-- Sale of non-core associate announced: BF&M for $100m, subject
to regulatory and tax approvals. However, BF&M has implemented
a shareholder rights agreement, the implications of which
continue to be examined in detail by Camellia. Discussions
are ongoing to ascertain BF&M's concerns as regards the sale
of our shares to Argus.
-- Marketing of Linton Park and a number of other properties
is underway
-- Parts of Bardsley England (the West Kent orchards and others)
ceased farming in January 2023 and the closure of the West
Kent packing operation is on track for completion in September
2023
-- Establishing the baseline data for our Scope 3 emissions
to complete the full Group carbon footprint measurement
-- Establishing the baseline data of our water footprint to
assess areas of emerging high risk due to the changes in
climate
Malcolm Perkins, Chairman, stated:
"The first half has been a very challenging period. Generally
higher rates of inflation (particularly in wages) and oversupplied
commodity markets in tea, macadamia and arable crops are
contributing to a difficult operating environment.
Revenues from continuing operations decreased 2% in the period
in large part to the impact of currency movements on the revenues
recorded for our agriculture businesses and due to lower macadamia
prices. Due to the nature of our cropping patterns and sales, we
booked an adjusted loss before tax for the period. The H1 profit
before tax at GBP4.9 million is substantially better than prior
year (2022 H1: Loss GBP16.1 million) in large part due to improved
results from BF&M and GBP18m of impairments written back on our
holding in BF&M which when combined more than offset the wider
losses in our agriculture operations.
Our financial results for the full year remain largely dependent
on Agriculture where the majority of harvesting, and sales, takes
place in the second half of the year. However, taking account of
current trends, revenue is expected to be broadly in line with that
of last year and the group is expected to record a single digit
adjusted loss for the year.
Once again I should like to thank all our staff across the group
for their continuing contributions both to the business and their
local communities in extremely difficult circumstances."
Financial highlights
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2022 2022
2023
Restated Restated
----------- -------------- -------------
GBP'm GBP'm GBP'm
----------- -------------- -------------
Revenue - continuing operations 110.5 112.8 297.2
----------- -------------- -------------
Adjusted (loss)/profit before
tax* (12.5) (17.6) 5.2
----------- -------------- -------------
Significant separately disclosed
items and provision releases 17.4 1.5 (8.3)
----------- -------------- -------------
Profit/(loss) before tax
for the period 4.9 (16.1) (3.1)
----------- -------------- -------------
Profit/(loss) after tax for
the period from continuing
operations 3.4 (19.6) (15.3)
----------- -------------- -------------
Profit for the period from
discontinued operations 0.1 0.6 7.6
----------- -------------- -------------
Profit/(loss) after tax 3.5 (19.0) (7.7)
----------- -------------- -------------
Earnings/(loss) per share
- continuing operations 108.6 (742.2)p (724.1)p
----------- -------------- -------------
Dividend per share for the
period 44p 44p 146p
----------- -------------- -------------
Net cash and cash equivalents
net of borrowings 26.8 37.1 39.8
----------- -------------- -------------
Investment portfolio market
value 37.7 35.5 35.6
----------- -------------- -------------
* Profit/(loss) before tax excluding separately disclosed
significant items, details of which can be found in note 6 to the
Accounts later in this announcement
This announcement contains inside information for the purpose of
Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018.
ENQUIRIES
Camellia Plc 01622 746655
Malcolm Perkins, Chairman
Susan Walker, Chief Financial Officer
Panmure Gordon (UK) Limited 020 7886 2500
Nominated Adviser and Broker
Emma Earl
Rupert Dearden
H/Advisers Maitland
PR
William Clutterbuck 07785 292617
CHAIRMAN'S STATEMENT AND OPERATING REVIEW
TRADING UPDATE
The first half has been a very challenging period for all of our
sta and our communities. Generally higher rates of inflation and
oversupplied commodities markets in tea, macadamia and arable crops
are contributing to a di cult operating environment. It is against
this background that we would once again like to thank all of our
sta for their e orts.
Revenue from continuing operations fell 2% to GBP110.5 million
(2022 H1: GBP112.8 million) primarily due to the impact of currency
movements on revenues in Agriculture and from lower macadamia
pricing. Had we translated our revenue using the same average rates
as H1 2022, our revenue for H1 2023 would have been higher at
GBP114.3 million.
We are reporting a first half profit before tax of GBP4.9
million (2022 H1: loss GBP16.1 million) which is a significant
improvement on that of the corresponding period of 2022 for the
reasons set out below:
-- A return to profitability for our Associates with our
share of their results for H1 2023 being a GBP3.2 million
profit compared to a loss of GBP4.5 million for the same
period of 2022. This was predominantly due to BF&M's performance
(see below).
-- Impairment write backs of GBP18.0 million (2022 H1: GBPnil)
in respect of our holding in BF&M
-- Higher investment income and exchange gains on US dollar
currency holdings
-- Improved results from Engineering reflecting increased
demand for servicing and repair work from the oil industry,
in part due to the demise of a key competitor
-- The benefit of these items was partially o set by increased
losses in Agriculture (see below)
The H1 trading loss in Agriculture after provisions for
restructuring costs of GBP0.7 million was 51% higher than that of
H1 of the prior year at a loss of GBP13.7 million (2022 H1: loss
GBP9.1 million). Our tea volumes in the period were 4% higher and
we also saw significant improvements to our average selling prices
in Bangladesh. However, these were not su cient to o set the impact
of wage inflation across all operations, lower average selling
prices across India and Kenya and a significant reduction in
macadamia kernel prices because of high global inventories and
reduced demand. H1 2023 also includes a higher loss for Bardsley
England, reflecting the impact of inflation and the continued
servicing of a loss-making contract which ended in August, as well
as the expected costs of the restructuring of that business. The
arable operations in Brazil produced slightly lower volumes of soya
and prices in H1 were down on those of H1 last year. The
expectation of lower prices for the balance of the soya crop as
well as the winter crops, currently planted, has led to a lower
result for the operation.
Additional detail on the first half results is set out
below.
Strategy
The Board of Camellia continues to be focussed on implementing
its strategy to invest in the expansion of the Group's agricultural
interests. This is to diversify both the location of its interests
and the crops which it produces - to assist in mitigating against
the impact of adverse weather patterns, political instability, and
commodity price movements. We seek to leverage our core
competencies of developing and managing large scale bearer plant
estates.
The further actions taken over recent months to reduce the scale
of our non-agriculture activities and assets and reduce our
exposure to loss making operations is expected to continue. As
previously stated, the Group may sell certain less liquid,
non-income generating or under-performing assets in order to fund
strategically important acquisitions and investments.
Progress on refocussing investments
BF&M
On 6 June 2023, we agreed the sale of our 37% holding in
BF&M to Bermuda Life Insurance Company Limited, a subsidiary of
Argus Group Holdings Limited for a cash consideration of $100m,
conditional on receipt of a number of regulatory and tax
approvals.
Following the announcement of the proposed disposal, BF&M's
board implemented a shareholder rights agreement, the objective of
which was to act as a 'poison pill' in the event of any new
shareholder seeking to register a more than 15% shareholding
without BF&M's consent. The implications of the shareholder
rights agreement are the subject of detailed investigation by
Camellia. Discussions are taking place in an attempt to understand
the concerns of BF&M with respect of the sale of our shares to
Argus.
Properties
Linton Park and a number of other properties in London and
Bristol are being marketed for sale. The current property market is
generally sluggish.
Collections
A number of items from the manuscript collection are expected to
be sold in the coming months, predominantly at auction.
Strategic investments
The following ongoing investments in the Agriculture division
should be noted:
-- In Tanzania, 98Ha of avocado were planted in the first
half of the year bringing the total to 250Ha, with a further
100Ha anticipated to be planted by the end of the year.
-- In South Africa, 40Ha of avocado to be planted in the last
quarter of the year to replace plants severely damaged
by hail in April 2023.
FIRST HALF OPERATING RESULTS
Agriculture
Full year
H1 2023 H1 2022 2022
Revenue GBP'm GBP'm GBP'm
Tea 76.0 77.3 210.1
Nuts and fruits 16.6 17.7 57.1
Other agriculture 10.3 10.7 15.8
------- ------- ---------
102.9 105.7 283.0
------- ------- ---------
Trading (loss)/profit
Tea (11.2) (12.8) 9.3
Nuts and fruits (2.8) 1.3 (0.1 )
Other agriculture 0.3 2.4 6.3
------- ------- ---------
(13.7) (9.1) 15.5
------- ------- ---------
Note: Please see note 5 of the Accounts for further segmental
information
Tea
Tea estate production Instant tea, branded
& tea &
manufacturing tea rooms
Full Full
H1 H1 year H1 H1 year
2023 2022 2022 2023 2022 2022
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 61. 3 61.5 177.6 14.7 15.8 32.5
Adjusted trading
(loss)/profit* (10.2) (12.6 ) 9.1 (1.0) (0.2 ) 0.2
Trading (loss)/profit (10.2) (12.6 ) 9.1 (1.0) (0.2 ) 0.2
* See note 6 of the Accounts for details of the adjustments made
to trading profit in arriving at adjusted trading (loss)/profit
Tea estate production & manufacturing
Overall tea production in the first half was up 5% at 41.4mkg
(H1 2022: 39.6kg). Pricing has been mixed with weaker average
prices in India, particularly for Orthodox teas. Kenyan prices have
also been lower than last year, but in Bangladesh prices firmed,
relative to last year.
Full year
H1 2023 H1 2022 2022
Volume Volume Volume
mkg mkg mkg
India 8.5 8.2 26.8
Bangladesh 3.4 3.1 11.4
Kenya 6.5 6.0 13.3
Malawi 12.3 12.5 19.0
------- ------- ---------
Total own estates 30.7 29.8 70.5
Bought leaf production 8.7 7.9 17.8
Managed client production 2.0 1.9 4.6
------- ------- ---------
Total made tea produced 41.4 39.6 92.9
------- ------- ---------
India: Despite severe hail in a number of gardens in the Dooars,
production in the first half of the year was ahead of H1 2022 due
to generally improved growing conditions. Sales volumes in H1 2023
are also up.
Prices for CTC teas in both the Dooars and Assam have been lower
than in H1 2022. Prices for Assam orthodox teas, which constitute
most of our production in Assam, are also significantly lower than
in H1 2022 as a result of reduced demand from Iran and an
oversupplied domestic market. As previously announced, wages in
West Bengal increased 7.7% for 2023 further impacting results. It
is still very early in the India tea sales cycle (with 70-75% of
sales typically concluded in the second half of the year) which
makes predicting prices for the remainder of the year di cult.
Bangladesh: Production was up 10% on H1 2022 despite a dry start
to the season. Our average pricing was 25% higher than last year.
As previously announced, the 2023 results are being adversely
impacted by the 41.7% wage increase which was e ective from August
2022. In addition, significant cost inflation of fuel, electricity
and gas is being experienced in Bangladesh this year.
In August 2023 the government established a Wages Board for the
tea industry and announced that the next wage increases would be 5%
e ective from each of August 2024 and August 2025, bringing much
needed stability to the cost base for the future.
Kenya : Despite a dry start, tea production nationally was 1%
higher in the first half than in H1 2022. Our estate production for
the first half was 8% above that of the same period of 2022 with
average prices down approximately 9%. We see a continued risk of
downward price pressure for the remainder of the year due to high
stocks of unsold teas in the market and foreign exchange shortages
a ecting key markets.
Malawi : Estate production was 2% below that of the same period
last year due to the impact of cyclone Freddy in March and the very
dry conditions that followed. Average prices are broadly in line
with last year. Looking forward to the remainder of the year we see
some risk that prices are impacted by the oversupplied market
situation in East Africa. Sales have been delayed due to foreign
currency shortages in certain markets and some logistics challenges
as a legacy of the cyclone. Margins reflect the impact of wage
increases of 13% e ective from 1 August 2022 and a further 5%
increase e ective from January 2023.
Instant tea, branded tea and tea rooms
India : Branded tea sales volumes are lower than those of last
year and, due to the sales mix, average prices are also down with a
corresponding adverse impact on profitability.
UK : Revenue at Jing Tea in H1 2023 is up 22% on the prior year
reflecting new wins and increased orders from existing customers as
the hotels and leisure markets edge closer to pre-pandemic activity
levels. Although margins have been adversely a ected by inflation,
particularly on packaging and logistics costs, overall losses are
lower than those experienced in H1 2022.
Nuts and fruits
Macadamia Avocado Other fruits
Full Full Full
H1 H1 year H1 H1 year H1 H1 year
2023 2022 2022 2023 2022 2022 2023 2022 2022
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 2.1 6.0 14.9 1.9 1.4 19.2 12.6 10.3 23.0
Adjusted trading
profit/(loss)* (2.5) 2.5 2.9 3.7 0.8 2.3 (3.3) (2.0) (5.3)
Trading profit/(loss) (2.5) 2.5 2.9 3.7 0.8 2.3 (4.0) (2.0) (5.3)
* See note 6 of the Accounts for details of the adjustments made
to trading profit in arriving at adjusted trading profit/(loss)
Macadamia
We estimate that our combined macadamia harvest will be
approximately 17% higher than that of 2022 at c1.9mkg. Higher
production volumes are being achieved by all operations.
However, as previously announced, the kernel market is very
subdued and there remains a large inventory of product carried over
from last year which is impacting average prices and profitability
of this crop. With China only recently opened post lockdowns, the
level of demand for kernel has not yet recovered in that market
although demand for Nut in Shell (which we do not produce) has
experienced an early revival. Demand for kernel in the USA and
Japan, although improving, is still down on pre-Covid levels.
Pricing, particularly for smaller and commercial grades, continues
to be c45% below that of last year with no sign of recovery for the
current season.
Avocado
Production of our estate Hass crop in H1 was lower than that
experienced in H1 2022 due to a later start on the back of later
maturing fruit. The season is now reaching its peak and thus far
logistics have generally worked well. The avocado tree has a
natural tendency towards alternate or bi-annual bearing, widely
known as 'on' and 'o ' years and 2023 is an 'o ' year. However we
anticipate, due to improved yields from the increasing maturity of
our planted areas, total production of estate Hass for the full
year should be broadly in line with that of 2022.
Pricing in H1 2023 for the limited sales of estate Hass made in
the period has been above that of the same period in 2022. European
markets have been volatile at time depending on the volumes
arriving from Peru. Given the early stage of the season and the
small volumes sold to date, it is too soon to predict prices with
any certainty for the remainder of the year.
The Pinkerton crop production in H1 was well ahead of last year
with prices for fruit sold very much in line with prior year.
Other fruits
Bardsley England
Sales volumes in H1 2023 were 56% higher than in the
corresponding period of 2022, however selling prices did not
increase in any meaningful way, due to Bardsley England's
contractual commitments. Despite the improved volumes, the impact
of high levels of cost inflation during 2022 and further inflation
in H1 2023 have resulted in a higher loss from this operation in
the period. As previously announced, a restructuring of the
business commenced in January 2023 with the closure of farming
operations in West Kent and the closure of the River Farm packhouse
which is expected to complete by the end of September 2023.
Accordingly, the H1 results include GBP0.7 million for the costs of
this restructuring. The refurbished packhouse in East Kent will
commence operations in September in time for the new season.
The 2023 crops of cherries and plums are reasonable and prices
have been significantly higher than those of last year.
The 2023 apple and pear crops are expected to be significantly
lower in comparison to last year following the closure of farming
operations in West Kent. In addition, Bardsley England does not
expect to purchase any significant volumes of partner grower fruit
from the 2023 harvest. Despite these two factors we expect a
similar sales volume overall for the 2023 full year for Bardsley
due to carried over stock from 2022. It is too soon in the season
to determine how the quality of the 2023 harvest will compare to
that of last year. Negotiations continue on pricing with potential
customers in preparation for the approaching season. Encouraging
levels of enquiries for service provision work are also being
received. There remain a number of areas of ine ciency in the
business where we see opportunities to materially improve
performance. As previously indicated, significant additional
capital will be required to develop the field and packing
operations, and it will take longer than anticipated to achieve the
levels of profitability we would expect from this operation.
Other
The grape production season in the Cape ended with another
record harvest 37% up on last year. All the grapes have been sold
in a private sale arrangement to third-party wineries at similar
prices to last year.
The Blueberry operation in Kenya is testing a number of new
varieties, all of which are owned and supplied by Driscoll's, and
have thus far shown encouraging yield results. The volume of
production this year is anticipated to be relatively small due to
the age profile of these new varieties and will be sold in the
local market.
Other agriculture
The other agricultural crops have had a mixed first half with
the following worth noting:
-- In Brazil the prices achieved for the soya crop in the
period were down 6%, but the harvested crop was up 3%.
There was no maize harvesting in the period (2022 H1: 2,806T).
Prices for soya, wheat, maize and sorghum in H2 2023 are
currently expected to be lower than those of last year
due to high levels of production in South America, USA
and Russia. However, with grain supplies from Ukraine continuing
to be volatile, it remains di cult to predict with any
certainty how prices in the remainder of the year will
develop.
-- Rubber manufactured in H1 was down 70% as tapping was delayed
and pricing is also lower than last year.
Sustainability
Ahead of the 2023 annual report, good progress is being made
across the Group in preparation for the implementation of the
recommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD). As part of this e ort, the Group has embarked
on measuring its Scope 3 emissions. In conjunction with the Scope 1
and 2 emission data which we have been monitoring for some time,
this will put us in a position to consider Science Based Targets
for emission reduction. A water foot-printing exercise is also
underway.
Investments
Engineering
The oil and gas services market in Aberdeen has seen some
improvement with a corresponding increase in the demand for AJT's
Engineering division's services. Revenue in the Site Services
division, which is focused on the renewables sector, was in line
with that of H1 2022 despite a key energy generation customer
postponing maintenance projects in light of the energy crisis.
Overall, losses at AJT Engineering declined in H1 2023 as a result
of the increased activity, improved pricing and tight cost
control.
Associates
Our share of the results from associates amounted to a profit of
GBP3.2 million (H1 2022: loss of GBP4.5 million). This reflects
significantly improved operating results from BF&M which
returned to profitability in Q1 2023 as financial markets
stabilised, having shown a very substantial loss in H1 2022.
Following the agreement for the sale of our holding in BF&M,
conditional on tax and regulatory approvals, it has been
re-categorised to 'assets held for sale' resulting in a release of
a previous impairment of GBP18.0 million. Going forward it will no
longer be equity accounted and any dividends received in H2 prior
to completion of the sale will be recorded as investment income in
Camellia's 2023 full year results.
Investment portfolio
Our investment portfolio, which consists principally of listed
equities, at 30 June 2023 was valued at GBP37.7 million (31
December 2022: GBP35.6 million).
Financial Position
The Group continues to have a strong balance sheet with
substantial liquidity which amounted to GBP26.8 million in cash and
cash equivalents net of borrowings as at 30 June 2023.
Pensions
The UK defined benefit scheme, on an IAS19 basis, has a deficit
of GBP2.1 million (31 December 2022: deficit GBP1.1 million). The
increase in the deficit since year end is due mainly to lower than
projected asset returns. The deficit on the Group's defined benefit
pension and post-employment benefit schemes overall now amounts to
GBP9.4 million at 30 June 2023 (31 December 2022: deficit GBP8.4
million).
DIVID
The Board is pleased to declare an interim dividend of 44p per
share (2022 H1: 44p) payable on 13 October 2023 to shareholders
registered at the close of business on 15 September 2023.
BOARD CHANGES
We were pleased, following a full search process, to confirm the
appointment of Byron Coombs as Chief Executive O cer with e ect
from 25 September 2023. Camellia's Chairman, Malcolm Perkins, who
has also acted as Interim Chief Executive O cer since 1 July 2022,
will continue as Interim Chief Executive until then.
Malcolm Perkins will retire on 30 November 2023 after 51 years'
service and will be succeeded from 1 December 2023 by Simon Turner,
currently a Non-executive Director of the Company and a nominee of
The Camellia Foundation on the Board.
In due course the Board intends to appoint an additional
independent Non-executive Director to increase the number to three,
one of whom will be appointed as Senior Independent Director.
OUTLOOK
As always, our financial results remain largely dependent on
Agriculture where the largest portion of the production and sales
take place in the second half of the year. It is therefore
premature to provide any firm indication of the likely results for
2023.
However, taking account of current trends, revenue is expected
to be broadly in line with that of last year and the Group is
likely to record a singlegit adjusted loss before tax for the full
year.
SUMMARY
Diversifying our interests in agriculture where we have scale
and expertise and disinvesting those businesses where we have fewer
long-term strategic advantages are key priorities and we continue
to take significant steps to accelerate our programme.
The Board continues to believe that the actions that we are
taking now will enhance the long-term value of the Group and
provide additional opportunities for its success.
Malcolm Perkins Graham McLean Susan Walker
Chairman and Interim
CEO Director of Agriculture CFO
31 August 2023
INTERIM MANAGEMENT REPORT
The Chairman's Statement and Operating Review form part of this
report and it includes information about important events that have
occurred during the six months ended 30 June 2023 and their impact
on the financial statements set out herein.
Principal risks and uncertainties
The Report of the Directors in the statutory financial
statements for the year ended 31 December 2022 (available on the
Company's website: www.camellia.plc.uk) highlighted risks and
uncertainties that could have an impact on the Group's businesses.
As these businesses are widely spread both in terms of activity and
location, it is unlikely that any one single factor could have a
material impact on the Group's performance. These risks and
uncertainties continue to be relevant for the remainder of the
year. In addition, the Chairman's Statement and Operating Review
included in this report refers to certain specific risks and
uncertainties that the Group is presently facing.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that these condensed financial statements
have been prepared in accordance with IAS 34 'Interim Financial
Reporting', and that the interim management report herein includes
a fair review of the information required by sections 4.2.7 and
4.2.8 of the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
The Directors of Camellia Plc are listed in the Camellia Plc
statutory financial statements for the year ended 31 December 2022.
There have been no subsequent changes of Directors and a list of
current Directors is maintained on the Group's website at
www.camellia.plc.uk.
By order of the Board
Malcolm Perkins
Chairman
31 August 2023
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2023
Six
Six months months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Notes GBP'm GBP'm GBP'm
Restated Restated
Continuing operations
Revenue 5 110.5 112.8 297.2
Cost of sales (103.3) (103.0 ) (226.7 )
---------- -------- -----------
Gross profit 7.2 9.8 70.5
Other operating income 1.5 2.1 4.4
Distribution costs (4.6) (5.1 ) (23.0 )
Administrative expenses (23.1) (20.4 ) (45.8 )
---------- -------- -----------
Trading (loss)/profit 5 (19.0) (13.6 ) 6.1
Share of associates' results 7 3.2 (4.5 ) (2.5 )
Profit on disposal of assets
classified as held for sale 0.1 1.5 1.8
Impairment of intangible assets,
investment properties and
property, plant and equipment - - (10.1 )
Impairment reversal of investment
in associate 14 18.0 - -
Profit on disposal and fair
value movements on money market
investments 0.2 0.1 0.3
---------- -------- -----------
Operating profit/(loss) 2.5 (16.5 ) (4.4 )
Investment income 1.1 0.3 0.4
---------- -------- -----------
Finance income 1.2 1.1 2.0
Finance costs (1.2) (1.0 ) (2.2 )
Net exchange gain 1.6 0.3 1.5
Employee benefit expense (0.3) (0.3 ) (0.4 )
---------- -------- -----------
Net finance income 8 1.3 0.1 0.9
---------- -------- -----------
Profit/(loss) before tax 4.9 (16.1 ) (3.1 )
------------------------------------ ----- ---------- -------- -----------
Comprising
- adjusted (loss)/profit
before tax 6 (12.5) (17.6 ) 5.2
- profit on disposal of assets
classified as held for sale 6 0.1 1.5 1.8
- impairment of intangible
assets, investment properties
and property, plant and equipment 6 - - (10.1 )
- impairment reversal of
investment in associate 6 18.0 - -
- restructuring costs 6 (0.7) - -
---------- -------- -----------
4.9 (16.1 ) (3.1 )
------------------------------------ ----- ---------- -------- -----------
Taxation 9 (1.5) (3.5 ) (12.2 )
---------- -------- -----------
Profit/(loss) for the period
from continuing operations 3.4 (19.6 ) (15.3)
Profit for the period from
discontinued operations 10 0.1 0.6 7.6
---------- -------- -----------
Profit/(loss) after tax 3.5 (19.0 ) (7.7 )
---------- -------- -----------
Profit/(loss) attributable
to:
Owners of Camellia Plc 3.1 (19.9 ) (12.4 )
Non-controlling interests 0.4 0.9 4.7
---------- -------- -----------
3.5 (19.0 ) (7.7 )
---------- -------- -----------
Earnings/(loss) per share
- basic and diluted
108.6 (742.2) (724.1)
From continuing operations 12 p p p
From continuing and discontinued 112.2 (720.5) (449.0)
operations 12 p p p
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Restated Restated
Profit/(loss) for the period 3.5 (19.0 ) (7.7 )
---------- ---------- -----------
Other comprehensive (expense)/income:
Items that will not be reclassified
subsequently to profit or loss:
Financial assets at fair value through
other comprehensive income:
Fair value adjustment for the financial
assets disposed - - 0.1
Corporation tax arising on financial
asset disposals before utilisation of
losses - - (0.2 )
Unwind of deferred tax on financial
assets - - 0.2
Changes in the fair value of financial
assets 1.8 (4.4 ) (2.6 )
Deferred tax movement in relation to
fair value adjustments (0.5) 1.0 -
Remeasurements of post employment benefit
obligations (0.8) (2.1 ) (12.8 )
Deferred tax movement in relation to
post employment benefit obligations (0.2) 0.6 3.6
Corporation tax movement in relation
to post employment benefit obligations 0.1 - (0.4 )
---------- ---------- -----------
0.4 (4.9 ) (12.1 )
---------- ---------- -----------
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation di erences (25.1) 16.6 9.2
Share of other comprehensive income
of associates - - 0.1
---------- ---------- -----------
(25.1) 16.6 9.3
---------- ---------- -----------
Other comprehensive (expense)/income
for the period, net of tax (24.7) 11.7 (2.8 )
---------- ---------- -----------
Total comprehensive (expense)/income
for the period (21.2) (7.3 ) (10.5 )
---------- ---------- -----------
Total comprehensive (expense)/income
attributable to:
Owners of Camellia Plc (15.6) (10.2 ) (16.1 )
Non-controlling interests (5.6) 2.9 5.4
---------- ---------- -----------
(21.2) (7.3 ) (10.7 )
---------- ---------- -----------
CONDENSED CONSOLIDATED BALANCE SHEET
at 30 June 2023
30 June 30 June 31 December
2023 2022 2022
Notes GBP'm GBP'm GBP'm
Restated Restated
ASSETS
Non-current assets
Intangible assets 6.2 10.1 6.3
Property, plant and equipment 13 170.2 205.6 184.5
Right-of-use assets 23.2 28.5 26.1
Investment properties 24.4 24.4 25.4
Biological assets 12.1 13.5 14.1
Investments in associates 14 10.3 69.8 70.2
Equity investments at fair value
through other
comprehensive income 29.7 24.4 25.7
Money market investments at
fair value through
profit or loss 6.9 8.0 7.3
Debt investments at amortised
cost 1.1 1.4 1.3
Other investments - heritage
assets 8.8 8.8 8.8
Retirement benefit surplus 18 1.4 9.8 0.8
Trade and other receivables 3.1 2.9 3.1
------- -------- -----------
Total non-current assets 297.4 407.2 373.6
------- -------- -----------
Current assets
Inventories 64.4 64.0 60.4
Biological assets 10.6 9.2 10.8
Trade and other receivables 37.9 47.2 67.6
Money market investments at
fair value through profit or
loss - 0.3 1.3
Debt investments at amortised
cost - 1.4 -
Current income tax assets 0.7 4.5 1.1
Cash and cash equivalents (excluding
bank overdrafts) 47.0 49.6 49.3
------- -------- -----------
160.6 176.2 190.5
Assets classified as held for
sale 15 81.1 5.0 4.6
------- -------- -----------
Total current assets 241.7 181.2 195.1
------- -------- -----------
30 June 30 June 31 December
2023 2022 2022
Notes GBP'm GBP'm GBP'm
Restated Restated
LIABILITIES
Current liabilities
Financial liabilities - borrowings 16 (16.4) (8.0 ) (5.1 )
Lease liabilities (2.0) (3.1 ) (2.3 )
Trade and other payables (52.2) (61.7 ) (59.8 )
Current income tax liabilities (2.3) (6.1 ) (4.4)
Employee benefit obligations 18 (0.9) (1.2 ) (1.1 )
Provisions 17 (10.8) (17.9 ) (10.8 )
------- -------- -----------
(84.6) (98.0 ) (83.5 )
Liabilities related to assets
classified as held for sale 15 (2.0) (2.0 ) (2.0 )
------- -------- -----------
Total current liabilities (86.6) (100.0 ) (85.5 )
------- -------- -----------
Net current assets 155.1 81.2 109.6
------- -------- -----------
Total assets less current liabilities 452.5 488.4 483.2
------- -------- -----------
Non-current liabilities
Financial liabilities - borrowings 16 (3.8) (4.5 ) (4.4 )
Lease liabilities (17.2) (20.8 ) (19.1 )
Deferred tax liabilities (32.9) (36.7 ) (37.0 )
Employee benefit obligations 18 (9.9) (6.6 ) (8.1 )
------- -------- -----------
Total non-current liabilities (63.8) (68.6 ) (68.6 )
------- -------- -----------
Net assets 388.7 419.8 414.6
------- -------- -----------
EQUITY
Called up share capital 0.3 0.3 0.3
Share premium 15.3 15.3 15.3
Reserves 331.9 357.0 350.2
------- -------- -----------
Equity attributable to owners
of Camellia Plc 347.5 372.6 365.8
Non-controlling interests 41.2 47.2 48.8
------- -------- -----------
Total equity 388.7 419.8 414.6
------- -------- -----------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Notes GBP'm GBP'm GBP'm
Cash (used in)/generated from
operations
Cash flows from operating activities 19 (13.5) (5.0 ) 2.6
Interest received 2.5 1.1 2.0
Interest paid (1.9) (0.9 ) (2.2 )
Income taxes paid (3.5) (4.5 ) (8.3 )
---------- ---------- -----------
Net cash flow from operating
activities (16.4) (9.3 ) (5.9 )
---------- ---------- -----------
Cash flows from investing activities
Purchase of property, plant
and equipment (7.1) (6.7 ) (14.4 )
Proceeds from sale of non-current
assets 0.4 0.2 0.9
Proceeds from sale of assets
held for sale 0.8 3.6 4.5
Purchase of heritage assets - - (0.1 )
Additions to investment property - (1.3 ) (2.5 )
Biological assets: non-current
- disposals 0.1 0.2 0.8
Proceeds from the disposal of
a subsidiary 10 16.1 - -
Cash leaving the Group on disposal
of a subsidiary - - (1.6 )
Payment for acquisition of businesses
net of cash acquired - (0.8 ) -
Dividends received from associates 0.9 1.9 3.2
Purchase of investments (4.5) (0.4 ) (2.9 )
Proceeds from sale of investments 0.5 1.5 8.5
Income from investments 0.4 0.3 0.4
---------- ---------- -----------
Net cash flow from investing
activities 7.6 (1.5 ) (3.2 )
---------- ---------- -----------
Cash flows from financing activities
Equity dividends paid - (2.8 ) (4.0 )
Dividends paid to non-controlling
interests (2.0) (4.4 ) (5.3 )
New loans 3.1 0.4 1.4
Loans repaid - (1.2 ) (1.6 )
Payments of lease liabilities (1.2) (1.8 ) (2.6 )
---------- ---------- -----------
Net cash flow from financing
activities (0.1) (9.8 ) (12.1 )
---------- ---------- -----------
Net decrease in cash and cash
equivalents
from continuing operations (8.9) (20.6 ) (21.2 )
Net cash inflow from discontinued
operation - 0.3 3.8
Cash and cash equivalents at
beginning of period 45.6 59.9 59.9
Exchange (losses)/gains on cash (1.7) 2.9 3.1
---------- ---------- -----------
Cash and cash equivalents at
end of period 20 35.0 42.5 45.6
---------- ---------- -----------
For the purposes of the cash flow statement, cash and cash
equivalents are included net of overdrafts repayable on demand.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2023
Attributable to the owners of Camellia
Plc
Non-
Share Share Treasury Retained Other controlling Total
capital premium shares earnings reserves Total interests equity
Notes GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
At 1 January
2022 0.3 15.3 (0.4) 377.1 (3.7) 388.6 48.7 437.3
Adoption of IFRS
17 by associate 2 - - - (3.3) - (3.3) - (3.3)
------- ------- -------- -------- -------- ----- ----------- ------
At 1 January
2022 -
(restated) 0.3 15.3 (0.4) 373.8 (3.7) 385.3 48.7 434.0
Loss for the
period
(restated) - - - (19.9) - (19.9) 0.9 (19.0)
Other
comprehensive
(expense)/income
for the period
(restated) - - - (1.0) 10.7 9.7 2.0 11.7
Transfer of
realised
gains on
disposal
of financial
assets - - - 0.2 (0.2) - - -
Dividends 11 - - - (2.8) - (2.8) (4.4) (7.2)
Share of
associate's
other equity
movements - - - 0.3 - 0.3 - 0.3
------- ------- -------- -------- -------- ----- ----------- ------
At 30 June 2022 0.3 15.3 (0.4) 350.6 6.8 372.6 47.2 419.8
------- ------- -------- -------- -------- ----- ----------- ------
At 1 January
2022 0.3 15.3 (0.4) 377.1 (3.7) 388.6 48.7 437.3
Adoption of IFRS
17 by associate 2 - - - (3.3) - (3.3) - (3.3)
------- ------- -------- -------- -------- ----- ----------- ------
At 1 January
2022 -restated 0.3 15.3 (0.4) 373.8 (3.7) 385.3 48.7 434.0
Loss for the
period
(restated) - - - (12.4) - (12.4) 4.7 (7.7)
Other
comprehensive
(expense)/income
for the period
(restated) - - - (10.4) 6.9 (3.5) 0.7 (2.8)
Transfer of
realised
gains on
disposal
of financial
assets - - - 1.1 (1.1) - - -
Dividends 11 - - - (4.0) - (4.0) (5.3) (9.3)
Share of
associate's
other equity
movements - - - 0.4 - 0.4 - 0.4
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2022 0.3 15.3 (0.4) 348.5 2.1 365.8 48.8 414.6
Profit for the
period - - - 3.1 - 3.1 0.4 3.5
Other
comprehensive
(expense)/income
for the period - - - (1.3) (17.4) (18.7) (6.0) (24.7)
Dividends 11 - - - (2.8) - (2.8) (2.0) (4.8)
Share of
associate's
other equity
movements - - - 0.1 - 0.1 - 0.1
------- ------- -------- -------- -------- ----- ----------- ------
At 30 June 2023 0.3 15.3 (0.4) 347.6 (15.3) 347.5 41.2 388.7
------- ------- -------- -------- -------- ----- ----------- ------
NOTES TO THE ACCOUNTS
1 Basis of preparation
These financial statements are the interim condensed
consolidated financial statements of Camellia Plc, a company
registered in England, and its subsidiaries (the "Group") for the
six month period ended 30 June 2023 (the "Interim Report"). The
interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report
should be read in conjunction with the Report and Accounts (the
"Annual Report") for the year ended 31 December 2022.
The financial information contained in this interim report has
not been audited and does not constitute statutory accounts within
the meaning of Section 435 of the Companies Act 2006. A copy of the
statutory accounts for the year ended 31 December 2022 has been
delivered to the Registrar of Companies. The auditors' opinion on
these accounts was unqualified and does not contain an emphasis of
matter paragraph or a statement made under Section 498(2) and
Section 498(3) of the Companies Act 2006.
The interim condensed financial statements have been prepared in
accordance with United Kingdom adopted International Financial
Reporting Standards ("IFRS") including IAS 34 "Interim Financial
Reporting". For these purposes, IFRS comprise the Standards issued
by the International Accounting Standards Board ("IASB") and
Interpretations issued by the International Financial Reporting
Standards Interpretations Committee ("IFRS IC").
These interim condensed consolidated financial statements were
approved by the Board of Directors on 31 August 2023. At the time
of approving these financial statements, the Directors have a
reasonable expectation that the Company and the Group have adequate
resources to continue to operate for the foreseeable future. They
therefore continue to adopt the going concern basis of accounting
in preparing the financial statements.
2 Changes to accounting policies
These interim condensed financial statements have been prepared
on the basis of accounting policies consistent with those applied
in the financial statements for the year ended 31 December 2022.
The Group's previously recognised associate company, BF&M
Limited has adopted IFRS 17 from 1 January 2023, in accordance with
this standard, they have restated their opening balance sheet as at
1 January 2022 and their results for 2022. In accordance with our
accounting policy to use the equity method accounting for our
associate undertakings, the impact of this restatement, has been to
decrease the carrying value of our investment in associates at 1
January 2022 by GBP3.3 million, with a corresponding reduction in
the Group's reserves. The share of our associates results for the
half year ended 30 June 2022 and for the full year ended 31
December 2022 has increased by GBP0.1 million and GBP0.6 million
respectively.
3 Going concern
The Directors considered the impact of the strategy and current
trading environment as set out in the Chairman's Statement and
operating review on the business for the next 15 months. We have
considered several variables which may impact on revenue, profits
and cash flows. In light of the nature of our business, we expect
our agriculture businesses will continue to operate broadly as
currently. We have assumed that the leisure and food services
markets continue to recover gradually over the course of the next
year.
At 30 June 2023, the Group had cash and cash equivalents of
GBP35.0 million with loans outstanding of GBP8.2 million. In
addition, the Group had undrawn short-term loans and overdraft
facilities of GBP12.3 million and a portfolio of liquid investments
with a fair market value of GBP37.7 million.
The Directors have modelled various severe but plausible
scenarios using assumptions including the combined e ect of reduced
sales volumes for tea and reduced sales volumes for macadamia. The
revenue and operational impact of such volume reductions across our
operations would have a substantially negative impact on Group
profitability. We have also considered the risk of price reductions
for our tea, macadamia, avocado and apple crops.
The Directors believe that the Company and the Group are well
placed to manage their financing and other business risks
satisfactorily and have a reasonable expectation that the Company
and the Group will have adequate resources to continue in
operational existence for the foreseeable future. The Directors
therefore continue to adopt the going concern basis in preparing
the financial statements.
4 Cyclical and seasonal factors
Due to climatic conditions the Group's tea operations in India
and Bangladesh produce most of their crop during the second half of
the year. Tea production in Kenya remains at consistent levels
throughout the year but in Malawi the majority of tea is produced
in the first six months.
Soya in Brazil is generally harvested in the first half of the
year. The majority of the macadamia crop in Malawi and South Africa
is harvested in the second half of the year but in Kenya the
majority of macadamia is harvested in the first half. Apples in the
United Kingdom and Avocados in Kenya are mostly harvested in the
second half of the year.
There are no other cyclical or seasonal factors which have a
material impact on the trading results.
5 Segment reporting
Agriculture Engineering Unallocated Consolidated
Six months Six months Six months Six months
ended ended ended ended
30 June 30 June 30 June 30 June
2023 2022 2023 2022 2023 2022 2023 2022
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Restated Restated
Continuing operations
Revenue
External sales 102.9 105.7 7.1 6.6 0.5 0.5 110.5 112.8
------- ------ ------ ------- ------ -------- ------ --------
Adjusted trading loss (13.0) (9.1) (0.1) (0.5) (5.2) (4.0) (18.3) (13.6)
Separately disclosed items (0.7) - - - - - (0.7) -
------- ------ ------ ------- ------ -------- ------ --------
Trading loss (13.7) (9.1) (0.1) (0.5) (5.2) (4.0) (19.0) (13.6)
Share of associates' results - - - - 3.2 (4.5) 3.2 (4.5)
Profit on disposal of assets classified as held for sale - - - - 0.1 1.5 0.1 1.5
Impairment reversal of investment in associate - - - - 18.0 - 18.0 -
Profit on disposal and fair value movements on money
market investments 0.2 0.1 - - - - 0.2 0.1
------- ------ ------ ------- ------ -------- ------ --------
Operating profit/(loss) (13.5) (9.0) (0.1) (0.5) 16.1 (7.0) 2.5 (16.5)
------- ------ ------ ------- ------ -------- ------ --------
Comprising
* adjusted operating loss before tax (12.8) (9.0) (0.1) (0.5) (2.0 ) (8.5) (14.9 ) (18.0)
* restructuring costs (0.7) - - - - - (0.7 ) -
* profit on disposal of assets classified as held for
sale - - - - 0.1 1.5 0.1 1.5
* impairment reversal of investment in associate - - - - 18.0 - 18.0 -
(13.5) (9.0) (0.1) (0.5) 16.1 (7.0) 2.5 (16.5)
Investment income 1.1 0.3
Net finance income 1.3 0.1
------ --------
Profit/(loss) before tax 4.9 (16.1)
Taxation (1.5 ) (3.5)
------ --------
Profit/(loss) for the period from continuing operations 3.4 (19.6)
Profit for the period from discontinued operations 0.1 0.6
------ --------
Profit/(loss) after tax 3.5 (19.0)
------ --------
Agriculture Engineering Unallocated Consolidated
GBP'm GBP'm GBP'm GBP'm
Restated Restated
Continuing operations
Revenue
External sales 283.0 13.2 1.0 297.2
----------- ----------- ----------- ------------
Adjusted trading profit/(loss) 15.5 (0.8) (8.6) 6.1
Separately disclosed items - - - -
----------- ----------- ----------- ------------
Trading profit/(loss) 15.5 (0.8) (8.6) 6.1
Share of associates' results - - (2.5) (2.5)
Profit on disposal of assets classified as held for sale - - 1.8 1.8
Impairment of intangible assets, investment properties and
property, plant and equipment (10.0) - (0.1) (10.1)
Profit on disposal of financial assets 0.3 - - 0.3
----------- ----------- ----------- ------------
Operating profit/(loss) 5.8 (0.8) (9.4) (4.4)
----------- ----------- ----------- ------------
Comprising
* adjusted operating profit/(loss) before tax 15.8 (0.8) (11.1) 3.9
* profit on disposal of assets classified as held for
sale - 1.8 1.8
* impairment of intangible assets, investment
properties and property, plant and equipment (10.0) - (0.1) (10.1)
----------- ----------- ----------- ------------
5.8 (0.8) (9.4) (4.4)
Investment income 0.4
Net finance income 0.9
------------
Loss before tax (3.1)
Taxation (12.2)
------------
Loss for the period from continuing operations (15.3)
Profit for the period from discontinued operations 7.6
------------
Loss after tax (7.7)
------------
6 Adjusted loss
The Group seeks to present an indication of the underlying
performance which is not impacted by exceptional items or items
considered non-operational in nature. This measure of profit is
described as 'adjusted' and is used by management to measure and
monitor performance.
Six months Six months
ended ended
30 June 30 June
2023 2022
GBP'm GBP'm
Operating profit/(loss) 2.5 (16.5)
Exceptions or items considered non-operational:
Profit on disposal of assets classified as held for sale 0.1 1.5
Restructuring costs (0.7) -
Impairment reversal of investment in associate 18.0 -
---------- ----------
Underlying operating loss before tax (14.9) (18.0)
Investment income 1.1 0.3
Net finance income 1.3 0.1
---------- ----------
Adjusted loss before tax (12.5) (17.6)
---------- ----------
The following items have been excluded in arriving at the
adjusted measure and have been separately disclosed:
-- A profit on disposal of assets classified as held for
sale of GBP0.1 million (2022: six months GBP1.5 million
- year GBP1.8 million)
-- Restructuring costs at Bardsley England of GBP0.7 million
(2022: six months GBPnil - year GBPnil)
-- Impairment reversal of the Group's investment in BF&M
Limited (note 14) of GBP18.0 million (2022: six months
GBPnil - year GBPnil)
7 Share of associates' results
The Group's share of the results of associates is analysed
below:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Restated Restated
Profit/(loss) before tax 3.4 (4.2) (2.1)
Taxation (0.2) (0.3) (0.4)
---------- ---------- -----------
Profit/(loss) after tax 3.2 (4.5) (2.5)
---------- ---------- -----------
8 Finance income and costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Finance costs - interest payable on loans and bank overdrafts (0.8) (0.6) (1.3)
Interest payable on leases (0.3) (0.4) (0.8)
Other interest payable (0.1) - (0.1)
---------- ---------- -----------
Finance costs (1.2) (1.0) (2.2)
Finance income - interest income on short-term bank deposits 1.2 1.1 2.0
Net exchange gain on foreign currency balances 1.6 0.3 1.5
Employee benefit expense (0.3) (0.3) (0.4)
---------- ---------- -----------
Net finance income 1.3 0.1 0.9
---------- ---------- -----------
9 Taxation on profit/(loss) on ordinary activities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Current tax
UK corporation tax
UK corporation tax - - -
Double tax relief - - -
Use of losses to shelter capital gain on disposal of financial assets - - (0.2)
Adjustment in respect of prior years - - -
---------- ---------- -----------
- - (0.2)
Foreign tax
Corporation tax 2.5 3.9 9.1
Adjustment in respect of prior years - - -
---------- ---------- -----------
2.5 3.9 9.1
---------- ---------- -----------
Total current tax 2.5 3.9 8.9
Deferred tax
Origination and reversal of timing di erences
United Kingdom (0.2) 1.8 3.7
Overseas deferred tax (0.8) (2.2) (0.4)
---------- ---------- -----------
Tax on profit/(loss) on ordinary activities 1.5 3.5 12.2
---------- ---------- -----------
Tax on profit/(loss) on ordinary activities for the six months
to 30 June 2023 has been calculated on the basis of the estimated
annual e ective rate for the year ending 31 December 2023.
10 Discontinued operations
On 16 December 2022, the Group entered into an unconditional
agreement to sell Associated Cold Stores & Transport Limited,
which was the Group's Food Service operation. The disposal, which
completed on 10 January 2023, was e ected in order to support the
Group's strategy of focussing its investment activity on its core
agriculture operations and for general working capital purposes.
The e ective date of the transaction was 26 November 2022.
The prior year figures in the consolidated income statement and
the consolidated cashflow statement have been restated in
accordance with IFRS 5 to report the discontinued operations
separately from continuing operations.
The results o f the discontinued operations, which have been
included in the profit for the period, were as follows:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Revenue - 13.0 23.7
Cost of sales - (10.2) (18.4)
---------- ---------- -----------
Gross profit - 2.8 5.3
Administrative expenses - (2.2) (4.0)
Profit on disposal of property, plant and equipment - - 0.5
Net finance costs - - (0.1)
---------- ---------- -----------
Profit before tax - 0.6 1.7
Profit on disposal of discontinued operations 0.1 - 3.8
Attributable tax credit - - 2.1
---------- ---------- -----------
Net profit attributable to discontinued operations (attributable to
owners of the Company
) 0.1 0.6 7.6
---------- ---------- -----------
During the period, Associated Cold Stores & Transport
Limited contributed GBPnil (2022: six months GBP0.7 million - year
GBP4.0 million ) to the Group's net operating cash flows, paid
GBPnil (2022: six months GBP0.2 million - year GBP0.3 million) in
respect of investing activities and paid GBPnil million (2022: six
months GBP0.2 million - year GBP0.4 million) in respect of
financing activities.
The profit in 2022 of GBP3.8 million arose on the disposal of
Associated Cold Stores & Transport Limited, being the di erence
between the proceeds of disposal and the carrying amount of the
subsidiary's net assets at the e ective date of disposal. Following
the finalisation of the completion accounts, an additional GBP0.1
million profit on disposal has been recognised in 2023.
11 Equity dividends
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2022 of 102p (2021: 102p) per
share 2.8 2.8 2.8
---------- ----------
Interim dividend for the year ended 31 December 2022 of 44p (2021: 44p) per
share 1.2
-----------
4.0
-----------
Dividends amounting to GBP0.1 million (2022: six months GBP0.1
million - year GBP0.1 million) have not been included as group
companies hold 62,500 issued shares in the company. These are
classified as treasury shares.
Proposed interim dividend for the year ended
31 December 2023 of 44p (2022: 44p) per share 1.2 1.2
--- ---
The proposed interim dividend was approved by the board of
Directors on 31 August 2023 and has not been included as a
liability in these financial statements.
12 Earnings/(loss) per share (EPS)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Loss EPS Loss EPS Loss EPS
GBP'm Pence GBP'm Pence GBP'm Pence
Restated Restated Restated Restated
Attributable to ordinary shareholders -
continuing operations 3.0 108.6 (20.5) (742.2) (20.0) (724.1)
------- ------- -------- -------- -------- --------
Attributable to ordinary shareholders -
continuing and discontinued operations 3.1 112.2 (19.9) (720.5) (12.4) (449.0)
------- ------- -------- -------- -------- --------
Basic and diluted earnings per share are calculated by dividing
the earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue of 2,762,000 (2022: six
months 2,762,000 - year 2,762,000), which excludes 62,500 (2022:
six months 62,500 - year 62,500) shares held by the Group as
treasury shares.
13 Property, plant and equipment
During the six months ended 30 June 2023 the Group acquired
assets with a cost of GBP6.4 million (2022: six months GBP7.0
million - year GBP14.8 million). Assets with a carrying amount of
GBP0.2 million were disposed of during the six months ended 30 June
2023 (2022: six months GBP0.3 million - year GBP1.1 million).
Assets with a carrying amount of GBP nil million were classified as
held for sale as at 30 June 2023 (2022: six months GBP0.5 million -
year GBP0.7 million ) and assets with a net carrying value of
GBP1.0 million were reclassified from and to investment
properties.
14 Investments in associates
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Restated Restated
At 1 January 99.8 98.9 98.9
Adoption of IFRS 17 (note 2) - (3.3 ) (3.3 )
------- -------- -----------
At 1 January restated 99.8 95.6 95.6
Exchange di erences (3.9) 9.6 9.4
Share of profit/(loss) (note 7) 3.2 (4.5 ) (2.5 )
Dividends (1.0) (1.9 ) (3.2 )
Other equity movements 0.1 0.3 0.5
Reclassification to held for sale (87.9) - -
------- -------- -----------
At end of period 10.3 99.1 99.8
------- -------- -----------
Provision for diminution in value
At 1 January 29.6 26.3 26.3
Exchange di erences (0.9) 3.0 3.3
Reversal of impairment (18.0) - -
Reclassification to held for sale (10.7) - -
------- -------- -----------
At end of period - 29.3 29.6
------- -------- -----------
Net book value at end of period 10.3 69.8 70.2
------- -------- -----------
On 6 June 2023, the Group entered into an agreement to sell it's
entire holding in BF&M Limited, to Bermuda Life Insurance
Company Limited, subject to regulatory and tax approvals. Net
proceeds are estimated to be approximately US$95.8 million and the
transaction is expected in be completed in Q4 2023. As a result of
this, GBP18.0 million of impairments previously provided for have
been reversed and credited to the income statement. This investment
has now been reclassified as held for sale and is no longer equity
accounted.
15 Assets classified as held for sale/Liabilities related to
assets classified as held for sale
During the period the following assets were transferred to held
for sale:
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
At 1 January 4.6 6.6 6.6
Reclassified from property, plant
and equipment - 0.5 0.7
Reclassified from investments in
associates (note 14) 77.2 - -
------- ------- -----------
81.8 7.1 7.3
Disposals during period (0.7) (2.1 ) (2.7 )
------- ------- -----------
At end of period 81.1 5.0 4.6
------- ------- -----------
Liabilities related to assets classified
as held for sale at end of the period:
Reclassified from lease liabilities 2.0 2.0 2.0
------- ------- -----------
During the period, properties owned by Bardsley England and a
small number of the Group's heritage assets and other items of art
have been sold, realising cash proceeds of GBP0.7 million.
16 Borrowings
Borrowings (current and non-current) include loans of GBP8.2
million (loans 2022: six months GBP5.4 million - year GBP5.8
million) and bank overdrafts of GBP12.0 million (2022: six months
GBP7.1 million - year GBP3.7 million). The following loan movements
occurred during the six months ended 30 June 2023:
GBP'm
Balance at 1 January 2023 5.8
Exchange di erences (0.7)
New loans 3.1
-----
Balance at 30 June 2023 8.2
-----
17 Provisions
Wages and Legal
salaries claims Others Total
GBP'm GBP'm GBP'm GBP'm
At 1 January 2022 9.1 1.2 1.5 11.8
Exchange di erences 0.4 - - 0.4
Utilised in the period (0.8) (0.1) (0.1) (1.0)
Provided in the period 8.3 - - 8.3
Unused amounts reversed in period (1.6) - - (1.6)
--------- ------ ------ -----
At 30 June 2022 15.4 1.1 1.4 17.9
--------- ------ ------ -----
At 1 January 2022 9.1 1.2 1.5 11.8
Utilised in the period (6.7) (0.3) (0.1) (7.1)
Provided in the period 8.5 - - 8.5
Subsidiary leaving the group - - (0.5) (0.5)
Unused amounts reversed in period (1.8) - (0.1) (1.9)
--------- ------ ------ -----
At 31 December 2022 9.1 0.9 0.8 10.8
Exchange di erences (0.5) (0.1) - (0.6)
Utilised in the period (1.7) (0.2) (0.1) (2.0)
Provided in the period 3.1 - - 3.1
Unused amounts reversed in period (0.5) - - (0.5)
--------- ------ ------ -----
At 30 June 2023 9.5 0.6 0.7 10.8
--------- ------ ------ -----
Current:
At 30 June 2023 9.5 0.6 0.7 10.8
--------- ------ ------ -----
At 31 December 2022 9.1 0.9 0.8 10.8
--------- ------ ------ -----
At 30 June 2022 15.4 1.1 1.4 17.9
--------- ------ ------ -----
The wages and salaries provisions are in respect of ongoing wage
and bonus negotiations in India, Kenya and Bangladesh.
Legal claims relate to the cost of the defence of the litigation
concerning our East African operations, including settlements and
the expected cost of progressive measures.
Others relate to provisions for claims and dilapidations.
18 Employee benefit obligations
The UK defined benefit pension scheme and the overseas pension,
gratuity and medical benefit schemes operated in Group subsidiaries
located in Bangladesh and India for the purpose of IAS 19 have been
updated to 30 June 2023 from the valuations as at 31 December 2022
by the actuaries and the movements have been reflected in this
interim statement.
An actuarial loss of GBP0.8 million was realised in the period
in relation to the Group's employee obligations of which GBP1.0
million related to the UK defined benefit pension scheme. In
relation to the UK defined benefit pension scheme a loss of GBP6.4
million was realised in relation to the scheme assets and a gain of
GBP5.4 million was realised in relation to changes in the
underlying actuarial assumptions. The assumed discount rate has
increased to 5.25% (31 December 2022: 4.80%), the assumed rate of
inflation (CPI) has increased to 2.40% (31 December 2022: 2.35%).
There has been no change in the mortality assumptions used.
19 Reconciliation of profit/(loss) to cash flow
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Restated Restated
Profit/(loss) from operations 2.5 (16.5 ) (4.4 )
Share of associates' results (3.2) 4.5 2.5
Depreciation and amortisation 5.7 5.8 12.2
Depreciation of right-of-use assets 0.9 1.4 2.2
(Impairment reversal)/impairment of
assets (18.0) - 10.1
Realised movements on biological assets
- non-current (0.1) - (1.5 )
Money market investments at fair value
through profit or loss - gain (0.2) (0.1 ) (0.3 )
Profit on disposal of non-current
assets (0.1) - (0.1 )
Profit on disposal of assets classified
as held for sale (0.1) (1.5 ) (1.8 )
Profit on disposal of financial assets - (0.1 ) (0.3 )
Movements in provisions 0.6 5.7 (0.7 )
Increase in inventories (9.8) (11.5 ) (9.8 )
Increase in biological assets (0.5) (0.4 ) (2.3 )
Decrease/(increase) in trade and other
receivables 8.0 5.0 (6.5 )
Increase in trade and other payables 0.8 2.5 3.3
Di erence between employee benefit
obligations funding contributions
and cost charged - 0.2 -
---------- ---------- -----------
Cash (used in)/generated from operations (13.5) (5.0 ) 2.6
---------- ---------- -----------
20 Cash and cash equivalents
For the purposes of the cash flow statement cash and cash
equivalents comprise:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'm GBP'm GBP'm
Cash and cash equivalents 47.0 49.6 49.3
Overdrafts repayable on demand (included in current liabilities -
borrowings) (12.0) (7.1) (3.7)
---------- ---------- -----------
35.0 42.5 45.6
---------- ---------- -----------
21 Contingent liabilities
In Malawi the Revenue Authority (MRA) indicated in 2021 that it
intended to collect VAT on sales made at auction and under private
treaty for export, in the period since 2017. Tea sales intended for
the export market were subject to an industry wide agreement with
the MRA and the Reserve Bank of Malawi reached at the time the
auction was established, resulting in these deemed exports being
zero rated for VAT. The MRA raised an assessment for VAT against
Eastern Produce Malawi in connection with this which has been
appealed in light of the historic agreement and long- established
custom and practice of the industry. Following discussions between
the Malawi government, the MRA and the tea industry, the MRA has
given permission for the auction to continue with teas deemed as
export zero rated for VAT and the assessment raised against Eastern
Produce Malawi has been suspended. Eastern Produce Malawi's
estimated contingent liability for VAT on these deemed export
sales, excluding any penalties and interest, is approximately
GBP4.4 million.
In India, assessments have been received for excise duties of
GBP0.2 million, sales and entry tax of GBP0.9 million and of GBP0.8
million for income tax matters. These are being contested on the
basis that they are without technical merit.
In India, a long running dispute between our local subsidiaries
and the Government of West Bengal over the payment of a land tax ,
locally called "Salami", remains unresolved. Lawyers acting for the
Group have advised that payment of Salami does not apply,
accordingly no provisions have been made. The sum in dispute,
excluding fines and penalties, amounts to GBP1.2 million.
In the UK, HM Revenue and Customs in 2022 issued a VAT
assessment based on the application of the partial exemption rules
which could result in a potential a liability of GBP1.2 million. An
amount of GBP0.2 million has been provided based on external advice
received. In accordance with legal requirements GBP0.7 million was
paid in 2023 in relation to this assessment and has been included
in administrative expenses in the income statement. This assessment
is being contested.
The Group operates in certain countries where its operations are
potentially subject to a number of legal and tax claims. When
required, appropriate provisions are made for the expected cost of
such claims.
22 Related party transactions
There have been no related party transactions that had a
material e ect on the financial position or performance of the
Group in the first six months of the financial year.
23 Subsequent events
There were no adjusting post balance sheet events.
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END
IR WPUMGRUPWGQG
(END) Dow Jones Newswires
September 01, 2023 02:00 ET (06:00 GMT)
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