Camellia PLC Trading update
RNS Number : 8831K
27 April 2020
27 April 2020
Camellia Plc (the "Company")
As a result of the current and rapidly changing developments
relating to the COVID-19 virus outbreak, Camellia Plc is issuing a
further update on trading.
First, we would like to reiterate our thanks to all of our staff
around the world for their continuing support both within the
business but also within the communities in which they operate.
All our agricultural operations continue to work as close to
normal as is possible with the exception of India. Following the
shut down in India announced on 24 March there has been a gradual
easing of restrictions and currently all tea estates are open but
utilising only 25% of their workforce in West Bengal and 50% of the
workforce in Assam in order to maintain social distancing. As a
consequence, and as indicated in our trading update of 1 April, we
expect to lose the majority of our lucrative first flush and if the
current restrictions continue a significant proportion of our
second flush crops in India.
Elsewhere the restrictions that we are seeing globally continue
to increase with all our countries of operation experiencing some
form of lock down. It remains unclear the extent of the impact
these restrictions will have on our production levels, our
distribution channels, demand for our produce and access to market
for our perishable crops such as avocado and citrus. A small number
of tea auctions have been cancelled in recent weeks although some
have since resumed or are scheduled to resume in May. Overall the
tea price during the first quarter was exceptionally poor as a
result of the very high production levels of 2019, but as a
consequence of the current crisis we have seen some signs of
increased demand and prices for our teas.
As a result of very dry hot weather in Malawi and South Africa
during the fourth quarter of 2019 we are also anticipating a
decline in our macadamia production for 2020 and reduced global
demand is also likely to adversely impact prices.
Our engineering businesses are operating at close to normal.
Both AJT Engineering (due to its role in the energy sector) and
Abbey Metal Finishing (due to its role for aerospace and military)
are deemed to be essential businesses. We are concerned however
that issues in the wider economy could mean that demand in the oil,
energy and aerospace sectors will be very weak in the second half
of the year.
ACS&T continues to operate but the reduced demand for its
transport services which we mentioned on 1 April, means that
profitability in H1 2020 is expected to be significantly lower than
that for the same period in 2019. Jing Tea continues to trade at a
substantially reduced level. Both businesses' trading results for
the remainder of the year are dependent on the timing of any
resumption of operations in the hospitality and food service
All our UK businesses have utilised the UK Government's
Coronavirus Job Retention Scheme for those employees where it is no
longer possible for them to work.
The Group has a strong balance sheet with substantial cash
liquidity which amounted to GBP77.1 million in cash and cash
equivalents net of borrowings as at 31 March 2020. In addition, our
investment portfolio had a market value of GBP43.8 million at 31
March 2020. We continue to conserve cash wherever possible against
a fast changing and unpredictable backdrop. Further to the
announcement on 1 April 2020, the Board has decided not to declare
a final dividend in respect of the 2019 financial year and will
review this decision at the time of the interim results when the
outlook may be clearer.
As a Group we are uniquely placed to be able to assist in this
crisis. We currently manage over 100 hospitals and clinics in some
of the world's poorest countries where there is little access to
public healthcare. Wherever appropriate our operations are working
with the local authorities to ensure that these facilities are used
for the benefit of the whole community. In addition, we are taking
a wide range of steps across different businesses to help wherever
possible. These steps include work on ventilator parts by our
engineering businesses in the UK; bulk purchasing of food in Kenya
to ensure that our staff and their families are not forced to pay
extortionate prices; purchasing hospital supplies in Malawi;
payment of wages and distribution of food to our staff in India,
whether in lock down or working and the provision of hygiene and
social distancing education.
We anticipate that these will show an underlying pro t before
tax from continuing operations slightly above market
The profit before tax from our continuing operations for 2019 is
expected to be impacted by the following:
-- A GBP9.8 million gain from the release of provisions for wage
increases relating to prior years in our agriculture operations
following progress on wage negotiations, as previously
-- A GBP3.6 million charge in Bangladesh for workers pro t
participation obligations for prior years which has been recognised
in 2019 as a consequence of regulatory developments in the
We intend to issue our audited 2019 annual accounts on 7 May
2020. We will update shareholders about the timing and format of
the AGM in due course.
Whilst the results for 2020 are likely to be very substantially
below those of 2019 it is not yet possible to give further guidance
at this time. The situation continues to develop rapidly and the
Company will make further announcements as appropriate.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Camellia Plc 01622 746655
Tom Franks, CEO
Susan Walker, CFO
Panmure Gordon 020 7886 2500
Nominated Adviser and Broker
William Clutterbuck 07785 292617
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(END) Dow Jones Newswires
April 27, 2020 02:00 ET (06:00 GMT)