TIDMCAM
RNS Number : 8310X
Camellia PLC
01 September 2022
CAMELLIA PLC
INTERIM RESULTS
Camellia Plc (AIM:CAM) announces its interim results for the six
months ended 30 June 2022.
Malcolm Perkins, Chairman and Interim CEO of Camellia,
stated:
"The combination of extreme weather conditions, continuing
disruption on account of the pandemic, war in Ukraine, inflation,
supply chain delays and industrial unrest have all conspired to
make this year one of the most difficult we have encountered. We
are pleased to report that the majority of our operations are
weathering this unprecedented storm well, Camellia remains
financially strong and that we are continuing our strategy of
diversifying our agricultural production by both crop and
origin.
Revenues increased 19% in the period from improvements in all
divisions and reflecting the acquisition of Bardsley England. Due
to the nature of our cropping patterns and sales, we booked a loss
for the period. The H1 loss before tax is higher at GBP15.6 million
(2021 H1: GBP7.8 million loss) in large part due to the impact of
stock market volatility on BF&M's investment valuations and due
to significant wage increases in India and Bangladesh. 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. This year, BF&M, where
stock market performance and the prevalence of hurricanes in the
second half of the year are critical, will also be a significant
factor in our results, as will the ongoing wage negotiations in
Bangladesh.
In light of further wage negotiations in the past few days
between the Bangladesh government and tea workers, the recently
announced 20.8% increase in Bangladesh wages has been amended to a
41.7% increase. Whilst negotiations have not yet concluded,
assuming the proposed increase takes effect, we now expect adjusted
profit before tax for the full year to be below that of last
year.
Once again I should like to thank all our staff across the world
for their continuing contributions both to the business and their
local communities in extremely difficult circumstances."
Operational highlights
-- Tea:
* higher average tea prices in India and Kenya, offset
in part by lower tea production down 10%,
* price pressure in Bangladesh and Malawi as well as
margin impact from significant wage increases in
India and Bangladesh
-- Macadamia production volumes expected to be 20% up though
average selling prices are lower
-- Avocado production expected to be significantly higher than
last year. Prices have been volatile and are difficult to
predict for the full year
-- Bardsley England is showing improved crop prospects and
lower losses are expected than for the prior year
-- Arable crops generally enjoyed a strong first half due to
continued firm pricing for soya and maize, whilst other
speciality crop results have been mixed.
-- Mixed performance from other businesses with significantly
lower results from Associates (BF&M) but improved trading
in both Engineering and Food Service
Strategic highlights
-- Continued focus on expansion of agricultural interests and
reduction in non-agricultural activities
-- BF&M strategic options review has commenced with results
awaited
-- Further progress made on geographic and crop diversification
* In Tanzania, 96Ha of avocado planted in the first
half of the year bringing the total to 152Ha, with a
further 90Ha anticipated to be planted by the end of
H2
* In South Africa, 40Ha of avocado has been planted
with a further 40Ha to be planted in the last quarter
of the year
-- Camellia remains financially strong with significant liquid
resources
Financial highlights
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2021 2021
2022
GBP'm GBP'm GBP'm
----------- -------------- -------------
Revenue - continuing operations 125.8 105.5 277.2
----------- -------------- -------------
Adjusted (loss)/profit before
tax* (17.1) (7.3) 8.8
----------- -------------- -------------
Significant separately disclosed
items and provision releases 1.5 (0.5) (1.7)
----------- -------------- -------------
(Loss)/profit before tax
for the period (15.6) (7.8) 7.1
----------- -------------- -------------
(Loss)/profit after tax for
the period (19.1) (6.1) 4.5
----------- -------------- -------------
(Loss)/earnings per share (724.1)p (220.9)p 83.3p
----------- -------------- -------------
Dividend per share for the
period 44p 44p 146p
----------- -------------- -------------
Net cash and cash equivalents
net of borrowings 37.1 62.1 54.0
----------- -------------- -------------
Investment portfolio market
value 35.5 51.3 40.2
----------- -------------- -------------
* Adjusted (loss)/profit before tax is (loss)/profit before tax
from continuing operations excluding separately disclosed
significant items (eg impairments, restructuring costs, costs of
acquisitions, profit/(loss) on disposal of property or other
assets)
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
The interim report will be available to download from the
investor relations section of the Company's website
www.camellia.plc.uk
Enquiries:
Camellia Plc 01622 746655
Malcolm Perkins, Chairman
and Interim CEO
Susan Walker, CFO
Panmure Gordon 0207 886 2500
Nominated Advisor and Broker
Emma Earl
Erik Anderson
Maitland/AMO
PR
William Clutterbuck 07785 292617
Notes
* Adjusted (loss)/profit before tax is profit before tax,
impairments, profit on disposals of financial and other assets and
before exceptional items or items considered non-operational in
nature. The following items are examples of items considered
exceptional or non-operational which would be excluded in arriving
at adjusted trading profit:
- Profits on disposal of assets classified as held for sale
- Restructuring costs
- Costs of acquisition
- Loss on disposal of subsidiaries
- Impairments of intangible assets and property, plant and equipment
CHAIRMAN'S STATEMENT AND OPERATING REVIEW
TRADING UPDATE
The first half has been very challenging for all of our sta and
their communities. The ongoing e ects of the pandemic combined with
the impact of the Ukraine conflict on world markets and generally
higher rates of inflation, continue to result in a demanding
operating environment. It is against this background that I would
once again like to thank all of our sta for their e orts.
Revenue increased 19% to GBP125.8 million (2021 H1: GBP105.5
million) reflecting higher revenues in all divisions and the effect
of the acquisition of Bardsley England.
As is customary at this time of the year, due to the nature of
our cropping patterns and sales we are reporting a first half loss
before tax of GBP15.6 million (2021 H1: GBP7.8 million loss) which
is higher than that of the corresponding period of 2021 for the
reasons set out below.
The H1 trading loss in Agriculture was 49% higher than that of
H1 of the prior year at a loss of GBP9.1 million. Our tea volumes
in the period were 10% lower though we saw significant improvements
in our average selling prices in India and Kenya, o set in part by
lower prices in Bangladesh and Malawi. However, the benefit of the
price increase in India was insu cient to o set the impact of lower
production coupled with a significant increase in wages in the West
Bengal region e ective from the start of the year. Bangladesh is
also experiencing significantly higher wage inflation back dated to
the start of 2021 from ongoing negotiations. H1 2022 includes a
loss for Bardsley England, which was acquired at the end of July
2021. The arable operations in Brazil produced slightly lower
volumes of soya but prices have been better than last year.
There were improvements in the results from Engineering and Food
Service as markets reopened. The disposal of the loss making
aerospace businesses, Abbey Metal Finishing and Atfin, (which
contributed GBP0.8 million of losses for the Engineering division
in H1 2021) also made a positive impact on profits for the
period.
Unfortunately the results of BF&M swung from a profit in H1
2021 to a very substantial loss in H1 2022 adversely impacting our
results. BF&M made a significant loss in the period due in
large part to the impact on its income statement of marking its
investment portfolio to market valuation following the significant
volatility in equity and bond markets.
Additional detail on the first half results is set out
below.
Strategy
As announced in the AGM statement in June, the Board of Camellia
is focussing on implementing its strategy to invest in the
expansion of the Group's agricultural interests. This is
specifically, to diversify both the location of its interests and
the crops which it produces - this assists to mitigate against the
impact of adverse weather patterns, political instability, and
commodity price movements in particular. Our core competencies are
in managing and developing large-scale bearer plant estates and our
strategy seeks to leverage these competencies.
The actions taken over recent years to reduce the scale of our
non-agriculture activities and assets and reduce our exposure to
loss making operations is expected to continue.
Acquisitions and Disposals
As indicated in our last full year results announcement, a
number of properties and items of art and manuscripts were held for
sale. A gain of GBP1.5 million is reflected in the Income Statement
following the sale of assets with a net book value of GBP2.1
million in H1 2022. A number of items remain to be sold in the
coming months.
Strategic investments
The following strategic investments in the Agriculture division
should be noted:
-- In Tanzania, 96Ha of avocado were planted in the first
half of the year bringing the total to 152Ha, with a further
90Ha anticipated to be planted at the end of the year
-- In South Africa, 40Ha of avocado have been planted with
a further 40Ha to be planted in the last quarter of the
year
COVID and Ukraine
As most of the world starts to return to normal after Covid
there has been an increased demand for goods and this, coupled with
the conflict in Ukraine, has led to higher rates of global
inflation and an increased strain on global logistics channels. Key
components for our engineering business are being delayed and
deliveries to some customers are also subject to delay.
Inflationary increases are being experienced in shipping and
logistics costs, in the cost of fuel, electricity, fertilisers and
chemicals, across all operations.
Financial Position
The Group has a strong balance sheet with substantial liquidity
which amounted to GBP37.1 million in cash and cash equivalents net
of borrowings as at 30 June 2022.
As previously stated, the Group may sell certain less liquid,
non income generating assets in order to fund strategically
important acquisitions and investments.
FIRST HALF OPERATING RESULTS
Agriculture
Full year
H1 2022 H1 2021 2021
GBP'm GBP'm GBP'm
Revenue
Tea 77.3 72.9 196.2
Nuts and fruits 17.7 5.6 31.2
Other agriculture 10.7 7.1 11.4
------- ------- ---------
105.7 85.6 238.8
------- ------- ---------
Trading (loss)/profit
Tea (12.8) (7.9 ) 10.8
Nuts and fruits 1.3 0.3 (2.4 )
Other agriculture 2.4 1.5 4.8
------- ------- ---------
(9.1) (6.1 ) 13.2
------- ------- ---------
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
2022 2021 2021 2022 2021 2021
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 61.5 58.3 161.5 15.8 14.6 34.7
Adjusted trading
(loss)/profit* (12.6 ) (7.0 ) 10.7 (0.2 ) (0.9 ) (0.5 )
Trading (loss)/profit (12.6) (7.0 ) 11.3 (0.2) (0.9 ) (0.5 )
* 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 down 10% at 39.6mkg
(H1 2021: 44.1mkg), with the various regions experiencing markedly
different conditions. Pricing has been mixed with weaker average
prices in Malawi and Bangladesh but in India and Kenya, CTC prices
have firmed, whilst Orthodox prices have increased substantially
over the same period last year.
Full year
H1 2022 H1 2021 2021
Volume Volume Volume
mkg mkg mkg
India 8.2 8.1 26.1
Bangladesh 3.1 3.5 14.4
Kenya 6.0 7.4 14.9
Malawi 12.5 13.2 20.0
------- ------- ---------
Total own estates 29.8 32.2 75.4
Bought leaf production 7.9 9.6 19.2
Managed client production 1.9 2.3 4.5
------- ------- ---------
Total made tea produced 39.6 44.1 99.1
------- ------- ---------
India: Despite a more normal deployment of sta following the
relaxation of Covid restrictions, production in the first half of
the year was broadly in line with that of H1 2021 due to
challenging weather conditions which resulted in yields below
historic norms.
Prices for CTC teas in both the Dooars and Assam have been
higher than in H1 2021. Pricing for Assam orthodox teas, which
constitute most of our production in that region, are also
significantly higher than in H1 2021 partially as a result of
disruption in Sri Lanka. As previously announced, wages in West
Bengal increased 15% for 2022. Assam wages have also now been
agreed with an increase of 13% e ective from the beginning of
August which will impact profitability in the second half of the
year. It is still very early in the India tea sales cycle (around
70-75% of sales are made in the second half of the year) which
makes predicting prices for the remainder of the year di cult.
Bangladesh: Due to a very dry start to the season, then very wet
weather and flooding, production is down 11% on H1 2021. Average
pricing was also 11% lower than last year. In recent weeks strike
action by tea industry workers over wages has further impacted
production. As we announced last week, a wage increase of 20.8%
(effective 1 January 2021) had been mandated by the government and
agreed by the unions. However, this was subsequently rejected by
tea workers. Further negotiations have taken place between the
parties resulting in a government mandated increase of 41.7%
(effective 1 January 2021). The final agreement has yet to be
concluded and negotiations are continuing. In the meantime the
estates are slowly returning to work. The most recent auction sales
prices are above those of last year but our average price overall
remains below that of last year.
Kenya: In Kenya a dry first quarter resulted in lower volumes of
tea production nationally than last year. Our estate production for
the first half was 19% below that of the same period of 2021 with
average prices up approximately 27%. We see some risk of downward
price pressure for the remainder of the year due to high stocks of
unsold teas in the market and lower prices in the last couple of
auctions support that concern.
It is pleasing to note that the elections held on 9 August 2022
have been conducted in a peaceful atmosphere. The results are being
contested and the situation remains peaceful nationally.
Malawi: Estate production was down 5% over the same period last
year due to a late arrival of the rains. Prices have remained under
pressure at levels 5% lower than last year on average. Sales have
been delayed due to the logistics challenges arising from a
scarcity of containers and flooding disruption at Durban in South
Africa earlier in the year. Wage increases e ective from 1 August
2022 have been finalised at 13%.
Instant tea, branded tea and tea rooms
India: Branded tea sales volumes are broadly in line with those
of last year however, due to the sales mix, average prices are
lower and margins improved.
UK: Revenue at Jing Tea in H1 2022 is up 45% on prior year
reflecting the reopening of many hotels and restaurants and the
return of customers following the lifting of Covid restrictions.
Although margins have been adversely a ected by inflation,
particularly on packaging and logistics costs, overall losses are
lower than those experienced in H1 2021. The disruption in Sri
Lanka is also having a negative impact on Jing Tea's supply
chain.
Nuts and fruits
Macadamia Avocado Other fruits
Full Full Full
H1 H1 year H1 H1 year H1 H1 year
2022 2021 2021 2022 2021 2021 2022 2021 2021
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 6.0 4.5 10.8 1.4 1.1 11.1 10.3 - 9.3
Adjusted trading
profit/(loss)* 2.5 (0.5) 2.7 0.8 1.0 (0.5) (2.0) (0.2) (4.1)
Trading profit/(loss) 2.5 (0.5) 2.7 0.8 1.0 (0.5) (2.0) (0.2) (4.6)
* 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 20% higher than that of 2021 at 1.6mkg. Higher
volumes are being achieved by all operations, particularly
Malawi.
Although the kernel market is reasonably active there remains a
large inventory of smaller style product carried over from last
year which is impacting average prices. With China still enforcing
lockdowns, the level of demand has not yet recovered in that market
and demand in the USA and Japan, although improving, is still
subdued. Pricing, particularly for commercial grades, continues to
be under pressure 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 2021. The season, which has been slightly
delayed, is now well underway and thus far logistics have generally
worked well despite the challenges presented post pandemic. The
avocado tree has a natural tendency towards alternate or bi-annual
bearing, widely known as 'on' and 'o ' years and 2022 is an 'on'
year. We anticipate total production of estate Hass for the full
year to be approximately 50% above that of 2021.
Pricing in H1 2022 for the limited sales of estate Hass made in
the period has been below that of the same period in 2021. European
markets have improved somewhat in the last few weeks following a
reduction in volumes arriving from Peru. Given the early stage of
the season, it is too soon to predict prices with any certainty for
the remainder of the year.
Other fruits
Bardsley England's crops of cherries, plums and apricots are
reasonable. The apple and pear crops have been subjected to
unprecedented levels of heat and drought conditions in the UK over
the last month which could impact on fruit sizing and volumes.
Bardsley England has experienced significant levels of wage
inflation in conjunction with rises in energy, fertiliser and
transport costs, of which only a part have been absorbed in pricing
adjustments to date. Negotiations continue on pricing with major
customers in preparation for the approaching season. There remain a
number of areas of operational ine ciency in the business where we
see opportunities to materially improve performance. 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.
The grape production season in the Cape ended with a record
harvest 17% up on last year. All the grapes have been sold in a
private sale arrangement to a third-party winery at similar prices
to last year.
The Blueberry operation is in the process of implementing a
change of variety so the volume of production this year is
anticipated to be minimal. Most product will be sold in the local
market. The new varieties being tested, all of which are owned and
supplied by Driscoll's, have thus far shown encouraging yield
results.
Other agriculture
The other agricultural crops have generally had a good first
half and the following is worth noting:
-- In Brazil the prices achieved for the soya crop in the
period were up 38%, despite currency movements, partially
o set by a crop which was down 4%. The maize crop harvested
in the period was up 10% on that of the same period last
year. Prices for wheat, maize and sorghum are expected
to be significantly higher than those of last year but
the profit impact has been tempered somewhat by higher
input costs for fuel, fertilisers and chemicals.
-- Rubber manufactured in H1 was up 74% and prices held firm
compared to last year
Investments
Engineering
The oil and gas services market in Aberdeen has improved with a
corresponding increase in the demand for AJT's Engineering
division's services, however supply chain issues are continuing to
result in lower revenues and a lower contribution from this
operation. Activity in the Site Services division, which is focused
on the renewables sector, has increased over that of H1 2021 with a
resultant improvement in profitability. Overall losses at AJT
Engineering reduced by 25% assisted by tight cost control.
The Engineering division's results for H1 2021 include losses
from Abbey Metal Finishing and its subsidiary Atfin which were both
sold in August 2021. Revenues from these businesses up to the date
of disposal were GBP1.7 million with losses before taxation at
GBP0.8 million.
Food Service
After a di cult start to the year, ACS&T is showing improved
trading as food service businesses in general have opened up. As
previously announced, from the start of the fourth quarter of the
year revenue and profits will be impacted by the loss of a major
transport customer, o set in part by a number of new customers in
its warehousing business.
Investments
Our investment portfolio, which consists principally of listed
equities, at 30 June 2022 was valued at GBP35.5 million (31
December 2021: GBP40.2 million).
Associates
Our share of the results from associates amounted to a loss of
GBP4.6 million (H1 2021: profit of GBP3.8 million). Thus reflects
significantly reduced operating results from BF&M with H1 2022
results negatively impacted by the requirement to mark investments
to market value with movements being taken through the income
statement. Net income from operations after excluding the negative
fair value movements in investments was Bermudian dollar 4.3
million versus Bermudian dollar 13.3 million in the first six
months of 2021. Losses in Q2 have continued to be driven by factors
previously announced on 30 June 2022 including rising interest
rates and stock market volatility. Gross premiums written for H1
2022 increased by 6% from the prior year driven by increased
property premiums and new business. The Life, Health and
Pensions-related businesses experienced higher than anticipated
claims costs and lower underwriting results. Higher reinsurance
costs and a slightly increased incidence of property losses also
impacted BF&M's P&C business in the first half of the
year.
We eagerly await the result of BF&M's strategic options
review.
Property
Further development of redundant agricultural barns on the
Linton Park estate is ongoing.
Pensions
The UK defined benefit scheme is now in a surplus of GBP9.4
million (31 December 2021: surplus GBP14.7 million). The reduction
in the surplus is due mainly to lower asset returns than projected
o set in part by the impact of higher discount rates. The surplus
on the Group's defined benefit pension and post-employment benefit
schemes overall now amounts to GBP2.0 million at 30 June 2022 (31
December 2021: surplus GBP5.1 million).
Dividend
The Board is pleased to declare an interim dividend of 44p per
share (2021 H1: 44p) payable on 7 October 2022 to shareholders
registered at the close of business on 9 September 2022.
Outlook
As always, our financial results remain largely dependent on
Agriculture where most of the production and sales take place in
the second half of the year. This year the results of BF&M,
where stock market performance and the prevalence of hurricanes in
the second half of the year are critical, will also be a
significant factor in our results. It is therefore premature to
provide any firm indication of the likely results for 2022.
However, taking account of the latest position on the Bangladesh
wage negotiations, if current trends continue and assuming a normal
H2 for BF&M, although revenue is expected to be slightly above
market expectations, the adjusted profit before tax for the Group
for the year will now be below market expectations and below that
of last 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 are taking
significant steps to accelerate its implementation.
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 2022
INTERIM MANAGEMENT REPORT
The Chairman's statement and Operating review form part of this
report and includes important events that have occurred during the
six months ended 30 June 2022 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 2021 (the accounts are
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 2021.
As previously reported, chief executive, Tom Franks and
non-executive Directors, Gautam Dalal and William Gibson ceased to
be Directors on 30 June 2022. Rachel English was appointed as an
independent non-executive Director on 8 June 2022. There have been
no other 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 and Interim CEO
31 August 2022
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Notes GBP'm GBP'm GBP'm
Continuing operations
Revenue 5 125.8 105.5 277.2
Cost of sales (113.2) (91.5 ) (215.4)
---------- ---------- -----------
Gross profit 12.6 14.0 61.8
Other operating income 2.1 1.7 2.6
Distribution costs (5.1) (5.3 ) (14.5)
Administrative expenses (22.6) (21.7 ) (49.0)
---------- ---------- -----------
Trading (loss)/profit 5 (13.0) (11.3 ) 0.9
Share of associates' results 7 (4.6) 3.8 7.2
Profit on disposal of assets 1.5 - -
classified as held
for sale
Impairment of intangible assets
and
investment properties, plant
and equipment - (0.5 ) (0.5)
Loss on disposal of subsidiaries - - (0.1)
Profit on disposal of financial
assets 0.1 0.1 0.2
---------- ---------- -----------
Operating (loss)/profit (16.0) (7.9 ) 7.7
Investment income 0.3 0.4 0.5
---------- ---------- --- -----------
Finance income 1.1 0.9 2.2
Finance costs (1.0) (0.7 ) (2.9)
Net exchange gain/(loss) 0.3 (0.2 ) 0.4
Employee benefit expense (0.3) (0.3 ) (0.8)
---------- ---------- --- -----------
Net finance income/(cost) 8 0.1 (0.3 ) (1.1)
---------- ---------- -----------
(Loss)/profit before tax (15.6) (7.8 ) 7.1
------------------------------------ ----- ---------- ---------- --- -----------
Comprising
- adjusted (loss)/profit
before tax 6 (17.1) (7.3 ) 8.8
- profit on disposal of assets
classified as held for sale 6 1.5 - -
- release of provisions for
wage increases 6 - - 0.6
- restructuring costs 6 - - (0.5)
- costs of acquisition 6 - - (1.2)
- loss on disposal of subsidiaries 6 - - (0.1)
- impairment of property,
plant and equipment 6 - (0.5 ) (0.5)
---------- ---------- -----------
(15.6) (7.8 ) 7.1
------------------------------------ ----- ---------- ---------- --- -----------
Taxation 9 (3.5) 1.7 (2.6)
---------- ---------- -----------
(Loss)/profit for the period (19.1) (6.1 ) 4.5
---------- ---------- -----------
(Loss)/profit attributable
to:
Owners of Camellia Plc (20.0) (6.1 ) 2.3
Non-controlling interests 0.9 - 2.2
---------- ---------- -----------
(19.1) (6.1 ) 4.5
---------- ---------- -----------
(Loss)/earnings per share
- basic and diluted 11 (724.1 )p (220.9 )p 83.3p
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'm GBP'm GBP'm
(Loss)/profit for the period (19.1) (6.1 ) 4.5
---------- ---------- -----------
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 - 0.7 1.0
Corporation tax arising on financial
asset disposals before utilisation of
losses - - (2.2)
Unwind of deferred tax on financial
assets - - 2.2
Changes in the fair value of financial
assets (4.4) (0.4 ) 0.8
Deferred tax movement in relation to
fair value adjustments 1.0 - -
Remeasurements of post employment benefit
obligations (2.1) 12.9 20.4
Deferred tax movement in relation to
post employment benefit obligations 0.6 (1.5 ) (3.9)
---------- ---------- -----------
(4.9) 11.7 18.3
---------- ---------- -----------
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation di erences 16.9 (4.2 ) (4.0)
Share of other comprehensive income
of associates - - 0.2
---------- ---------- -----------
16.9 (4.2 ) (3.8)
---------- ---------- -----------
Other comprehensive income for the
period, net of tax 12.0 7.5 14.5
---------- ---------- -----------
Total comprehensive (expense)/income
for the period (7.1) 1.4 19.0
---------- ---------- -----------
Total comprehensive (expense)/income
attributable to:
Owners of Camellia Plc (10.0) 2.1 18.4
Non-controlling interests 2.9 (0.7 ) 0.6
---------- ---------- -----------
(7.1) 1.4 19.0
---------- ---------- -----------
CONDENSED CONSOLIDATED BALANCE SHEET
at 30 June 2022
30 June 30 June 31 December
2022 2021 2021
Notes GBP'm GBP'm GBP'm
ASSETS
Non-current assets
Intangible assets 10.1 6.4 10.1
Property, plant and equipment 12 205.6 189.4 202.1
Right-of-use assets 28.5 12.8 28.8
Investment properties 24.4 21.0 23.1
Biological assets 13.5 12.3 13.4
Investments in associates 73.3 69.2 72.6
Financial assets at fair value
through other comprehensive income 24.4 42.7 27.7
Financial asset at fair value
through profit or loss 8.0 5.9 7.2
Financial assets at amortised
cost 1.4 2.7 1.3
Other investments - heritage
assets 8.8 9.8 8.7
Retirement benefit surplus 16 9.8 6.6 14.8
Trade and other receivables 2.9 2.6 2.7
------- ------- -----------
Total non-current assets 410.7 381.4 412.5
------- ------- -----------
Current assets
Inventories 64.0 59.7 51.7
Biological assets 9.2 5.9 7.8
Trade and other receivables 47.2 33.4 48.5
Financial asset at fair value
through profit or loss 0.3 - 2.7
Financial assets at amortised
cost 1.4 - 1.3
Current income tax assets 4.5 3.5 0.6
Cash and cash equivalents (excluding
bank overdrafts) 49.6 73.2 61.8
------- ------- -----------
176.2 175.7 174.4
Assets classified as held for
sale 13 5.0 6.2 6.6
------- ------- -----------
Total current assets 181.2 181.9 181.0
------- ------- -----------
30 June 30 June 31 December
2022 2021 2021
Notes GBP'm GBP'm GBP'm
LIABILITIES
Current liabilities
Financial liabilities - borrowings 14 (8.0) (7.0 ) (3.3)
Lease liabilities (3.1) (1.7 ) (3.2)
Trade and other payables (61.7) (52.8 ) (59.2)
Current income tax liabilities (6.1) (2.7 ) (3.0)
Employee benefit obligations 16 (1.2) (1.5 ) (1.1)
Provisions 15 (17.9) (13.7 ) (11.8)
------- ------- -----------
(98.0) (79.4 ) (81.6)
Liabilities related to assets
classified as held for sale 13 (2.0) (3.0 ) (2.0)
------- ------- -----------
Total current liabilities (100.0) (82.4 ) (83.6)
------- ------- -----------
Net current assets 81.2 99.5 97.4
------- ------- -----------
Total assets less current liabilities 491.9 480.9 509.9
------- ------- -----------
Non-current liabilities
Financial liabilities - borrowings 14 (4.5) (4.1 ) (4.5)
Lease liabilities (20.8) (7.7 ) (21.5)
Deferred tax liabilities (36.7) (36.8 ) (38.0)
Employee benefit obligations 16 (6.6) (9.9 ) (8.6)
------- ------- -----------
Total non-current liabilities (68.6) (58.5 ) (72.6)
------- ------- -----------
Net assets 423.3 422.4 437.3
------- ------- -----------
EQUITY
Called up share capital 0.3 0.3 0.3
Share premium 15.3 15.3 15.3
Reserves 360.5 359.3 373.0
------- ------- -----------
Equity attributable to owners
of Camellia Plc 376.1 374.9 388.6
Non-controlling interests 47.2 47.5 48.7
------- ------- -----------
Total equity 423.3 422.4 437.3
------- ------- -----------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2022
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Notes GBP'm GBP'm GBP'm
Cash (used in)/generated from
operations
Cash flows from operating activities 17 (4.3) (13.5 ) 1.9
Interest received 1.1 0.9 2.1
Interest paid (0.9) (1.0 ) (2.9)
Income taxes paid (4.5) (9.2 ) (13.1)
---------- ---------- -----------
Net cash flow from operating
activities (8.6) (22.8 ) (12.0)
---------- ---------- -----------
Cash flows from investing activities
Purchase of property, plant and
equipment (7.0) (4.9 ) (10.7)
Proceeds from sale of non-current
assets 0.3 0.3 0.7
Proceeds from sale of assets held
for sale 3.6 - -
Proceeds from sale of heritage
assets - - 0.1
Additions to investment property (1.3) (0.2 ) (0.9)
Biological assets: non-current
- disposals 0.2 0.3 0.5
Payment for acquisition of a businesses/subsidiary
net of cash acquired (0.8) - (3.7)
Purchase of non-controlling interest - - (5.9)
Dividends received from associates 1.9 1.8 3.0
Purchase of investments (0.4) (4.8 ) (8.9)
Proceeds from sale of investments 1.5 4.0 21.3
Income from investments 0.3 0.4 0.5
---------- ---------- -----------
Net cash flow from investing
activities (1.7) (3.1 ) (4.0)
---------- ---------- -----------
Cash flows from financing activities
Equity dividends paid (2.8) - (5.2)
Dividends paid to non-controlling
interests (4.4) (1.2 ) (1.9)
New loans 0.4 1.4 3.8
Loans repaid (1.2) (1.9 ) (13.1)
Payments of lease liabilities (2.0) (0.6 ) (2.0)
---------- ---------- -----------
Net cash flow from financing
activities (10.0) (2.3 ) (18.4)
---------- ---------- -----------
Net decrease in cash and cash
equivalents (20.3) (28.2 ) (34.4)
Cash and cash equivalents at
beginning of period 59.9 94.9 94.9
Exchange gains/(losses) on cash 2.9 (0.4 ) (0.6)
---------- ---------- -----------
Cash and cash equivalents at
end of period 18 42.5 66.3 59.9
---------- ---------- -----------
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 2022
Attributable to the owners of Camellia
Plc
Share Share Treasury Retained Other Non-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
2021 0.3 15.3 (0.4) 356.4 5.0 376.6 49.4 426.0
Loss for the
period - - - (6.1) - (6.1) - (6.1)
Other
comprehensive
income/(expense)
for the period - - - 13.7 (5.5) 8.2 (0.7) 7.5
Dividends 10 - - - (4.0) - (4.0) (1.2) (5.2)
Share of
associate's
other equity
movements - - - 0.2 - 0.2 - 0.2
------- ------- -------- -------- -------- ----- --------------- ------
At 30 June
2021 0.3 15.3 (0.4) 360.2 (0.5) 374.9 47.5 422.4
------- ------- -------- -------- -------- ----- --------------- ------
At 1 January
2021 0.3 15.3 (0.4) 356.4 5.0 376.6 49.4 426.0
Profit for
the period - - - 2.3 - 2.3 2.2 4.5
Other
comprehensive
income/(expense)
for the period - - - 13.8 2.3 16.1 (1.6) 14.5
Transfer of
realised gains
on disposal
of financial
assets - - - 11.0 (11.0) - - -
Dividends 10 - - - (5.2) - (5.2) (1.9) (7.1)
Companies joining
the Group - - - - - - 5.3 5.3
Adjustment
arising from
change in
non-controlling
interest - - - (1.4) - (1.4) 1.4 -
Purchase of
non-controlling
interests - - - 0.2 - 0.2 (6.1) (5.9)
------- ------- -------- -------- -------- ----- --------------- ------
At 31 December
2021 0.3 15.3 (0.4) 377.1 (3.7) 388.6 48.7 437.3
(Loss)/profit
for the period - - - (20.0) - (20.0) 0.9 (19.1)
Other
comprehensive
(expense)/income
for the period - - - (0.5) 10.5 10.0 2.0 12.0
Transfer of
realised gains
on disposal
of financial
assets - - - 0.2 (0.2) - - -
Dividends 10 - - - (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) 354.3 6.6 376.1 47.2 423.3
------- ------- -------- -------- -------- ----- --------------- ------
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 2022 (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 2021.
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 2021 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 2022. 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 2021,
except as detailed in note 6. Amendments to IFRSs e ective for the
financial year ending 31 December 2022 are not expected to have a
material impact on the Group.
3 Going concern
As set out in the Chairman's statement and Operating review, our
businesses are currently operating broadly as normal. Our
experience over the last years has given us valuable insight into
how the pandemic impacts our markets and businesses and an insight
into how the Ukraine conflict may impact our businesses in the
short-term. Despite this, it remains di cult to predict with any
certainty the impact on the Group during the remainder of this
year. Accordingly, we continue to take actions to conserve cash by
focusing on e ciencies, minimising our operating costs and focusing
capital expenditure across the Group.
The Directors considered the impact of the current trading
environment on the business for the next 15 months. We have
considered several variables which may impact revenue, profits and
cash flows. In light of the nature of the business, we expect the
agriculture businesses will continue to operate broadly as
currently. We have assumed that the food service market continues
to recover gradually over the course of the next year.
At 30 June 2022, the Group had cash and cash equivalents of
GBP42.5 million with loans outstanding of GBP5.4 million. In
addition, the Group had undrawn short-term loans and overdraft
facilities of GBP22.5 million and a portfolio of liquid investments
with a fair market value of GBP35.5 million.
The Directors have modelled various severe but plausible
scenarios using assumptions including the combined e ect of reduced
sales volumes for tea, reduced sales volumes for macadamia and
reduced partner grower apple volumes. 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,
apple and avocado 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 Food Service Unallocated Consolidated
Six months Six months Six months Six months Six months
ended ended ended ended ended
30 June 30 June 30 June 30 June 30 June
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue
External sales 105.7 85.6 6.6 8.7 13.0 10.6 0.5 0.6 125.8 105.5
----- ----- ----- ----- ----- ------ ----- ----- ------ -----
Adjusted trading (loss)/profit (9.1) (6.1) (0.5) (0.9) 0.6 - (4.0) (3.8) (13.0) (10.8)
Separately disclosed items - - - (0.5) - - - - - (0.5)
----- ----- ----- ----- ----- ------ ----- ----- ------ -----
Trading (loss)/profit (9.1) (6.1) (0.5) (1.4) 0.6 - (4.0) (3.8) (13.0) (11.3)
Share of associates' results - - - - - - (4.6) 3.8 (4.6) 3.8
Profit on disposal of assets classified as held for sale - - - - - - 1.5 - 1.5 -
Impairment of property, plant and equipment - - - (0.5) - - - - - (0.5)
Profit on disposal of financial assets 0.1 0.1 - - - - - - 0.1 0.1
----- ----- ----- ----- ----- ------ ----- ----- ------ -----
Operating (loss)/profit (9.0) (6.0) (0.5) (1.9) 0.6 - (7.1) - (16.0) (7.9)
----- ----- ----- ----- ----- ------ ----- ----- ------ -----
Comprising
* adjusted operating (loss)/profit before tax (9.0) (6.0) (0.5) (1.4) 0.6 - (8.6) - (17.5) (7.4)
* profit on disposal of assets classified as held for
sale - - - - - - 1.5 - 1.5 -
* impairment of property, plant and equipment - - - (0.5) - - - - - (0.5)
----- ----- ----- ----- ----- ------ ----- ----- ------ -----
(9.0) (6.0) (0.5) (1.9) 0.6 - (7.1) - (16.0) (7.9)
---------------------------------------------------------- ----- ----- ----- ----- ----- ------ ----- ----- ------ -----
Investment income 0.3 0.4
Net finance income/(cost) 0.1 (0.3)
------ -----
Loss before tax (15.6) (7.8)
Taxation (3.5) 1.7
------ -----
Loss after tax (19.1) (6.1)
------ -----
Food
Agriculture Engineering Service Unallocated Consolidated
GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue
External sales 238.8 15.3 22.0 1.1 277.2
----------- ----------- ------- ----------- ------------
Adjusted trading profit/(loss) 13.1 (2.3) - (8.8) 2.0
Separately disclosed
items 0.1 - - (1.2) (1.1)
----------- ----------- ------- ----------- ------------
Trading profit/(loss) 13.2 (2.3) - (10.0) 0.9
Share of associates'
results - - - 7.2 7.2
Impairment of property,
plant and equipment - (0.5) - - (0.5)
Loss on disposal of
subsidiaries - (0.1) - - (0.1)
Profit on disposal of
financial assets 0.2 - - - 0.2
----------- ----------- ------- ----------- ------------
Operating profit/(loss) 13.4 (2.9) - (2.8) 7.7
----------- ----------- ------- ----------- ------------
Comprising
* adjusted operating profit/(loss) before tax 13.3 (2.3) - (1.6) 9.4
* impairment of property, plant and equipment - (0.5) - - (0.5)
* loss on disposal of subsidiaries - (0.1) - - (0.1)
* release of provisions for wage increases 0.6 - - - 0.6
* acquisition deal costs - - - (1.2) (1.2)
* restructuring costs (0.5) - - - (0.5)
----------- ----------- ------- ----------- ------------
13.4 (2.9) - (2.8) 7.7
--------------------------------------------------- ----------- ----------- ------- ----------- ------------
Investment income 0.5
Net finance costs (1.1)
------------
Profit before tax 7.1
Taxation (2.6)
------------
Profit after tax 4.5
------------
6 Adjusted (loss)/profit
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 Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'm GBP'm GBP'm
Operating (loss)/profit (16.0) (7.9 ) 7.7
Exceptions or items considered non-operational:
Profit on disposal of assets classified
as held for sale 1.5 - -
Release of provisions for wage increases - - 0.6
Restructuring costs - - (0.5)
Costs of acquisition - - (1.2)
Loss on disposal of subsidiaries - - (0.1)
Impairment of property, plant and equipment - (0.5 ) (0.5)
---------- ---------- -----------
Adjusted operating (loss)/profit before
tax (17.5) (7.4 ) 9.4
Investment income 0.3 0.4 0.5
Net finance income/(costs) 0.1 (0.3 ) (1.1)
---------- ---------- -----------
Adjusted (loss)/profit before tax (17.1) (7.3 ) 8.8
---------- ---------- -----------
The following items have been excluded in arriving at the
adjusted measure and have been separately disclosed:
-- Profits on disposal of assets classified as held for
sale of GBP1.5 million (2021: six months GBPnil - year
GBPnil)
-- A gain resulting from wage provision releases in relation
to prior years following wage agreements reached in
the period of GBPnil (2021: six months GBPnil - year
GBP0.6 million)
-- Restructuring costs at Bardsley England of GBPnil (2021:
six months GBPnil - year GBP0.5 million)
-- Costs of acquisition of Bardsley England of GBPnil
(2021: six months GBPnil - year GBP1.2 million)
-- A loss on disposal of Abbey Metal Finishing of GBPnil
(2021: six months GBPnil - year GBP0.1 million)
-- Impairment charges of GBPnil (2021: six months GBP0.5
million - year GBP0.5 million) in relation to property,
plant and equipment at Abbey Metal Finishing
Following a clarification of our accounting policy in relation
to exceptional items or items considered non--operational in
nature, the release of, or increases to, provisions in relation to
wage increases that relate to prior year are no longer deemed to be
an adjusting item.
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
2022 2021 2021
GBP'm GBP'm GBP'm
(Loss)/profit before tax (4.3) 4.1 7.6
Taxation (0.3) (0.3 ) (0.4)
---------- ---------- -----------
(Loss)/profit after tax (4.6) 3.8 7.2
---------- ---------- -----------
8 Finance income and costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'm GBP'm GBP'm
Finance costs - interest payable on loans
and bank overdrafts (0.6) (0.4 ) (1.1 )
Interest payable on leases (0.4) (0.3 ) (0.7 )
Other interest payable - - (1.1 )
---------- ---------- -----------
Finance costs (1.0) (0.7 ) (2.9 )
Finance income - interest income on short-term
bank deposits 1.1 0.9 2.2
Net exchange gain/(loss) on foreign currency
balances 0.3 (0.2 ) 0.4
Employee benefit expense (0.3) (0.3 ) (0.8 )
---------- ---------- -----------
Net finance income/(cost) 0.1 (0.3 ) (1.1 )
---------- ---------- -----------
9 Taxation on (loss)/profit on ordinary activities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'm GBP'm GBP'm
Current tax
UK corporation tax
UK corporation tax - - 0.2
Double tax relief - - (0.2)
Use of losses to shelter capital gain
on disposal of financial assets - - (2.2)
Adjustment in respect of prior years - - (0.2)
---------- ---------- -----------
Foreign tax - - (2.4)
Corporation tax 3.9 1.0 6.3
Adjustment in respect of prior years - - 0.9
---------- ---------- -----------
3.9 1.0 7.2
---------- ---------- -----------
Total current tax 3.9 1.0 4.8
Deferred tax
Origination and reversal of timing di
erences
United Kingdom 1.8 (1.6 ) (1.5)
Overseas deferred tax (2.2) (1.1 ) (0.7)
---------- ---------- -----------
Tax on (loss)/profit on ordinary activities 3.5 (1.7 ) 2.6
---------- ---------- -----------
Tax on (loss)/profit on ordinary activities for the six months
to 30 June 2022 has been calculated on the basis of the estimated
annual e ective rate for the year ending 31 December 2022.
10 Equity dividends
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'm GBP'm GBP'm
Amounts recognised as distributions
to equity holders in the
period:
Final dividend for the year ended 31
December 2021 of 102p
(2020: 144p) per share 2.8 4.0 4.0
---------- ----------
Interim dividend for the year ended
31 December 2021 of 44p
per share 1.2
-----------
5.2
-----------
Dividends amounting to GBP0.1 million (2021: 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 2022 of
44p (2021: 44p) per share 1.2 1.2
--- ---
The proposed interim dividend was approved by the board of
Directors on 31 August 2022 and has not been included as a
liability in these financial statements.
11 Earnings/(loss) per share (EPS)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
Loss EPS Loss EPS Profit EPS
GBP'm Pence GBP'm Pence GBP'm Pence
Attributable to ordinary
shareholders (20.0 ) (724.1 ) (6.1 ) (220.9 ) 2.3 83.3
----- ------ ----- ------ ------ -----
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 (2021: six
months 2,762,000 - year 2,762,000), which excludes 62,500 (2021:
six months 62,500 - year 62,500) shares held by the Group as
treasury shares.
12 Property, plant and equipment
During the six months ended 30 June 2022 the Group acquired
assets with a cost of GBP7.0 million (2021: six months GBP4.9
million - year GBP10.7 million). Assets with a carrying amount of
GBP0.3 million were disposed of during the six months ended 30 June
2022 (2021: six months GBP0.3 million - year GBP0.5 million).
Assets with a carrying amount of GBP0.5 million were classified as
held for sale as at 30 June 2022 (2021: six months GBP2.1 million -
year GBP3.8 million).
13 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
2022 2021 2021
GBP'm GBP'm GBP'm
At start of period 6.6 - -
Reclassified from property, plant
and equipment 0.5 2.1 3.8
Reclassified from right-of-use
assets - 3.4 3.4
Reclassified from heritage assets - - 1.0
Reclassified from current assets - 0.7 0.7
------- ------- -----------
7.1 6.2 8.9
Disposals during period (2.1) - (2.3 )
------- ------- -----------
At end of period 5.0 6.2 6.6
------- ------- -----------
Liabilities related to assets classified
as held for sale at
end of the period:
Reclassified from lease liabilities 2.0 3.0 2.0
------- ------- -----------
During the period, a London property and a number of the Group's
heritage assets and other items of art have been sold, realising
cash proceeds of GBP3.6 million.
14 Borrowings
Borrowings (current and non-current) include loans of GBP5.4
million (loans 2021: six months GBP4.2 million - year GBP5.9
million) and bank overdrafts of GBP7.1 million (2021: six months
GBP6.9 million - year GBP1.9 million). The following loan movements
occurred during the six months ended 30 June 2022:
GBP'm
Balance at 1 January 2022 5.9
Exchange di erences 0.3
Repayments (1.2)
New loans 0.4
-----
Balance at 30 June 2022 5.4
-----
15 Provisions
Wages
and Legal
salaries claims Others Total
GBP'm GBP'm GBP'm GBP'm
At 1 January 2021 9.7 8.2 1.1 19.0
Exchange di erences (0.2) (0.1) - (0.3)
Utilised in the period (2.6) (6.5) (0.3) (9.4)
Provided in the period 3.8 - 0.6 4.4
-------- ------ ------ -----
At 30 June 2021 10.7 1.6 1.4 13.7
-------- ------ ------ -----
At 1 January 2021 9.7 8.2 1.1 19.0
Exchange di erences (0.1) (0.1) - (0.2)
Utilised in the period (7.6) (6.9) (0.4) (14.9)
Provided in the period 7.7 - 0.3 8.0
Subsidiaries joining the group - - 0.5 0.5
Unused amounts reversed in
period (0.6) - - (0.6)
-------- ------ ------ -----
At 31 December 2021 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
-------- ------ ------ -----
Current:
At 30 June 2022 15.4 1.1 1.4 17.9
-------- ------ ------ -----
At 31 December 2021 9.1 1.2 1.5 11.8
-------- ------ ------ -----
At 30 June 2021 10.7 1.6 1.4 13.7
-------- ------ ------ -----
The wages and salaries provisions are in respect of ongoing wage
and bonus negotiations in India, Kenya and Bangladesh.
Legal claims related to the expected cost of the defence of the
litigation concerning our East African operations, including
settlements and progressive measures, the majority of which was
disbursed in early 2021.
Others relate to provisions for claims and dilapidations.
16 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 have been updated to 30 June 2022
from the valuations as at 31 December 2021 for the purpose of IAS
19 by the actuaries and the movements have been reflected in this
interim statement.
An actuarial loss of GBP2.1 million was realised in the period
in relation to the Group's employee obligations of which GBP5.4
million related to the UK defined benefit pension scheme. In
relation to the UK defined benefit pension scheme a loss of GBP48.0
million was realised in relation to the scheme assets, a gain of
GBP43.6 million was realised in relation to changes in the
underlying actuarial assumptions and an experience loss of GBP1.0
million was realised. The assumed discount rate has increased to
3.75% (31 December 2021: 1.75%), the assumed rate of inflation
(CPI) has decreased to 2.25% (31 December 2021 2.50%). There has
been no change in the mortality assumptions used. This scheme
continues to hold a significant amount in a liability-driven
investment to reduce overall volatility.
17 Reconciliation of (loss)/profit to cash flow
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2022 2021 2021
GBP'm GBP'm GBP'm
(Loss)/profit from operations (16.0) (7.9 ) 7.7
Share of associates' results 4.6 (3.8 ) (7.2 )
Depreciation and amortisation 6.8 6.1 13.4
Depreciation of right-of-use assets 1.4 0.5 1.6
Impairment of assets and provisions - 0.5 0.5
Realised movements on biological assets
- non-current - - (1.5 )
Financial assets fair value through
profit or loss - gain (0.1) - (0.1 )
Profit on disposal of non-current assets - (0.1 ) -
Profit on disposal - assets held for
sale (1.5) - -
Loss on disposal of subsidiaries - - 0.1
Profit on disposal of financial assets (0.1) (0.1 ) (0.2 )
Movements in provisions 5.7 (5.0 ) (7.0 )
Increase in working capital (5.3) (5.0 ) (3.5 )
Di erence between employee benefit
obligations funding contributions and
cost charged 0.2 1.3 (1.9 )
---------- ---------- -----------
Cash (used in)/generated from operations (4.3) (13.5 ) 1.9
---------- ---------- -----------
18 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
2022 2021 2021
GBP'm GBP'm GBP'm
Cash and cash equivalents 49.6 73.2 61.8
Overdrafts repayable on demand (included
in current liabilities - borrowings) (7.1) (6.9 ) (1.9)
---------- ---------- -----------
42.5 66.3 59.9
---------- ---------- -----------
19 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
GBP6.6 million.
In India, assessments have been received for excise duties of
GBP3.8 million, sales and entry tax of GBP1.0 million and of GBP0.7
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 GBP1.3 million.
The Group operates in certain countries where its operations are
potentially subject to a number of legal claims. When required,
appropriate provisions are made for the expected cost of such
claims.
20 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.
21 Subsequent events
There were no adjusting post balance sheet events.
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IR WPUMPRUPPGQG
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