Final Results
Camellia PLC
27 April 2006
Camellia Plc
Preliminary Results For Year Ended 31 December 2005
Highlights from the results:-
Year ended Year ended
31 December 31 December
2005 2004
£'000 £'000
Revenue - continuing operations 152,743 156,288
Profit before tax 22,275 8,013
Profit for the period 23,569 6,642
Earnings per share 793.2 p 217.8 p
Dividends 89 p 88 p
Chairman's statement
The accounts for 2005 reflect a number of significant changes both in the
composition of the group and those arising from compliance with International
Financial Reporting Standards. In November 2005, Camellia acquired the
outstanding minority shareholding in Linton Park Plc resulting in a gain of
£6.53 million partially offset by expenses of £1 million. Profits on the
disposal of investments, fixed assets and shares in a subsidiary company
amounted to £4.16 million and there was a gain arising from changes in the fair
value of biological assets of £4.15 million. The profit before tax of £22.28
million including the above mentioned items, compares with a re-stated profit of
£8.01 million for 2004. In addition, the profit for the period includes a net
exceptional gain of £3.06 million following the disposal of the group's interest
in its Australian citrus operations and the resultant post tax profit
attributable to shareholders of £20.33 million compares with £5.52 million in
2004. Earnings per share increased to 793.2p from 217.8p.
As stated above, part of the earnings includes a gain arising from changes in
the value of biological assets. In my statement last year I expressed my
concerns about including such amounts in the income statement and nothing has
occurred over the last year to alleviate such concerns. We will continue to
identify these changes in fair value on the face of the income statement and my
advice to shareholders is to view such changes, whether they be increases or
reductions, with extreme caution and not to rely on them when assessing the
performance or value of the company.
Dividend
The board is recommending a final dividend of 69p per share which, together with
the interim dividend already paid of 20p per share, brings the total
distribution for the year to 89p per share compared with 88p per share in
respect of 2004.
Agriculture and horticulture
Tea
India
Our operations in India produced a crop of 26.16 million kgs which was
approximately 1 million kgs ahead of the previous year despite the loss of 1.3
million kgs due to a strike in the Dooars during the peak producing month of
July. Prices generally continued to be depressed and the market was adversely
affected by lower exports and a substantial drop in the orthodox market as a
result of a decline in sales to Iran. Our continuing emphasis on quality enabled
us to maintain our position as a premium supplier to the market.
The Goodricke School for Special Education at Siliguri, gifted by The Camellia
Foundation, was formally opened on 11 April 2006 having moved from rented
accommodation to a fine new purpose-built school.
Bangladesh
Production in Bangladesh at 13.25 million kgs was marginally ahead of last year
with prices increasing by an average of 20 per cent.. This resulted in a good
contribution to profits for the year. Replanting of old areas of tea continued
through the year and this will be an on-going exercise for a number of years to
come. A recent decline in the security situation in the country gives some cause
for concern but as yet no problems have been encountered on the tea gardens.
Africa
Production in Africa of 30.8 million kgs was some 5 million kgs below the levels
achieved in 2004.
The drought in East Africa started to impact on Kenyan production towards the
end of the year. Prices achieved in the year were on average 15 US cents per kg
below those in 2004 with the reduction being exacerbated by the strength of the
Kenyan shilling resulting in an adverse effect on profit margins. The drought
continued into the first part of 2006 leading to a significant increase in
prices. Such increase is however not sufficient to cover the increased cost of
production. Our shareholding in Eastern Produce Kenya reduced to 70 per cent.
during the year following the sale of a further 8 per cent. to the existing
minority shareholder. This transaction resulted in a profit of £795,000.
In Malawi, the tea operations managed only to break even for the year. No
significant rain fell between March and late November. This drought, one of the
worst on record, resulted in production being well below 2004 levels and prices
were some 8 US cents lower than the previous year. Good rains were however
received in December 2005, and although some young tea areas have been lost as a
result of the drought, production is returning to more normal levels.
In South Africa slow progress is being made with the disposal of the assets
located on the estates which were closed during 2004. The sale of one estate,
which was not subject to a land claim, has been completed and the level of
compensation to be received for another estate has been agreed with the Land
Claims Commission. It is hoped to have resolved all issues surrounding the
remaining estates during 2006.
Nepal
The political situation in Nepal continues to give serious cause for concern and
the future of our small investment in Himalaya Goodricke Private Limited is
under consideration.
Citrus
The citrus operations in both Chile and South Africa performed disappointingly
in 2005 with wet weather and pest problems resulting in poor pack outs for
export. Excellent results were achieved from the new development in California
and we are presently expanding this operation to utilise available land and
water resources.
Edible nuts
A better than expected 'off-year' crop was achieved from our pistachio orchards
in California and good prices were attained.
Our macadamia production in both South Africa and Malawi showed a considerable
improvement over the previous year and prices remained strong resulting in most
satisfactory profits. However the outlook for 2006 is not as promising as both
countries suffered drought conditions during the period of flowering which has
resulted in a lower fruit set. In addition, market demand has weakened and
prices are expected to be lower.
Other horticulture
Table grape production in South Africa was well below expectations due to
adverse weather conditions particularly at the time of flowering. We decided to
lessen our investment in this sector and therefore sold one of our two table
grape properties in 2005. In Chile production levels increased as the orchards
became more mature. Income was adversely affected by the strengthening of the
local currency.
Wine grape production in Chile and South Africa was satisfactory. Prices in
Chile were considerably ahead of the previous year due to the increasing
maturity of our vines but the global market remains very competitive. There are
however tentative signs that demand for our South African wines is improving.
The avocado crop in Kenya was slightly below the levels achieved in 2004 but
good prices were received for our exports although once again the strength of
the Kenyan shilling had a negative impact on income. Good progress is being made
with the building of the new avocado pack house, which is expected to be
operational in 2006.
The pineapple joint venture in Kenya again made a significant contribution to
profits. The existing agreement expires in stages up to 2008 but negotiations to
enter into a new agreement have been unsuccessful. In view of this, a
development plan is being prepared for alternative use of the land presently
occupied by pineapples.
Rubber production in Bangladesh again showed a small improvement and when
combined with higher prices, produced a good contribution to profits. Newly
installed drying facilities are helping to control the cost of production.
Our farming operations in Brazil were affected by dry weather, poor commodity
prices and the strength of the local currency. Nonetheless a small operational
profit was achieved which together with investment income produced a worthwhile
result albeit at a lower level than the previous year.
Food storage and distribution
As a result of the loss of a major contract at the beginning of 2005 Associated
Cold Stores and Transport had another disappointing year. The markets and
locations in which the company operates remain very competitive with continued
downward pressure on transport, cold storage and handling rates. In addition,
increasing energy and fuel costs have affected the results. Further controllable
cost reductions have taken place and space utilisation rates improved marginally
during the year.
Affish's results in The Netherlands were slightly better than last year but the
fish trading business is still suffering from very tight margins. Wylax's fish
distribution business showed a modest improvement but there has not been any
meaningful recovery in the Dutch restaurant sector.
Engineering
The buoyant oil and gas sector has had a positive impact on the results of AJT
Engineering in Aberdeen, where demand for its BOP (blow out preventor) repairs
and new build service is strong. The cold extrusion business continues to
expand.
Losses on a large contract undertaken by AKD in Lowestoft produced another
disappointing result, notwithstanding the site operating close to full capacity.
The management team is being restructured in order that the company can take
advantage of increased activity in the southern sector of the North Sea.
Abbey Metal Finishing achieved further important accreditations during the year
which are necessary for it to operate in the aerospace sector. The company
produced satisfactory operating profits and demand for its services continues to
grow.
The galvanizing business of British Metal Treatments and the profile cutting and
precision grinding business of General Utilities both produced good results for
the year.
Banking and financial services
The Duncan Lawrie private banking group experienced significant growth during
the year and produced a profit 23 per cent. above last year. The acquisition of
the investment management business of Douglas Deakin Young has to date met our
expectations in full. We hope to build on this area of our business whilst at
the same time enhancing the other activities of the bank in offering integrated
wealth management.
Pharmaceuticals
Following a strong second half year, the Siegfried group reported sales of CHF
318.3 million for 2005. Consolidated net profit increased from CHF 16.4 million
in 2004 to CHF 36.5 million in 2005.
The sales increase is due mainly to an improvement in the Siegfried Division's
core business of manufacturing active pharmaceutical ingredients. Satisfactory
results were also achieved in the markets for generics and biologically produced
active ingredients. The Sidroga division also reported improved sales and
operating results.
Other associated undertakings and investments
The United Leasing Company Limited in Bangladesh produced profits before tax of
£2.30 million compared with £2.64 million in 2004. This reduction in profits is
largely due to increased competition. Also, in Bangladesh where the insurance
market remains competitive, The United Insurance Company Limited produced
results similar to last year. Its subsidiary, The Surmah Valley Tea Company
Limited improved its profit for the year.
Our investments in Bermuda and elsewhere are now shown in the balance sheet at
market value rather than cost in accordance with International Financial
Reporting Standards. The underlying investments performed well in 2005 and
investment income increased.
Development
Organic growth will continue on the majority of our agricultural properties as
will improvements to infrastructure and welfare facilities. Where assets are in
need of development to maintain their value and effectiveness we are making the
necessary improvements, such as in some of our tea factories in India and by
replanting areas of tea that are in decline through old age. Support is also
given to the growth of those activities where there are attractive opportunities
for extending and expanding those operations, such as at Duncan Lawrie and the
galvanising business of British Metal Treatments. Developing our management
structures to ensure they remain efficient and effective is also an ongoing
process and is currently being pursued further as a result of the merger with
Linton Park.
Pensions
The group operates a number of defined benefit pension schemes, and in common
with the majority of such schemes in the UK, the group's UK schemes are in
deficit. The combined deficits have previously been an off-balance sheet item,
but as a result of new accounting regulations have now become an on-balance
sheet liability. The newly appointed Pensions Regulator has wide powers over
companies with pension scheme deficits that could hinder those companies from
making normal commercial decisions. Whether such draconian powers are
appropriate is a matter for debate but what seems incomprehensible is that the
funding of the Pension Protection Fund penalises those schemes that are already
in deficit making an unfortunate situation even worse.
Leaving aside the power of the Pensions Regulator and the impact he can have on
the way in which a company is managed, one feels a sense of enormous frustration
at the manner in which defined benefit schemes have been targeted in such a way
as to make them virtually untenable. It is, after all, not so long ago that
actuaries were busy calculating the improved benefits that could be given, or
contribution holidays taken, to utilise surpluses that would otherwise, at the
government's behest, have to be returned to sponsoring companies and then taxed.
Companies operating rationally were not therefore permitted to maintain
reasonable pension fund surpluses for the time when circumstances changed. And
change they certainly did. Firstly, advance corporation tax credits were removed
from pension scheme investment income and then equity market values fell
significantly. This has more recently been exacerbated by the lemming-like rush,
particularly by pension funds driven to do so in part by changes in the
regulatory environment, into bonds (the wisdom of which is at last being
challenged by serious commentators).
This has forced up bond prices and forced down bond yields, a key measure used
by actuaries to calculate a pension fund's liabilities - the lower the real
yield the greater the liability. In addition, life expectancy has grown rapidly
which has forced actuaries to change another of the key assumptions they use to
value pension schemes' liabilities. Suddenly schemes faced large deficits which,
as a result of the change in the accounting rules, have had a significant impact
on employers' balance sheets. The unpredictability of such changes to actuarial
assumptions and the resultant movement in pension schemes' deficits together
with the fact that the Pensions Regulator requires deficits to be paid off over
a far shorter period than previously recommended by the actuaries (leading to
companies facing a bill that could easily render them uncompetitive in their
market place) has sounded the death knell of many defined benefit schemes. Based
on this experience, companies might well feel that, even if they sort out the
present situation, it could all so easily happen again. Thus we see the frequent
press coverage of UK employers making significant changes to their occupational
pension schemes.
Full actuarial valuations of two of our schemes are taking place in 2006 and
despite the rise in equity markets we nonetheless expect contribution rates to
increase. It would be a great pity, particularly for scheme members, if our own
defined benefit schemes are closed as a result of assumptions that subsequently
could be found to be inaccurate or based on short term distortions. However, we
cannot place the group in jeopardy and consequently we will over the next few
months be reviewing in great depth our ability to continue with defined benefit
schemes in their current form. I can only hope that common sense, which
sometimes to the layman seems to be missing, will in the end prevail.
Corporate social responsibility
During 2005 the board adopted a Statement of Business Principles which
encapsulates the standards to which the group's businesses operate. The
Statement, which can be viewed on the company's website (www.camellia.plc.uk),
sets out the group's policy on business integrity, health and safety,
environmental matters and social issues and human resources. Next year's
accounts will include a business review as required by recent legislation which
will cover these areas in detail.
Directors and staff
I am pleased to welcome Chris Relleen to the board as deputy chairman and as an
independent non-executive director. Chris will bring a wealth of experience and
expertise and will I am sure make a significant contribution to our
deliberations.
Abu Subhan will be retiring as a director at the conclusion of the forthcoming
annual general meeting. Abu has been responsible for the redevelopment of the
group's interests in Bangladesh and has improved their profitability with great
care and vision. His contribution has been immense and I wish him a long, happy
and healthy retirement.
2005 has been a successful year in many ways and this could not have been
achieved without the skill and dedication of our staff who not only have to deal
with the day to day operations but also comply with increasing regulatory
requirements.
M C Perkins
Chairman
27 April 2006
Consolidated income statement
for the year ended 31 December 2005
2005 2004
Notes £'000 £'000
Continuing operations
Revenue 2 152,743 156,288
Cost of sales (107,968) (112,498)
------------- ------------
Gross profit 44,775 43,790
Other operating income 2,373 955
Distribution costs (7,969) (7,337)
Administrative expenses (35,978) (33,941)
------------- ------------
Trading profit 2 3,201 3,467
Share of associates' results 5,842 2,924
Profit on disposal of non-current assets 874 1,283
Profit on disposal of 'available-for-sale'
investments 2,488 844
Profit on part disposal of a subsidiary 795 -
Profit on part disposal of an associate - 121
Gain arising from changes in fair value of
biological assets 4,147 1,722
Gain/(loss) on group restructuring 3 5,523 (1,634)
------------- ------------
Profit from operations 22,870 8,727
Investment income 1,313 1,447
Net finance costs (1,908) (2,161)
------------- ------------
Profit before tax 22,275 8,013
Taxation (1,764) (2,741)
------------ ------------
Profit for the period from continuing
operations 20,511 5,272
Discontinued operations
Profit for the period from discontinued
operations 2 3,058 1,370
------------ ------------
Profit for the period 23,569 6,642
------------ ------------
Profit attributable to minority interests 3,243 1,127
Profit attributable to equity shareholders' 20,326 5,515
------------ ------------
23,569 6,642
------------ ------------
Earnings per share - basic and diluted 5 793.2p 217.8p
Earnings per share from continuing
operations - basic and diluted 5 692.2p 194.4p
Consolidated balance sheet
at 31 December 2005
2005 2004
£'000 £'000
Non-current assets
Goodwill 4,220 -
Intangible assets 368 398
Property, plant and equipment 82,069 82,813
Biological assets 86,679 79,805
Prepaid operating leases 1,062 876
Investments in associates 65,672 60,689
Deferred tax assets 1,330 691
Financial assets 61,831 43,371
Retirement benefit surplus 2,634 3,212
Trade and other receivables 583 756
------------ -----------
Total non-current assets 306,448 272,611
------------ -----------
Current assets
Inventories 18,204 20,918
Trade and other receivables 50,699 50,606
Current income tax assets 1,820 1,699
Cash and cash equivalents 170,940 150,857
------------ -----------
241,663 224,080
Non-current assets classified 1,036 11,157
as held for sale ------------ -----------
Total current assets 242,699 235,237
------------ -----------
Current liabilities
Borrowings (21,234) (28,282)
Trade and other payables (201,779) (166,484)
Deferred income from
anticipated sale - (3,591)
Current income tax liabilities (1,888) (2,132)
Other employee benefit obligations (190) (213)
Provisions (88) (506)
------------ -----------
Total current liabilities (225,179) (201,208)
------------ -----------
Net current assets 17,520 34,029
------------ -----------
Total assets less current liabilities 323,968 306,640
Non-current liabilities
Borrowings (10,959) (20,541)
Deferred tax liabilities (27,061) (26,246)
Retirement benefit obligations (21,284) (26,290)
Other employee benefit obligations (1,399) (1,277)
Other non-current liabilities (353) (436)
Provisions (70) (113)
------------- -----------
Total non-current liabilities (61,126) (74,903)
------------- -----------
Net assets 262,842 231,737
------------- -----------
Equity
Called up share capital 284 260
Reserves 241,632 187,229
------------- -----------
Shareholders' funds 241,916 187,489
Minority interests 20,926 44,248
------------- -----------
Total equity 262,842 231,737
------------- -----------
Consolidated cash flow statement
for the year ended 31 December 2005
2005 2004
Notes £'000 £'000
Cash generated from operations
Cash flows from operating activities 6 20,753 11,401
Interest paid (2,551) (2,785)
Income taxes paid (3,435) (2,552)
Interest received 635 265
Dividends received from associates 1,564 2,149
---------- ----------
Net cash flow from continuing operating activities 16,966 8,478
Net cash flow from discontinued operating
activities 1,730 6,330
---------- ----------
Net cash flow from operating activities 18,696 14,808
Cash flows from investing activities
Purchase of intangible assets (105) (70)
Purchase of property, plant and equipment (6,844) (5,328)
Proceeds from sale of non-current assets 2,418 2,244
Disposal of subsidiaries/businesses (net of cash
disposed) 7 12,883 540
Part disposal of a subsidiary 1,673 -
Acquisition of subsidiary (net of cash acquired) 7 (4,393) (52)
Purchase of minority interests (3,027) (482)
Purchase of shares in associate (16) -
Proceeds from sale of shares in associates - 1,075
Proceeds from sale of investments 3,200 2,589
Purchase of investments (7,141) (3,579)
Income from investments 1,313 1,374
Net cash flow from discontinued operations (1,430) (725)
---------- ----------
Net cash flow from investing activities (1,469) (2,414)
Cash flows from financing activities
Equity dividends paid (2,284) (2,258)
Dividends paid to minority interests (1,306) (1,871)
Net repayment of debt (9,213) (5,328)
Purchase of own shares - (16)
Net cash flow from discontinued operations - (3,879)
---------- ----------
Net cash flow from financing activities (12,803) (13,352)
---------- ----------
Net increase/(decrease) in cash and cash
equivalents 4,424 (958)
Cash and cash equivalents at beginning of period (10,637) (9,946)
Exchange (losses)/gains on cash (222) 267
---------- ----------
Cash and cash equivalents at end of period (6,435) (10,637)
---------- ----------
For the purposes of the cash flow statement, cash and cash equivalents are
included net of overdrafts repayable on demand. These overdrafts are excluded
from the definition of cash and cash equivalents disclosed on the balance sheet.
Statement of recognised income and expense
for the year ended 31 December 2005
2005 2004
£'000 £'000
Foreign exchange translation differences 12,725 (7,826)
Actuarial movement on defined benefit pension schemes 4,310 (7,420)
Movement on deferred tax relating to defined benefit
pension schemes 1,204 (244)
Available-for-sale investments:
Valuation gains taken to equity 7,124 5,070
Transferred to profit or loss on sale (1,562) (669)
Other fair value adjustment 135 (49)
Share of associate's fair value adjustments (45) 169
Share of associate's loss on cash flow hedges (585) -
----------- -----------
Net income/(expense) recognised directly in equity 23,306 (10,969)
Profit for the period 23,569 6,642
----------- -----------
Total recognised income and expense for the period 46,875 (4,327)
----------- -----------
Attributable to:
Minority interests 5,767 (1,777)
Equity shareholders' 41,108 (2,550)
----------- -----------
46,875 (4,327)
----------- -----------
Notes
1 General information
The consolidated income statement, consolidated balance sheet, consolidated cash
flow statement, consolidated statement of recognised income and expense and
extracts from the notes to the accounts for 31 December 2005 and 31 December
2004 do not constitute the group's Annual Report and Accounts. The auditors have
reported on the group's statutory accounts for each of the years 2005 and 2004
under section 235 of the Companies Act 1985, which do not contain statements
under sections 237 (2) or (3) of the Companies Act and are unqualified. The
statutory accounts for 2004 under UK GAAP have been delivered to the Registrar
of Companies and the statutory accounts for 2005 will be filed with the
Registrar in due course. Copies of the Annual Report and Accounts will be posted
to shareholders on 5 May 2006.
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the EU. Details
of the accounting policies applied to these financial statements were published
in the group interim financial statements on 28 September 2005.
2 Business and geographical segments
The principal activities of the group are as follows:
Agriculture and horticulture
Engineering
Food storage and distribution
Banking and financial services
For management reporting purposes these activities form the basis on which the group reports its primary divisions.
Segment information about these businesses is presented below:
2005
Agriculture Engineering Food storage Banking and Other Consolidated
and and financial operations
horticulture distribution services
2005 2005 2005 2005 2005 2005
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
External sales 83,861 19,441 38,734 9,350 1,357 152,743
-------- -------- --------- -------- -------- -----------
Trading profit
Segment profit 6,506 223 (1,004) 1,303 339 7,367
-------- -------- --------- -------- --------
Unallocated corporate expenses (4,166)
-----------
Trading profit 3,201
Share of associates' results 68 560 5,214 5,842
Profit on disposal of
non-current assets 874
Profit on disposal of
'available-for-sale'
investments 2,488
Profit on part disposal
of a subsidiary 795
Gain arising from changes in
fair value of biological
assets 4,147 4,147
Gain/(loss) on group
restructuring 5,523
Investment income 1,313
Net finance costs (1,908)
-----------
Profit before tax 22,275
Taxation (1,764)
Profit for the period from
discontinued operations 3,058
-----------
Profit after tax and
discontinued operations 23,569
-----------
Other information
Segment assets 164,534 14,406 29,850 193,716 7,997 410,503
Investment in associates 1,052 2,781 61,839 65,672
Unallocated assets 72,972
-----------
Consolidated total assets 549,147
-----------
Segment liabilities (28,105) (4,016) (7,406) (177,361) (135) (217,023)
Unallocated liabilities (69,282)
-----------
Consolidated total liabilities (286,305)
-----------
Capital expenditure 4,423 461 1,338 366 44
Depreciation (2,956) (837) (2,910) (234) (108)
Amortisation (15) (11) - (78) -
Impairment (111) (179) - - -
2004
Agriculture Engineering Food storage Banking and Other Consolidated
and and financial operations
horticulture distribution services
2005 2005 2005 2005 2005 2005
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
External sales 92,650 13,684 42,007 6,611 1,336 156,288
-------- -------- --------- -------- -------- -----------
Trading profit
Segment profit 7,822 (582) (682) 1,059 478 8,095
-------- -------- --------- -------- --------
Unallocated corporate expenses (4,628)
-----------
Trading profit 3,467
Share of associates' results 8 412 2,504 2,924
Profit on disposal of
non-current assets 1,283
Profit on disposal of
'available-for-sale'
investments 844
Profit on part disposal
of an associate 121
Gain arising from changes in
fair value of biological
assets 1,722 1,722
Gain/(loss) on group
restructuring (1,634)
Investment income 1,447
Net finance costs (2,161)
-----------
Profit before tax 8,013
Taxation (2,741)
Profit for the period from
discontinued operations 1,370
-----------
Profit after tax and
discontinued operations 6,642
-----------
Other information
Segment assets 149,072 13,991 32,862 163,833 10,602 370,360
Investment in associates 1,002 2,345 57,342 60,689
Unallocated assets 76,799
-----------
Consolidated total assets 507,848
-----------
Segment liabilities (26,784) (3,973) (8,287) (140,180) (293) (179,517)
Unallocated liabilities (96,594)
-----------
Consolidated total liabilities (276,111)
-----------
Capital expenditure 3,759 342 1,943 990 -
Depreciation (3,086) (817) (2,838) (212) (99)
Amortisation - (5) (26) (60) -
Impairment (270) - - - -
Segment assets consist primarily of intangible assets, property, plant and equipment, biological assets, prepaid
operating leases,inventories, trade and other receivables and cash and cash equivalents. Receivables for tax have been
excluded. Investments for associates, valued using the equity method, have been shown separately in the segment
information. Segment liabilities are primarily those relating to the operating activities and generally exclude
liabilities for taxes, short term loans, finance leases and non-current liabilities.
Geographical segments
The group operations are based in nine main geographical areas. The United Kingdom is the home country of the parent.
The principal territories in which the group operates are as follows:
United Kingdom
Continental Europe
India
Kenya
Malawi
Bangladesh
North America
South Africa
South America
The following table provides an analysis of the group's sales by geographical market, irrespective of the origin
of the goods/services:
2005 2004
£'000 £'000
United Kingdom 65,242 62,599
Continental Europe 17,799 19,729
India 32,451 28,056
Kenya 11,361 13,681
Malawi 3,118 4,864
Bangladesh 8,375 7,656
North America 4,115 3,395
South Africa 1,987 6,311
South America 3,112 3,320
Other 5,183 6,677
--------- ----------
152,743 156,288
--------- ----------
The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment,
analysed by the geographical area in which the assets are located:
Carrying amount of segment assets Additions to property,
plant and equipment
2005 2004 2005 2004
£'000 £'000 £'000 £'000
United Kingdom 239,591 215,037 2,151 3,251
Continental Europe 3,493 3,501 58 70
India 48,192 44,973 1,548 1,032
Kenya 36,723 30,360 947 746
Malawi 27,962 25,047 841 870
Bangladesh 23,587 21,807 550 438
North America 3,109 3,785 82 306
South Africa 14,721 15,912 254 115
South America 13,125 9,938 387 312
--------- -------- ---------- ----------
410,503 370,360 6,818 7,140
--------- -------- ---------- ----------
Discontinued operations
In March 2005, the group disposed of its 70.5 per cent. holding in East African Coffee Plantations Limited (EACP), as a
result the revenue and results of the EACP group have been excluded from the income statement and are recorded in a
single line on a post-tax basis.
A breakdown of the results of discontinued operations is shown below:
Agriculture and Food storage and Consolidated
horticulture distribution
2005 2004 2005 2004 2005 2004
£'000 £'000 £'000 £'000 £'000 £'000
Revenue
External sales 3,373 29,044 - 187 3,373 29,231
-------- -------- -------- ------- ----------- ---------
Trading profit
Segment profit (499) 2,317 - (17) (499) 2,300
-------- -------- -------- -------
Investment income 1 4
Net finance costs 18 (336)
----------- ---------
(Loss)/profit before tax (480) 1,968
Taxation - (598)
----------- ---------
(Loss)/profit after tax (480) 1,370
Profit on disposal of
discontinued operations 5,167 -
Taxation in relation to
disposal (1,629) -
----------- ---------
Profit for the year from
discontinued operations 3,058 1,370
----------- ---------
Geographical segments
Revenue from the group's discontinued operations was derived as follows:
United Kingdom - 378 - 187 - 565
India 20 817 - - 20 817
Bangladesh - 94 - - - 94
North America 80 6,804 - - 80 6,804
Australia 3,013 15,629 - - 3,013 15,629
Other 260 5,322 - - 260 5,322
-------- -------- -------- ------- ----------- ---------
3,373 29,044 - 187 3,373 29,231
-------- -------- -------- ------- ----------- ---------
3 Gain/(loss) on group restructuring
In November 2005, Camellia Plc acquired the outstanding minority shareholding in
Linton Park Plc. A gain of £6,529,000 was realised as the consideration paid was
lower than the net assets acquired. This gain has been partially offset by
expenses incurred in relation to the transaction of £1,006,000.
The loss in 2004 related to the closure of the group's tea operations in South
Africa and closure costs relating to the Birmingham division of British Metal
Treatments Limited.
4 Equity dividends
2005 2004
£'000 £'000
Amounts recognised as distributions to equity holders
in the period:
Final dividend for the year ended 31 December 2004 of
68.00p (2003: 67.00p) per share 1,765 1,739
Interim dividend for the year ended 31 December 2005
of 20.00p (2004: 20.00p) per share 519 519
-------- ----------
2,284 2,258
-------- ----------
Proposed final dividend for the year ended 31
December 2005 of 69.00p (2004:68.00p) per share 1,961 1,765
-------- ----------
The proposed final dividend is subject to approval by the shareholders at the
Annual General Meeting and has not been included as a liability in these
financial statements and will be payable on 5 July 2006 to shareholders on the
register of members at the close of business on 9 June 2006.
5 Earnings per share (EPS)
2005 2004
Weighted Weighted
average average
number of number of
Earnings shares EPS Earnings shares EPS
£'000 Number Pence £'000 Number Pence
Basic and diluted EPS
Continuing and discontinued operations
Attributable to ordinary
shareholders 20,326 2,562,401 793.2 5,515 2,532,653 217.8
------- --------- ------ ------- ------- -------
Continuing operations
Attributable to ordinary
shareholders 17,737 2,562,401 692.2 4,923 2,532,653 194.4
------- -------- ------ ------- -------- -------
Discontinued operations
Attributable to ordinary
shareholders 2,589 2,562,401 101.0 592 2,532,653 23.4
------- -------- ------ ------- -------- -------
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 during the period, excluding those held by the group as treasury
shares.
6 Reconciliation of profit from operations to cash flow
2005 2004
£'000 £'000
Profit from operations 22,870 8,727
Share of associates' results (5,842) (2,924)
Depreciation and amortisation 7,249 7,365
Impairment of fixed assets 336 1,254
Gain arising from changes in fair value of biological
assets (4,147) (1,722)
Loss on disposal of investment 25 -
Profit on disposal of non-current assets (874) (1,283)
Profit on part disposal of a subsidiary (795) -
Profit on disposal of investments (2,488) (844)
Profit on part disposal of an associate - (121)
(Gain)/loss on group restructuring (5,523) 1,634
Decrease/(increase) in working capital 31,521 (9,412)
Net (increase)/decrease in funds of banking subsidiaries (21,579) 8,727
--------- ---------
20,753 11,401
--------- ---------
7 Acquisition and disposal of businesses
Acquisition Disposal Acquisition Disposal
2005 2005 2004 2004
£'000 £'000 £'000 £'000
Book value of assets and liabilities:
Property, plant and equipment 124 3,252 324 -
Biological assets - 4,292 - -
Financial assets - 75 - -
Deferred tax asset - 29 - -
Cash and cash equivalents 1,252 1,435 81 -
Inventories - 1,386 3 166
Trade and other receivables 626 1,938 17 278
Current income tax assets - 1,101 - -
Non-current assets classified
as held for sale - 11,157 - -
Trade and other payables (577) (9,135) (61) (4)
Net amount due from group undertaking - - - 100
Borrowings - (2,002) (25) -
Other non-current liabilities - (43) - -
--------- ------- --------- --------
1,425 13,485 339 540
Goodwill 4,220 - (23) -
Minority interest - (4,334) (150) -
Profit on disposal - 5,167 - -
--------- ------- --------- --------
5,645 14,318 166 540
--------- ------- --------- --------
Satisfied by:
Cash consideration and costs 5,645 14,318 108 540
Transfer from other investments - - 58 -
--------- ------- --------- --------
5,645 14,318 166 540
--------- ------- --------- --------
Net (outflow)/inflow of cash in respect of
acquisition and disposal of businesses:
Cash consideration and costs (5,645) 14,318 (108) 540
Net cash balances of
business acquired/(sold) 1,252 (1,435) 56 -
Net overdraft of business sold - - - -
--------- ------- --------- --------
(4,393) 12,883 (52) 540
--------- ------- --------- --------
On 17 February 2005, the group acquired 100 per cent. of the issued share
capital of Douglas Deakin Young Limited for cash consideration of £5,645,000.
Monies to the value of £300,000 were retained from the consideration under the
terms of the share sale agreement in respect of certain liabilities that might
arise in respect of zero dividend preference shares.
Douglas Deakin Young Limited contributed £2,669,000 operating income and
£470,000 to the group's profit before tax for the period between the date of
acquisition and the balance sheet date.
In March 2005, the group disposed of its 70.5 per cent. interest in East
African Coffee Plantations Limited for cash considersation of £14,318,000.
Press Enquiries: Malcolm Perkins, Chairman
Tel: 01622 746655
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