Interim Results

Camellia PLC 27 September 2001 INTERIM REPORT 2001 Pre-tax profits of £6,084,000 for the six months to 30th June 2001 compared to £3,714,000 for the same period last year. The increase is mainly attributable to profits realised on the disposal of subsidiaries by Linton Park Plc and by our associate, Siegfried A.G. The Board has declared an interim dividend of 20p per ordinary share payable on 8th November 2001 to shareholders on the register on 12th October 2001. Linton Park The following is an extract from the Chairman's statement dated 27th September 2001: 'Pre-tax profits for the six months ended 30th June 2001 amounted to £8,320,000 compared to £6,724,000 for the first six months of the previous year. Tea production on our plantations in both Kenya and Malawi was satisfactory, but a large national harvest in Kenya has led to a marked reduction in tea prices. There seems little prospect of this trend being reversed in the immediate future. Results from the newly acquired Sapekoe operations in South Africa have been consolidated from 1st May 2001. This period, and indeed that through to 31st December 2001, coincides with the low cropping period in South Africa and the results for this year will not be proportionately representative of a full year's operation. The exceptionally large early coffee crop at Kakuzi last year has led to reduced production this year, but prices have recovered somewhat for the limited quantities of high quality Kenya coffee on offer in the marketplace. This is encouraging but totally at variance with international coffee prices that continue at levels well below cost of production. The future of the coffee industry both in Kenya and elsewhere remains the subject of considerable uncertainty. The acquisition of Sapekoe brings to the Group further plantings of macadamia which, together with the edible nut operations in California, now constitute a significant activity for the Group. The macadamia crops in both South Africa and Malawi are projected to be satisfactory as are prices. Almond production in California is also projected to be good, but prices are expected to be much lower than last year due to oversupply. The pistachio harvest will be very low due to the alternate bearing cycle of this crop. The citrus operations of Yandilla Park in Australia are experiencing a light crop, but prices are reasonable. Activity in the packing shed is high due to outside growers wishing to use the packing and marketing expertise of the group. Wine production in Australia was below expectation due to climatic conditions and the previously very strong wine market is showing signs of weakening. The wine operations in South Africa are also experiencing very competitive market conditions. Table grape production in South Africa and Chile was satisfactory and market prices improved over the previous year. Our UK engineering operations serving the international offshore oil and gas sector have produced a strong result in the first half year. Order books also look good for the rest of the year. Abbey Metal Finishing, the Group's aerospace equipment finishers, have been fully operational since May, following the rebuilding of their plant after last year's fire. The business has already recovered more than two thirds of the average monthly pre-fire turnover. Associated Cold Stores and Transport has had a disappointing first half following the loss of a major transport management contract, which has limited deliveries of ice cream from one of its depots. W. G. White has suffered reduced sales of caviar to its airline customers following further increases in the cost of the product and, in part, due to the absence of Concorde flights. Affish and Wylax, which sell fish to catering outlets in the Netherlands and Mainland Europe, improved their performance. Highland Fuels was sold to its management in May. The profits of the business were considered to be inadequate when compared to the risks associated with the debtor exposure and the prevailing low margins earned. It is pleasing to report that our associate, Siegfried, resolved all its problems with the Federal Drug Administration in America in June and that its Swiss operations are experiencing buoyant trading conditions.' India Crop from the Group tea gardens in North India is currently 12% ahead of the previous year. However, prices are very disappointing, particularly for Dooars and Darjeeling teas. The downtrend in prices continues from last year and is largely due to a slackening of domestic demand. Sales of packet teas have also declined. The situation with regard to the export of instant tea remains unsatisfactory. Costs overall continue to be well controlled. The labour situation in the gardens has deteriorated after the elections recently held in the states of Assam and West Bengal, and further disruption cannot be ruled out. Bangladesh Crops from the Longbourne tea gardens are almost 12% ahead of the previous year and if weather conditions remain favourable this trend is likely to continue. Prices are also ahead of 2000 but recently the market has weakened. Rubber production continues to increase in line with budget and prices have been satisfactory. United Leasing Company Limited's mid year pre-tax profit is 31% higher than last year and the full year is expected to be satisfactory. United Insurance Company Limited has reported increased premium income. Currently the country is being run by a caretaker government prior to a General Election in early October. Other United Kingdom operations Duncan Lawrie, our private bank, experienced mixed results. The banking operations performed to expectations but falling interest rates will make profits that much harder to achieve. The investment management business has suffered with the decline in equity markets and the current state of flux in these markets makes the immediate outlook uncertain. WDG Properties Limited has completed the current round of rent reviews at satisfactory levels. The fine art market has not been as buoyant as last year and the results of Lumley Cazalet are accordingly reduced from the very satisfactory levels of last year. Further disposals have been made by JPL Fine Arts Limited to the extent that this operation is no longer material in Group terms. Prospects Tea prices remain disappointing although crops in most parts of the Group are satisfactory. Large amounts of production have still to be sold thus making it impossible to predict the outcome for the year as a whole with any degree of certainty. Directors I am privileged to have been asked to assume the mantle of Chairman of this very fine company and I trust I shall do justice to the confidence placed in me by the board. This is my first statement to shareholders and I would not like the opportunity to pass without paying tribute to the enormous contribution made to the Group by my predecessor Keith FitzGerald, recently appointed to the position of Chairman Emeritus, and also by Nick Grant who chaired Duncan Lawrie Limited. Both these gentlemen retired from the board on 31st May and I wish them well for the future. M.C. PERKINS 27th September 2001 Chairman Consolidated Profit and Loss Account for the six months ended 30th June 2001 Six Six months months Year ended ended ended 30th 30th 31st June June December 2001 2000 2000 Notes £'000 £'000 £'000 Turnover - continuing operations 83,231 79,570 173,450 acquisitions 2,366 - - discontinued operations 23,174 39,751 79,925 1 108,771 119,321 253,375 Operating profit - continuing operations 2 2,518 2,664 16,671 acquisitions (58) - - discontinued operations 248 214 296 2,708 2,878 16,967 Share of results of associates 3 1,622 2,959 2,996 1 4,330 5,837 19,963 Investment income 659 474 1,087 Profit on disposal of fixed asset 716 345 376 investments Profit on disposal of subsidiary 4 1,128 - - undertaking Share of associates' profit on disposal of 1,800 - - subsidiary Profit on disposal of fixed assets 4 - - 1,164 Loss on disposal of associated undertaking 4 - - (1,701) 8,633 6,656 20,889 Net interest payable and similar charges 5 2,549 2,942 5,675 Profit on ordinary activities before 6,084 3,714 15,214 taxation Taxation on profit on ordinary activities 6 4,094 2,332 5,722 Profit on ordinary activities after 1,990 1,382 9,492 taxation Interest of minority shareholders 837 838 2,538 Attributable profit for the period 1,153 544 6,954 Dividends 7 544 560 2,335 Earnings per share 8 42.18p 19.31p 247.71p Consolidated Balance Sheet at 30th June 2001 30th June 30th June 31st December 2001 2000 2000 £'000 £'000 £'000 Fixed assets Tangible assets 247,635 241,552 232,888 Goodwill (2,781) (1,253) (1,239) 244,854 240,299 231,649 Current assets Stocks 36,161 30,970 32,319 Debtors 62,609 66,742 66,244 Investments 73 50 47 Cash at banks and in hand (note 9) 165,487 140,234 162,052 264,330 237,996 260,662 Creditors: amounts falling due within one (220,117) (208,772) (222,444) year Net Current Assets 44,213 29,224 38,218 Total assets less current liabilities 289,067 269,523 269,867 Creditors: amounts falling due after more than one year (41,622) (39,748) (36,513) Provisions for liabilities and charges (1,714) (1,433) (1,734) 245,731 228,342 231,620 Capital and reserves Called up share capital 272 281 277 Reserves 179,254 174,243 176,814 Equity shareholders' funds 179,526 174,524 177,091 Minority shareholders' interest 66,205 53,818 54,529 245,731 228,342 231,620 Consolidated Cash Flow Statement for the six months ended 30th June 2001 Six months Six months Year ended ended ended 30th June 30th June 31st December 2001 2000 2000 Notes £'000 £'000 £'000 Net cash flow from operating 10 6,388 5,547 22,346 activities Dividends received from associates 546 855 869 Returns on investments and servicing of finance (2,029) (2,443) (6,204) Taxation paid (1,964) (2,695) (4,910) Capital expenditure and financial investment (6,636) (5,341) (9,319) Acquisitions and disposals 1,056 (380) 5,049 Equity dividends paid - - (2,237) Cash (outflow)/inflow before (2,639) (4,457) 5,594 financing Financing New loans 8,256 7,326 5,081 Loan and finance lease payments (3,616) (4,138) (7,421) Purchase of own shares (1,817) (507) (1,244) Increase/(decrease) in cash in the 11 184 (1,776) 2,010 period Statement of Total Recognised Gains and Losses for the six months ended 30th June 2001 Six months Six months Year ended ended ended 30th June 30th June 31st December 2001 2000 2000 £'000 £'000 £'000 Attributable profit for the period 1,153 544 6,954 Exchange differences 3,525 4,815 3,791 Total recognised gains for the period 4,678 5,359 10,745 Reconciliation of Movement in Shareholders' Funds for the six months ended 30th June 2001 Six months Six months Year ended ended ended 30th June 30th June 31st December 2001 2000 2000 £'000 £'000 £'000 Attributable profit for the period 1,153 544 6,954 Dividends (544) (560) (2,335) Exchange differences 3,525 4,815 3,791 Purchase of own shares (1,510) (507) (1,551) Goodwill transferred to profit for the (189) - - year Net addition in shareholders' funds 2,435 4,292 6,859 Opening shareholders' funds 177,091 170,232 170,232 Closing shareholders' funds 179,526 174,524 177,091 Notes to the Accounts 1 Segmental analysis of turnover and operating profit Six months Six months Six months ended ended ended 30th June 30th June 31st December 2001 2000 2000 £'000 £'000 £'000 Turnover By activity Agriculture and horticulture 49,495 43,369 101,654 Trading and agency 3,368 3,222 6,128 Food storage and distribution 22,559 22,570 46,723 Engineering 7,583 6,424 12,175 Fine art trading and philately 1,461 2,949 4,784 Property leasing 1,084 999 1,959 Central management and miscellaneous 47 37 27 85,597 79,570 173,450 Discontinued - Trading and agency 23,174 39,751 79,925 108,771 119,321 253,375 By country of origin United Kingdom 30,283 30,773 60,154 Continental Europe 5,368 4,953 10,800 India 11,956 11,179 35,401 Kenya 13,148 10,975 22,702 Malawi 8,452 7,148 11,702 Bangladesh 3,344 3,395 8,230 North America 162 248 1,430 South America and Bermuda 1,545 1,147 1,613 Australia 7,518 8,120 19,907 South Africa 3,821 1,632 1,511 85,597 79,570 173,450 Discontinued - United Kingdom 23,174 39,751 79,925 108,771 119,321 253,375 Six months Six months Year ended ended ended 30th June 30th June 31st December 2001 2000 2000 £'000 £'000 £'000 Operating Profit By activity Agriculture and horticulture 629 (768) 10,377 Trading and agency 830 609 514 Food storage and distribution 1,822 2,157 4,513 Engineering 1,214 433 1,095 Fine art trading and philately 311 1,519 2,299 Property leasing 1,018 890 1,869 Central management and miscellaneous (3,482) (3,031) (5,032) 2,342 1,809 15,635 Discontinued - Trading and agency 248 214 296 2,590 2,023 15,931 Banking 118 856 1,026 Net interest from group companies - (1) 10 2,708 2,878 16,967 Associated undertakings Agriculture and horticulture (91) (113) 13 Insurance and leasing 525 411 987 Chemical and pharmaceutical 1,188 2,568 1,903 Textile and other manufacturing - 93 93 4,330 5,837 19,963 By country of origin United Kingdom 1,923 3,523 6,318 Continental Europe 108 65 301 India (3,704) (4,174) 1,559 Kenya 1,985 1,824 3,788 Malawi 3,063 2,653 2,903 Bangladesh (919) (1,061) 981 North America (60) 31 474 South America and Bermuda (187) (540) (977) Australia 269 127 1,172 South Africa (18) 216 152 2,460 2,664 16,671 Discontinued - United Kingdom 248 214 296 2,708 2,878 16,967 Acquisitions were, by segmental activity - agriculture and horticulture and by country of origin - South Africa. 2. Business interruption insurance proceeds of £910,000 (2000 six months: nil - year: £1,875,000) have been credited to operating profit. 3 Share of associates' results includes an impairment provision of £1,060,000 (2000 : nil). 4. Profit on disposal of subsidiary undertaking comprises: £'000 £'000 Profit on disposal of subsidiary 802 Negative goodwill transferred from reserves 189 Negative goodwill transferred from fixed assets 137 326 1,128 Profit on disposal of subsidiaries comprises a profit on disposal of Highland Fuels Limited of £802,000. Attributable goodwill of £378,000 has been set off against £704,000 of negative goodwill which is attributable to the disposal of 30 per cent of Eastern Produce Malawi Limited, leaving a net negative figure of £326,000. Profit on disposal of fixed assets in the year ended 31st December 2000 includes £1,344,000 relating to assets destroyed by fire. Loss on disposal of associated undertaking in the year ended 31st December 2000 was on disposal of the Group's entire holding in British Mohair Holdings Plc. 5. Net interest payable includes £359,000 (2000 six months: £324,000 - year: £ 535,000) in respect of the Group's share of associated undertakings' net interest. 6 Taxation includes overseas taxation of £2,076,000 (2000 six months: £1,410,000 - year: £3,725,000) and share of associated undertakings' taxation charge of £1,545,000 (2000 six months: £205,000 - year: £ 816,000). Effective tax rates at the half-year are high due to losses recorded in overseas companies for which no offset can be recognised. 7. Dividends Six months Six months Year ended ended ended 30th June 30th June 31st December 2001 2000 2000 £'000 £'000 £'000 Interim of 20p per share (2000: 20p) 544 560 560 Final for 2000 of 64p per share - - 1,775 544 560 2,335 8. The calculation of earnings per share is based on attributable profit divided by the weighted average of ordinary shares in issue which was 2,733,257 (2000 six months: 2,817,611 - year: 2,807,325). 9. Included in cash at banks and in hand of £165,487,000 (2000 six months: £ 140,234,000 - year: £162,052,000) are cash and short-term funds, time deposits with banks and building societies and certificates of deposit amounting to £147,321,000 (2000 six months: £132,504,000 - year: £ 141,523,000), which are held by banking subsidiaries and which are an integral part of the banking operations of the Group. 10 Reconciliation of operating profit to net cash flow from operating activities Year Six months Six months ended ended ended 31st 30th June 30th June December 2001 2000 2000 £'000 £'000 £'000 Operating profit 2,708 2,878 16,967 Depreciation 4,486 4,410 8,490 Amortisation of goodwill (55) (36) (72) Profit on sale of fixed assets (102) (251) (134) Decrease in working capital 4,766 3,542 10,941 Net increase in funds of banking subsidiaries (5,798) (5,027) (14,046) Currency adjustment 383 31 200 Net cash flow from operating activities 6,388 5,547 22,346 11 Reconciliation of net cash flow to movements in net debt Year Six months Six months ended ended ended 31st 30th June 30th June December 2001 2000 2000 £'000 £'000 £'000 Increase/(decrease) in cash in the period 184 (1,776) 2,010 Cash inflow from changes in debt and financing (4,640) (3,188) 2,340 Change in net debt resulting from cash (4,456) (4,964) 4,350 flows Businesses acquired and sold (385) - - Translation differences 188 (389) 213 Change in net debt in the period (4,653) (5,353) 4,563 Net debt at beginning of period (47,428) (51,991) (51,991) Net debt at end of period (52,081) (57,344) (47,428) 12. The accounts to 30th June 2001 have been prepared on the basis of the accounting policies set out in the financial statements for the year ended 31st December 2000. The six months figures are unaudited and have not been reviewed by the company's auditors. The figures for the year ended 31st December 2000 are an abridged statement from the Group's accounts which have been delivered to the Registrar of Companies. The Auditor's Report on these accounts was unqualified. The Interim Report will be posted to shareholders on 28th September 2001 on which date copies can be obtained from the company's Registrars:- Capita IRG Plc, Balfour House, 390/398 High Road, Ilford, Essex IG1 1NQ or from the company's registered office:- Wrotham Place, Wrotham, Sevenoaks, Kent TN15 7AE Press enquires to: Mr. M.C. Perkins Telephone No. 01622 746655 P.E. Hill Company Secretary

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