Interim Results

Camellia PLC 23 September 2004 Camellia public limited company INTERIM REPORT 2004 Chairman's Statement The pre-tax loss of Â£1,295,000 for the six months to the 30th June 2004 compares with a profit of Â£2,169,000 for the same period last year. The Board has declared an interim dividend of 20p per ordinary share payable on 8th November 2004 to shareholders on the register on 15th October 2004. Tea India Crops are about 20 per cent. behind last year but prices show an improvement. We continue to concentrate on improving the quality of our teas and this has contributed to higher prices being achieved. The instant tea plant is continuing to receive good orders and capacity has been increased. Bangladesh Both crops and prices are lower than last year. Recent serious flooding in Bangladesh has not had a major impact on our operations. We are also striving to improve the quality of our teas. Africa Tea production has been satisfactory and prices have improved when compared to the previous year. This has resulted in acceptable profits in both Kenya and Malawi. However, as forewarned in my statement accompanying the accounts for 2003 and also in my statement to the AGM in May this year, we have been required to give serious consideration to the future of our tea operations in South Africa. The impact of the strong rand, the imposition of a comparatively high minimum wage and the abolition of duty protection against tea imports have resulted in a situation whereby our tea operations in South Africa are no longer viable. We are, however, still in discussions with the South African government concerning the future of the tea industry in South Africa but your directors feel it is prudent to provide for an impairment charge of Â£2.3 million in relation to the fixed assets associated with the Group's tea operations in South Africa which has been partially offset by an associated goodwill write back of Â£1.6m. Citrus Dry conditions have prevailed again in Australia and water restrictions have been reimposed. Whilst production has been somewhat disappointing prices have been reasonable and Australian competitiveness in the American market has improved with the decline in the Australian dollar. The citrus operations in California, Chile and South Africa are performing to expectation. Edible nuts We anticipate a good year in respect of our Californian pistachio operation and the production and price of macadamia in Malawi is most encouraging. Our South African macadamia production is reduced because of dry weather and profitability will be lower due to the strong rand. Other horticulture Table grape production in South Africa was very satisfactory but here again the strong rand has impacted on profitability. Our operations in Chile enjoyed good grape production and satisfactory prices. Wine grape production was satisfactory in Australia, South Africa and Chile although the wine market continues to be over supplied and prices are much reduced. In Brazil our operations again benefited from good production and a high export price for soya. Rubber production in Bangladesh is increasing as the trees mature. Prices remain satisfactory. Food storage and distribution Associated Cold Stores & Transport continues to suffer from reduced margins prevalent throughout the cold storage and distribution industry. We continue to work towards a substantially reduced cost base but influences outside of our control make a return to meaningful profits hard to achieve. Engineering Our engineering companies experienced continuing difficult conditions in the first six months of the year, particularly at AKD in Lowestoft. There are, however, some indications that we will benefit from increased activity in the aerospace and North Sea oil exploration sectors. Banking Duncan Lawrie has made an encouraging start to the year with profits well in excess of the comparable period last year. We continue to make investments to improve the quality of the service offered to our clientele. Pharmaceutical Siegfried's operating profit for the six months is approximately half of that for the first six months of 2003. Siegfried has made provision for a further substantial reduction in costs on account of continuining over capacity in the active pharmaceutical ingredients market and expects lower revenues and operating profits for the second half of 2004. A return to growth is, however, expected by the second half of 2005. Other associated undertakings The Group's share of the profits of the United Leasing Company Limited and the United Insurance Company Limited in Bangladesh showed a reduction in the first half of the year. Part disposal of the interest in United Leasing is the principal cause of this reduction. Prospects Generally the fortunes of the Group show signs of improving over the next few months but current results are being influenced by the situation in South Africa, the disappointing results at Associated Cold Stores & Transport and the reduction in profitability from Siegfried. It is difficult to make any prediction as to the outcome for the full year. M C Perkins Linton Park Chairman Linton Near Maidstone 23rd September 2004 Kent ME17 4AB Consolidated Profit and Loss Account for the six months ended 30th June 2004 Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Notes Â£'000 Â£'000 Â£'000 Turnover - continuing operations 73,634 78,772 170,758 - discontinued operations 157 1,730 3,927 --------- --------- --------- 1 73,791 80,502 174,685 ========= ========= ========= Operating (loss)/profit - continuing operations (4,452) (3,198) (1,105) - discontinued operations 2 (832) (1,604) --------- --------- --------- 2 (4,450) (4,030) (2,709) Share of associates'results before interest 3,143 6,692 10,278 --------- --------- --------- 1 (1,307) 2,662 7,569 Investment income 876 713 1,255 Profit on disposal of fixed assets 3 61 325 21,799 Profit on disposal of fixed asset investments 681 558 668 Profit on disposal of associate undertakings 4 38 - - Profit on disposal of a subsidiary and a business 5 - 98 302 Provision for loss on disposal of a business 6 - - (237) --------- --------- --------- Profit on ordinary activities before interest 349 4,356 31,356 Net finance costs 7 1,644 2,187 3,834 --------- --------- --------- (Loss)/profit on ordinary activities before taxation (1,295) 2,169 27,522 Taxation on profit on ordinary activities 8 310 1,292 1,192 --------- --------- --------- (Loss)/profit on ordinary activities after taxation (1,605) 877 26,330 Minority interests (527) 154 348 --------- --------- --------- Attributable (loss)/profit for the period (1,078) 723 25,982 ========== ========= ========= Dividends 9 519 519 2,258 Earnings per share 10 (41.54)p 27.75p 999.18p Consolidated Balance Sheet at 30th June 2004 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Fixed assets Intangible assets Goodwill Positive 1,062 1,218 1,157 Negative (2,412) (3,422) (3,038) --------- --------- --------- (1,350) (2,204) (1,881) Tangible assets 149,324 168,841 155,946 Investments 81,928 81,457 83,965 --------- --------- --------- 229,902 248,094 238,030 --------- --------- --------- Current Assets Stocks 24,426 28,894 25,053 Debtors 51,989 60,645 47,412 Cash at banks and in hand(note 11) 157,385 162,352 162,657 --------- --------- --------- 233,800 251,891 235,122 Creditors: amounts falling due within one year (203,149) (224,423) (198,964) --------- --------- --------- Net current assets 30,651 27,468 36,158 --------- --------- --------- Total assets less current liabilities 260,553 275,562 274,188 Creditors: amounts falling due after more than one year (24,917) (38,428) (27,970) Provisions for liabilities and charges (3,116) (6,070) (4,158) --------- --------- --------- 232,520 231,064 242,060 ========= ========= ========= Capital and reserves Called up share capital 260 260 260 Reserves 181,080 170,439 186,222 --------- --------- --------- Equity shareholders'funds 181,340 170,699 186,482 Minority shareholders'interest 51,180 60,365 55,578 --------- --------- --------- 232,520 231,064 242,060 ========= ========= ========= Consolidated Cash Flow Statement for the six months ended 30th June 2004 Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Notes Â£'000 Â£'000 Â£'000 Net cash flow from operating activities 12 30 1,372 5,419 Dividends received from associates 2,202 2,114 2,371 Returns on investments and servicing of finance (1,237) (1,951) (4,526) Taxation paid (215) (645) (2,197) Capital expenditure and financial investment (2,439) (3,569) 14,397 Acquisitions and disposals 62 971 1,553 Equity dividends paid - - (2,261) --------- --------- --------- Cash (outflow)/inflow before financing ( 1,597) (1,708) 14,756 Financing New loans 2,810 4,916 4,107 Loan and finance lease payments (2,751) (3,917) (15,127) Purchase of own shares (16) (1,259) (1,229) --------- --------- --------- (Decrease)/increase in cash in the period 13 (1,554) (1,968) 2,507 ========= ========= ========= Statement of Total Recognised Gains and Losses for the six months ended 30th June 2004 Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Attributable (loss)/profit for the period (1,078) 723 25,982 Impairments of previously revalued fixed assets - - (1,112) Release of negative goodwill on impairment of fixed assets - - (462) Release of negative goodwill on disposal of a business - - (308) Exchange differences (3,529) 1,355 (4,530) --------- --------- --------- Total recognised gains and losses for the period (4,607) 2,078 19,570 ========= ========= ========= Reconciliation of Movement in Shareholders'Funds for the six months ended 30th June 2004 Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Attributable (loss)/profit for the period (1,078) 723 25,982 Dividends (519) (519) (2,258) Exchange differences (3,529) 1,355 (4,530) Purchase of own shares (16) (1,259) (1,229) Impairments of previously revalued fixed assets - - (1,112) Release of negative goodwill on impairment of fixed assets - - (462) Release of negative goodwill on disposal of a business - - (308) --------- --------- --------- Net movement to shareholders' funds (5,142) 300 16,083 Opening equity shareholders' funds 186,482 170,399 170,399 --------- --------- --------- Closing equity shareholders' funds 181,340 170,699 186,482 ========= ========= ========= Notes to the Accounts 1 Segmental analysis of turnover and operating (loss)/profit Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Turnover By activity Agriculture and horticulture 46,880 50,352 110,962 Trading and agency 416 205 1,208 Food storage and distribution 20,059 19,337 40,826 Engineering 6,172 7,899 15,802 Property leasing 107 979 1,960 --------- --------- --------- 73,634 78,772 170,758 Discontinued Agriculture and horticulture - 615 1,366 Food storage and distribution 157 1,115 2,561 --------- --------- --------- 73,791 80,502 174,685 ========= ========= ========= By country of origin United Kingdom 21,844 23,382 48,799 Continental Europe 4,576 4,797 10,417 India 9,332 12,110 32,732 Kenya 10,464 9,210 19,925 Malawi 7,536 7,291 10,032 Bangladesh 2,988 3,104 7,875 North America 188 244 314 South America and Bermuda 2,706 1,750 24,558 Australia 6,915 9,399 13,718 South Africa 7,085 7,485 2,388 --------- --------- --------- 73,634 78,772 170,758 Discontinued United Kingdom 157 1,115 2,561 Kenya - 615 1,366 --------- --------- --------- 73,791 80,502 174,685 ========= ========= ========= Notes to the Accounts 1 Segmental analysis of turnover and operating (loss)/profit (continued) Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Operating (loss)/profit By activity Agriculture and horticulture (1,023) (2,153) 5,511 Trading and agency 745 724 565 Food storage and distribution (167) (51) (340) Engineering (893) 453 5 Philately (31) (19) (47) Property leasing 95 951 1,900 --------- --------- --------- (1,274) (95) 7,594 Discontinued Agriculture and horticulture - (442) (1,047) Food storage and distribution 2 (390) (557) --------- --------- --------- (1,272) (927) 5,990 Impairment of assets Agriculture and horticulture (709) - (2,962) Engineering - - (342) --------- --------- --------- (1,981) (927) 2,686 Banking 448 187 402 Net interest from group companies 174 3 5 --------- --------- --------- (1,359) (737) 3,093 Net unallocated expenses (3,091) (3,293) (5,802) --------- --------- --------- Operating loss (4,450) (4,030) (2,709) Associated undertakings Agriculture and horticulture (85) (85) 12 Pharmaceutical 2,789 6,242 9,099 Insurance and leasing 439 535 1,167 --------- --------- --------- (1,307) 2,662 7,569 ========= ========= ========= Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Operating (loss)/profit By country of origin United Kingdom 395 2,432 2,335 Continental Europe (50) (2) 194 India (3,836) (3,234) (11) Kenya 1,087 556 3,224 Malawi 2,672 2,384 2,057 Bangladesh (444) (272) 1,436 North America 65 (36) (238) South America and Bermuda 786 447 501 Australia (973) (589) 1,132 South Africa (354) (1,591) (2,629) --------- --------- --------- (652) 95 8,001 Discontinued United Kingdom 2 (390) (557) Kenya - (442) (1,047) --------- --------- --------- (650) (737) 6,397 Impairment of assets United Kingdom - - (240) Kenya - - (1,065) India - - (1,897) Bangladesh - - (102) South Africa (709) - - --------- --------- --------- (1,359) (737) 3,093 ========= ========= ========= 2 Included in operating profit is an impairment charge of Â£2,328,000 in relation to the fixed assets associated with the Group's tea operations in South Africa. The impairment charge has been partially offset by a Â£1,619,000 write back of negative goodwill relating to these operations, giving a net charge of Â£709,000. For the year to 31st December 2003 there was an impairment provision relating to various Group assets of Â£3,304,000 (2003: six months Â£nil). 3 Profit on disposal of fixed assets Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Profit on disposal of Banbury warehouse - - 21,201 Profit on disposal of other land and property 61 325 598 --------- --------- --------- 61 325 21,799 --------- --------- --------- 4 Profit on disposal of associate undertakings In the six months to 30th June 2004, the Group realised a profit of Â£11,000 on the part disposal of its associate interest in United Leasing Company Limited, reducing its shareholding to 42.78% at 30th June 2004. In addition, the Group realised a profit of Â£27,000 on the disposal of its associate interest in Gorkha Lawrie Private Limited. 5 Profit on disposal of a subsidiary and a business Profit on disposal of a subsidiary and a business in 2003 relates to British Traders & Shippers Limited and SWF Citrus Inc. respectively. 6 Provision for loss on disposal of a business The provision of Â£237,000 for the year ended 31st December 2003 relates to the sale of the business of W.G. White Limited on 5th February 2004. 7 Net interest payable includes Â£239,000 (2003 six months: Â£273,000 - year: Â£551,000) in respect of the Group's share of associated undertakings' net interest. 8 Taxation includes overseas taxation of Â£262,000 (2003 six months: Â£275,000 - year: Â£2,346,000) and share of associated undertakings' taxation charge of Â£523,000 (2003 six months: Â£1,682,000 - year: Â£1,439,000). 9 Dividends Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Interim of 20p per share(2003: 20p) 519 519 519 Final for 2003 of 67p per share - - 1,739 --------- --------- --------- 519 519 2,258 ========= ========= ========= 10 The calculation of earnings per share is based on attributable (loss)/ profit divided by the weighted average number of ordinary shares in issue which was 2,595,309 (2003 six months: 2,605,450 - year: 2,600,345). 11 Included in cash at banks and in hand of Â£157,385,000 (2003 six months: Â£162,352,000 - year: Â£162,657,000) are cash and short-term funds, time deposits with banks and building societies and certificates of deposit amounting to Â£147,404,000 (2003 six month: Â£153,637,000 - year: Â£151,638,000), which are held by banking subsidiaries and which are an integral part of the banking operations of the Group. 12 Reconciliation of operating (loss)/profit to net cash flow from operating activities Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 Operating loss (4,450) (4,030) (2,709) Depreciation 4,275 4,346 8,735 Asset impairment 2,328 - 3,304 Release of negative goodwill (1,619) - - Amortisation of goodwill (192) (179) (351) (Profit)/loss on sale of fixed assets (67) (93) 367 (Increase)/decrease in working capital (457) 10,526 3,556 Net decrease/(increase) in funds of banking subsidiaries 212 (9,198) (7,483) --------- -------- -------- Net cash flow from operating activities 30 1,372 5,419 ========= ======== ======== 13 Reconciliation of net cash flow to movements in net debt Six months Six months Year ended ended ended 30th June 30th June 31st December 2004 2003 2003 Â£'000 Â£'000 Â£'000 (Decrease)/increase in cash in the period (1,554) (1,968) 2,507 Cash (inflow)/outflow from changes in debt and financing (58) (999) 10,454 --------- -------- -------- Change in net debt resulting from cash flows (1,612) (2,967) 12,961 Businesses sold - 136 136 Translation differences 647 (923) 560 --------- -------- -------- (Increase)/decrease in net debt in the period (965) (3,754) 13,657 Net debt at beginning of period (43,760) (57,417) (57,417) --------- -------- -------- Net debt at end of period (44,725) (61,171) (43,760) ========= ======== ======== 14 The accounts to 30th June 2004 have been prepared on the basis of the accounting policies set out in the financial statements for the year ended 31st December 2003. The six months figures are unaudited and have not been reviewed by the company's auditors. The figures for the year ended 31st December 2003 are an abridged statement from the Group's accounts at that date which have been delivered to the Registrar of Companies. The Auditors' Report on these accounts was unqualified. This information is provided by RNS The company news service from the London Stock Exchange

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