LONDON (ShareCast) - (Sharecast News) - Agricultural and food company Camellia reported on an "exceptionally challenging" first half on Friday, with its revenue slipping to £114.9m from £117.3m year-on-year.
The AIM-traded firm said its underlying loss before tax for the six months ended 30 June came in at £6m, widening from £4.1m.

After exceptional items, the company swung to a loss after tax of £12.1m, from a profit of £3.6m in the first half of 2019.

Losses per share totalled 465.2p, compared to earnings of 50.7p a year earlier, while net cash and equivalents net of borrowings slid to £72.8m at period end, from £80.6m.

The dividend per share for the period was 102p, consisting of a special dividend as the interim dividend was deferred, compared to an interim dividend of 42p for the first half of 2019.

On the strategic front, Camellia said its "sustained" focus on production efficiencies and expense management had helped contain costs during the period.

It said the sale of the Horizon Farm property, subject to conditions precedent, for a gross cash consideration of $31m, was expected to complete during the fourth quarter.

The estimated pre-tax gain on sale of $18.3m would be reflected in the 2020 full-year results.

Further progress was also reported on geographic and crop diversification, and to secure water resources, to mitigate climate impacts and the firm's exposure to the tea price.

"As anticipated, the first half of 2020 has been exceptionally challenging operationally," said chairman Malcolm Perkins.

"Oversupply of tea in Kenya and disruption due to Covid-19 has impacted prices and hence the profitability of our tea operations.

"The pandemic has also had a direct impact on our engineering and food services businesses in the UK."

Notwithstanding those challenges, Perkins said the company made "good strategic progress" with plans for its first significant investment in Tanzania advancing, and the disposal of the Horizon Farm property, as announced in August.

"The group is set up in a way that reflects our long-term approach, with financial stability and sustainability being at the heart of our philosophy.

"We remain financially strong, with significant net cash, and have the resources to withstand both the current trading environment and a period of disruption from Covid-19, whilst continuing to invest for the future.

"I am therefore pleased to confirm a special dividend of 102p per share, equivalent to the 2019 postponed dividend."

Given the continuing uncertainty, Perkins said dividends for 2020 would be considered when the year completes.

At 0820 BST, shares in Camellia were down 2.9% at 6,700p.

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