Provision releases keep Camellia in the green at half-year
By Josh White
Date: Thursday 15 Aug 2019
(Sharecast News) - Camellia reported a fall in revenue in its interim results on Thursday, to £117.3m from £127.6m year-on-year, which the company said reflected an oversupply of tea in the market and consequential weak prices.
The AIM-traded firm swung to an underlying loss before tax of £4.1m in the six months ended 30 June, from a profit of £6.1m a year earlier, although thanks to £8m of provision releases it still made a profit for the period of £3.6m, down marginally from the £3.7m it reported at the 2018 interims.
It saw "significant" earnings per share growth, to 50.7p from 18.1p, whoch the board said reflected the derivation of profits, and added that its financial position remained "very strong", with cash and cash equivalents net of loans standing at £80.6m, compared to £80.6m 12 months earlier.
The board recommended an interim dividend of 42p per share, up 5% on the 40p it paid at the 2018 half-year.
On the strategic front, Camellia said it had made "good" progress with its initiatives in agriculture, following the completion of the Assam garden acquisitions, and an agreement to acquire additional land in South Africa.
"The oversupply of tea at the end of 2018 has had a direct impact on global tea prices and hence on the revenues and profitability of our tea operations in the first half," said chairman Malcolm Perkins.
"Our increasing agricultural diversity has however helped to temper the impact of the tea market on our results and I am pleased that we are able to increase the interim dividend.
"The in principle agreement and today's payment of wages in Kenya and India relating back to 2014 has allowed us to release the excess of the associated provisions, resulting in a profit for the period broadly in line with the comparable period of 2018."
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