REG - Camellia PLC - Half-year Report
06/09/2024 07:00
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RNS Number : 1352D Camellia PLC 06 September 2024
CAMELLIA PLC
Interim results for the 6 months ended 30 June 2024
CEO's Statement
The challenging trading conditions experienced in 2023 eased slightly in the
first half of 2024 but remain difficult across our primary markets. Revenue
from continuing operations increased 7% to £105.1 million (2023 H1: £98.0
million) with improvements in both agriculture and engineering. As a result,
the trading loss from continuing operations for the first half was reduced to
£9.7 million (H1 2023: £15.1 million). The principle contributing factors
have been:
§ Higher overall tea volumes partially offset by lower prices
§ Lower macadamia volumes offset by improved prices
§ Lower soya volumes and prices
§ Lower avocado production substantially offset by higher prices
§ Higher revenue in Engineering
§ Lower year to date management costs
We are reporting a first half loss after tax of £14.0 million (2023 H1:
profit of £3.5 million). While 2024 has seen a modest improvement in
operating performance over H1 2023 overall results are down year on year as
last year's results benefited from an impairment write back of £18 million
due to the agreement to sell BF&M. In addition, H1 2024 saw a rise in
financing costs to £4.1 million primarily resulting from exchange losses from
the strengthening of the Kenyan Shilling. Bardsley has been categorised as a
discontinued operation and is now shown separately in the results. Further
details of the first half performance are set out in the operating review.
The Board has resolved not to pay an interim dividend for the first half due
to the continuing operating losses.
The Board continues to encourage Group companies' efforts to sustain, expand
and where appropriate diversify their agricultural operations. The Board's
goal is to support the Group companies' strategies to make the best use of
their assets, improve their operating margins, and mitigate the impacts of
adverse weather, political instability, and commodity price movements. We look
to utilise our core competence in developing and managing agricultural
businesses, and we continue our work to exit non-core assets.
We thank all employees across the Group for their continued hard work and
diligence during the period.
Financial Highlights
Six months ended Six months Year ended
30 June 2024 ended 31 December 2023
30 June 2023
£'m £'m £'m
Restated Restated
Revenue - continuing operations 105.1 98.0 254.2
Adjusted loss before tax - continuing operations* (11.6) (9.2) (3.8)
Significant separately disclosed items and provision releases 0.6 18.1 22.0
(Loss)/profit before tax for the period (11.0) 8.9 18.2
(Loss)/profit after tax for the period - continuing operations (13.1) 7.4 13.0
Loss for the period - discontinued operations (0.9) (3.9) (14.4)
(Loss)/profit after tax (14.0) 3.5 (1.4)
(Loss)/earnings per share - continuing operations (459.8)p 253.4p 387.4p
Dividend per share for the period - 44p 44p
Net cash and cash equivalents net of borrowings 24.1 35.0 33.9
Investment portfolio market value 37.6 37.7 38.1
* Loss before tax excluding separately disclosed significant items, details of
which can be found in note 6 to the Accounts later in this announcement
This announcement contains inside information for the purpose of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018.
ENQUIRIES
Camellia
Plc
01622 746655
Byron Coombs Chief Executive Officer
Oliver Capon, Chief Financial Officer
Panmure Liberum
020 7886 2500
Nominated Adviser and Broker
Emma Earl
Rupert Dearden
H/Advisers Maitland
PR
William
Clutterbuck
07785 292617
CEO'S STATEMENT AND OPERATING REVIEW
CEO'S STATEMENT
The challenging trading conditions experienced in 2023 eased slightly in the
first half of 2024 but remain difficult across our primary markets. Revenue
from continuing operations increased 7% to £105.1 million (2023 H1:
£98.0 million) with improvements in both agriculture and engineering. As a
result, the trading loss from continuing operations for the first half was
reduced to £9.7 million (H1 2023: £15.1 million). The principle contributing
factors have been:
§ Higher overall tea volumes partially offset by lower prices
§ Lower macadamia volumes offset by improved prices
§ Lower soya volumes and prices
§ Lower avocado production substantially offset by higher prices
§ Higher revenue in Engineering
§ Lower year to date management costs
We are reporting a first half loss after tax of £14.0 million (2023 H1:
profit of £3.5 million). While 2024 has seen a modest improvement in
operating performance over H1 2023 overall results are down year on year as
last year's results benefited from an impairment write back of £18 million
due to the agreement to sell BF&M. In addition, H1 2024 saw a rise in
financing costs to £4.1 million primarily resulting from exchange losses from
the strengthening of the Kenyan Shilling. Bardsley has been categorised as a
discontinued operation and is now shown separately in the results. Further
details of the first half performance are set out in the operating review.
The Board has resolved not to pay an interim dividend for the first half due
to the continuing operating losses.
The Board continues to encourage Group companies' efforts to sustain, expand
and where appropriate diversify their agricultural operations. The Board's
goal is to support the Group companies' strategies to make the best use of
their assets, improve their operating margins, and mitigate the impacts of
adverse weather, political instability, and commodity price movements. We look
to utilise our core competence in developing and managing agricultural
businesses, and we continue our work to exit non-core assets.
We thank all employees across the Group for their continued hard work and
diligence during the period.
Byron Coombs
CEO
OPERATING REVIEW
Agriculture
H1 2024 H1 2023 Full year 2023
Revenue £'m £'m £'m
Tea 79.0 76.0 186.3
Nuts and fruits 6.7 4.1 34.4
Other agriculture 8.4 10.3 16.8
94.1 90.4 237.5
Trading (loss)/profit
Tea (9.7 ) (11.2 ) (2.4 )
Nuts and fruits 3.2 1.0 1.6
Other agriculture 0.7 0.3 0.5
(5.8 ) (9.9 ) (0.3 )
See note 5 of the Accounts for further segmental information.
Tea
Tea estate production & Instant tea, branded tea &
manufacturing
tea rooms
H1 H1 Full year H1 H1 Full year
2024 2023 2023 2024 2023 2023
£'m £'m £'m £'m £'m £'m
Revenue 62.7 61.3 154.9 16.3 14.7 31.4
Adjusted trading (loss)/profit* (9.8 ) (10.2 ) (3.2 ) 0.1 (1.0 ) (1.7 )
Trading (loss)/profit (9.8 ) (10.2 ) (0.7 ) 0.1 (1.0 ) (1.7 )
* See note 6 of the Accounts for details of the adjustments
made to trading (loss)/profit in arriving at adjusted trading (loss)/profit.
Tea estate production & manufacturing
Tea production was up 9% in the first half, at 45.2m kg (H1 2023: 41.4m kg).
Pricing has been mixed but generally down, depending on the country. Prices in
Kenya and Malawi have been weaker due to the continuing oversupply of Kenyan
CTC teas in the global export market. Bangladesh pricing also weakened due to
the over supplied internal market. Indian prices strengthened considerably for
all regions due to reduced overall volumes resulting from dry weather
conditions at the start of the new season.
H1 2024 H1 2023 Full year 2023
Volume Volume Volume
mkg mkg mkg
India 8.9 8.5 28.3
Bangladesh 4.0 3.4 15.2
Kenya 8.3 6.5 15.1
Malawi 13.3 12.3 17.5
Total own estates 34.5 30.7 76.1
Bought leaf production 8.2 8.7 17.6
Managed client production 2.5 2.0 4.9
Total made tea produced 45.2 41.4 98.6
India: Despite the challenging growing conditions production for the first
half of the year recovered and was slightly ahead of H1 2023 on the back of
late rains in North India.
Prices for new season CTC teas in both the Dooars and Assam have been higher
than in H1 2023. Orthodox Assam teas have also recovered with strong interest
from export and local markets. The domestic market pricing has strengthened,
with supply reduced by new and enhanced regulation on Maximum Residue Levels
(MRL) for domestically produced teas. During this period, the general election
in India took place with no impact to operations.
Good quality teas are currently being rewarded with higher prices in the
market. However, it is difficult to predict how prices will react through the
remainder of the year, with most production and sales occurring in the second
half.
Bangladesh: Production was up 17% on H1 2023 due to early rains. As with
India, most production will occur during the next six months. Average pricing
was down a disappointing 28% on H1 2023 due to large carryover stocks of old
season teas in the market. New season pricing, although improved, is still
subdued.
At the time of writing, there is ongoing political volatility in the country.
Fortunately, this has not affected the garden operations so far; tea movement
logistics and auctions have, however, been impacted.
Kenya: Tea volumes nationally are up 32% (to end-April) with three record
production months being achieved as a result of excellent growing conditions.
Our production mirrors this position, being up 28%. Due to the increased
market volumes, pricing is down 16% on H1 2023. There is a significant supply/
demand imbalance in the global export market with essentially an oversupply of
medium quality East African tea inflicting downward pressure on pricing. There
remain significant volumes of unsold tea in Mombasa which will continue to
depress prices.
Malawi: Our production is up 8% on H1 2023 with good growing conditions and
the rains season persisting for longer. Pricing has been adversely affected
by the excess production in East Africa, which presents significant
competition to Malawi's teas; as a result it is down 10% on H1 2023. Looking
forward, pricing is expected to remain subdued.
Instant tea, branded tea and tea rooms
India: Branded tea sales volumes are up 12% on H1 2023. Pricing has been under
pressure leading to a recent change to brand marketing strategy, the results
of which are anticipated to manifest later in the year. Instant tea production
and pricing are up on the same period as last year.
UK: Revenue at Jing Tea in H1 2024 is up 22% on the prior year reflecting new
wins and increased orders from existing customers as the hotels and leisure
markets edge closer to pre-pandemic activity levels. Margins, however, have
been adversely affected by inflation, particularly on packaging and logistics
costs with container shortages and the Red Sea re-route, resulting in overall
losses being higher than H1 2023.
Nuts and fruits
Macadamia Avocado Other fruits
H1 H1 Full year H1 H1 Full year H1 H1 Full year
2024 2023 2023 2024 2023 2023 2024 2023 2023
£'m £'m £'m £'m £'m £'m £'m £'m £'m
Revenue 5.0 2.1 11.6 1.4 1.9 22.7 0.3 0.1 0.1
Adjusted trading (loss)/profit - (1.4 ) (2.9 ) 3.4 2.6 4.9 (0.2 ) (0.2 ) (0.4 )
Trading (loss)/profit - (1.4 ) (2.9 ) 3.4 2.6 4.9 (0.2 ) (0.2 ) (0.4 )
See note 6 of the Accounts for details of the adjustments made to trading
(loss)/profit in arriving at adjusted trading (loss)/profit.
Macadamia
Our current production is down 8% on the same period last year with volumes
from our Malawi operation severely affected (down 57%) by the legacy impacts
of Cyclone Freddy. Our annual estimated total production is about 14% down
from 2023. Pricing for H1 2024 is down 8% on the same period last year and
this is due to the carryover sales of last season's stock. However, sales
volumes and pricing for the remainder of the year have improved significantly
with a more positive outlook moving forward for the macadamia market.
Avocado
Production of estate Hass in H1 2024 was 56% higher than H1 2023 due to a
strong start to the season, and an increase in volumes of the early season
Carmen variety. However, due to excessive rainfall in April we expect Hass
volumes to be lower in the latter part of the year. Logistics continue to
remain challenging with the Red Sea re-route. Pricing is significantly higher
than H1 last year due to lower Peruvian volumes arriving in Europe.
The Pinkerton crop is down on last year and pricing has also been down.
In Tanzania, continued planting of avocados in the first half of the year
brought the total area under cultivation to 356Ha.
Other fruits
Wine grape production in the Cape achieved a consecutive record harvest, up
12% on last year. All the grapes were sold to third-party wineries at similar
prices to last year.
The commercial blueberry trial in Kenya is currently testing different
Driscoll varieties which have, thus far, shown encouraging yield and quality
results. The volume of production this year has increased significantly on
last year as the new varieties have come into bearing. Production should
continue to rise as we progress through the second half of the year. At the
time of writing all sales were local but on entering H2 we started exporting,
which has improved price realisation.
Other agriculture
The other agricultural crops have had a mixed first half with the following
worth noting:
In Brazil, the prices achieved for the soya crop in the period were down 16%
on last year, and harvested crop was down 25%. The soya crop was impacted by
high temperatures and dry conditions which led to lower volumes and increased
incidence of pests and disease. As we move into the second half of the year,
we have downgraded forecast harvest volumes for all crops due to the ongoing
high temperatures and dry conditions in the region which are reducing volumes
and presenting increased pest and disease pressure.
Rubber manufactured in H1 2024 was up 63% and pricing was also up 13% on H1
last year. However, pricing is still insufficient to offset costs and create
margin. A strategic plan is currently being prepared to determine the way
forward.
Engineering
AJT continues to look to increase sales and diversify activities. This has
resulted in a profit for the first half of the year of £0.4 million (H1 2023:
loss £0.1 million).
Investments
Associates
Our shares in BF&M were categorised as held for sale in H1 2023. For the
first half of 2024 dividend income of £1.5 million (2023: £0.8 million) was
recorded as investment income.
Investment portfolio
The investment portfolio, which consists primarily of listed equities, was
valued at £37.6 million (30 June 2023: £37.7 million).
Pensions
The UK defined benefit scheme, on an IAS19 basis, has a deficit of £1.2
million (31 December 2023: deficit £4.2 million). Assets have reduced by
£5.5 million to £119.0 million, and liabilities have reduced by £8.6
million to £120.2 million. The improvement in net benefit is primarily due to
changes in the assumptions used to value liabilities. The total deficit on the
Group's defined benefit pension and post-employment benefit schemes now
amounts to £9.0 million as of 30 June 2024 (31 December 2023: deficit £11.3
million).
Progress on refocusing investments
Bardsley
The wind down of Bardsley England continues as detailed in earlier trading
statements and the 2023 Annual Financial Statements. A great deal has been
done to mitigate costs and return cash to the business during the closure and
sale of remaining assets. This process should conclude in the second half of
the year.
BF&M
On 6 June 2023, we agreed to the sale of our 37% holding in BF&M to
Bermuda Life Insurance Company Limited, a subsidiary of Argus Group Holdings
Limited, for a cash consideration of $100m, conditional on receipt of all
regulatory and tax approvals. The completion of the transaction was delayed
due to regulatory and other matters, and, on 28 June 2024, BF&M announced
that it would merge with Argus Group Holdings in a deal which would facilitate
the completion of the sale of Camellia's shares. It is still the Company's
expectation that the transaction will complete before the end of 2024 but up
to 50% of the consideration may be deferred into 2025 at Argus's option. The
Board restates its intention to consider a share buy-back, subject to the sale
of BF&M completing, and the Group's balance sheet permitting.
Properties
The Group continues to look to sell its real estate portfolio with property
sales of £2.4 million with profits from disposal of £0.3 million in the
first half of the year. The sale of Linton Park is proving difficult due to
the nature of the property and the depressed market conditions. The rest of
the estate has been subdivided, which should make sales of some of the other
properties easier in the second half of the year.
Collections
The sales out of the collections continue with receipts of £0.6 million
generating profits of £0.3 million in the first half.
DIVIDEND
Due to the ongoing losses in 2024, the Board has resolved not to pay an
interim dividend in 2024.
BOARD, COMMITTEE AND GENERAL COUNSEL CHANGES
We were pleased, following a full search process, to confirm the appointment
of Oliver Capon as Chief Financial Officer and Director with effect from 6
June 2024. Two new independent non-executive Directors, Alec Hayley and Alison
McFadyen, were appointed to the Board with effect from 1 July 2024. On 1
August 2024 Nischal Hindia joined the company as General Counsel and Company
Secretary. They all bring valuable and diverse experience to the Board.
With Alec and Alison having been appointed as independent non-executive
Directors the Board has, on the recommendation of the Nominations and
Governance Committee and effective 6 September 2024, reconstituted membership
of each of the Group Audit Committee and the Sustainability and Safeguarding
Committee as under:
Group Audit Committee:
Rachel English (Chair), Alec Hayley, Alison McFadyen
Sustainability and Safeguarding Committee:
Rachel English (Chair), Alison McFadyen, Simon Turner
OUTLOOK
As always, our financial results remain largely dependent on agriculture, and
in particular the tea market, where the largest portion of the production and
sales take place in the second half of the year. It is therefore premature to
provide any firm indication of the likely results for 2024.
However, taking account of current trends, revenue is expected to be broadly
in line with that of last year and the adjusted loss before tax for continuing
operations for the year is forecast to be in line with the trading update of
June, resulting in an anticipated loss of between £10 and £12 million.
SUMMARY
Whilst the ongoing market conditions continue to impact the profitability of
the Group, the Board continues to believe that the ongoing diversification
initiatives and operational improvements within the Group, coupled with the
strength of the balance sheet, will place Camellia Plc in a good position for
the future.
Byron Coombs Graham McLean Oliver Capon
Chief Executive Officer Director of Agriculture Chief Financial Officer
5 September 2024
INTERIM MANAGEMENT REPORT
The CEO's Statement and Operating Review form part of this report and it
includes information about important events that have occurred during the six
months ended 30 June 2024 and their impact on the financial statements
set out herein.
Principal risks and uncertainties
The Report of the Directors in the statutory financial statements for the year
ended 31 December 2023 (available on the Company's website:
www.camellia.plc.uk) highlighted risks and uncertainties that could have an
impact on the Group's businesses. As these businesses are widely spread both
in terms of activity and location, it is unlikely that any one single factor
could have a material impact on the Group's performance. These risks and
uncertainties continue to be relevant for the remainder of the year. In
addition, the CEO's Statement and Operating Review included in this report
refers to certain specific risks and uncertainties that the Group is presently
facing.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that these condensed financial statements have been
prepared in accordance with IAS 34 'Interim Financial Reporting', and that the
interim management report herein includes a fair review of the information
required by sections 4.2.7 and 4.2.8 of the Disclosure and Transparency Rules
of the United Kingdom's Financial Conduct Authority.
The Directors of Camellia Plc are listed in the Camellia Plc statutory
financial statements for the year ended 31 December 2023. Susan Walker did
not stand for re-election as CFO and Director at the Annual General Meeting
("AGM") held on 6 June 2024 and Oliver Capon was appointed as CFO and Director
following the AGM. As reported on 1 July 2024, Alec Hayley and Alison
McFadyen were appointed as independent non-executive Directors. There have
been no other subsequent changes of Directors and a list of current Directors
is maintained on the Group's website at www.camellia.plc.uk.
By order of the Board
Simon Turner
Chairman
5 September 2024
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Notes £'m £'m £'m
Restated Restated
Continuing operations
Revenue 5 105.1 98.0 254.2
Cost of sales (88.6 ) (91.6 ) (205.3 )
Gross profit 16.5 6.4 48.9
Other operating income 1.2 1.4 2.7
Distribution costs (7.8 ) (3.4 ) (20.1 )
Administrative expenses (19.6 ) (19.5 ) (41.8 )
Trading loss 5 (9.7 ) (15.1 ) (10.3 )
Share of associates' results 7 0.2 3.2 3.4
Profit on disposal of assets classified as held for sale 0.6 0.1 2.1
Impairment of intangible assets, investment properties and property, plant and - - (1.6 )
equipment
Reversal of impairment of investment in associate 14 - 18.0 19.0
Profit on disposal and fair value movements on money market investments 0.2 0.2 0.3
Operating (loss)/profit (8.7 ) 6.4 12.9
Investment income 1.8 1.1 2.9
Finance income 1.2 1.2 2.2
Finance costs (1.7 ) (1.1 ) (2.8 )
Net exchange (loss)/gain (3.4 ) 1.6 3.4
Employee benefit expense (0.2 ) (0.3 ) (0.4 )
Net finance (cost)/income 8 (4.1 ) 1.4 2.4
(Loss)/profit before tax (11.0 ) 8.9 18.2
Comprising
- adjusted loss before tax 6 (11.6 ) (9.2 ) (3.8 )
- release of creditor not required 6 - - 2.5
- profit on disposal of assets classified as held for sale 6 0.6 0.1 2.1
- impairment of intangible assets, investment properties and property, plant 6 - - (1.6 )
and equipment
- reversal of impairment of investment in associate 6 - 18.0 19.0
(11.0 ) 8.9 18.2
Taxation 9 (2.1 ) (1.5 ) (5.2 )
(Loss)/profit for the period from continuing operations (13.1 ) 7.4 13.0
Loss for the period from discontinued operations 10 (0.9 ) (3.9 ) (14.4 )
(Loss)/profit after tax (14.0 ) 3.5 (1.4 )
(Loss)/profit attributable to:
Owners of Camellia Plc Non-controlling interests (13.6 ) 3.1 (3.7 )
(0.4 ) 0.4 2.3
(14.0 ) 3.5 (1.4 )
(Loss)/earnings per share - basic and diluted
From continuing operations 12 (459.8) p 253.4 p 387.4 p
From continuing and discontinued operations 12 (492.4) p 112.2 p (134.0) p
Note
Prior period comparatives have been restated following the reclassification of
Bardsley as a discontinued operation.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Restated Restated
(Loss)/profit for the period (14.0 ) 3.5 (1.4 )
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or loss:
Financial assets at fair value through other
comprehensive income:
Fair value adjustment for the financial assets disposed - - (0.2)
Unwind of deferred tax on financial assets 0.1 (0.2) (0.5)
Changes in the fair value of financial assets (1.8 ) 1.8 5.1
Deferred tax movement in relation to fair value adjustments - (0.3 ) -
Remeasurements of post employment benefit obligations 3.6 (0.8 ) (3.9 )
Deferred tax movement in relation to post employment benefit obligations (0.1 ) (0.2 ) 0.2
Corporation tax movement in relation to post employment benefit obligations
- 0.1 -
1.8 0.4 0.7
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences 9.0 (25.1 ) (43.2 )
Share of other comprehensive income of associates - - (0.1 )
9.0 (25.1 ) (43.3 )
Other comprehensive income/(expense) for the period, net of tax 10.8 (24.7 ) (42.6 )
Total comprehensive expense for the period (3.2 ) (21.2 ) (44.0 )
Total comprehensive (expense)/income attributable to:
Owners of Camellia Plc (7.3 ) (15.6 ) (35.3 )
Non-controlling interests 4.1 (5.6 ) (8.7 )
(3.2 ) (21.2 ) (44.0 )
Note
Prior period comparatives have been restated following the reclassification of
Bardsley as a discontinued operation.
CONDENSED CONSOLIDATED BALANCE SHEET
at 30 June 2024
30 June 30 June 31 December
2024 2023 2023
Notes £'m £'m £'m
ASSETS
Non-current assets
Intangible assets 4.8 6.2 4.7
Property, plant and equipment 13 151.2 170.2 151.8
Right-of-use assets 12.2 23.2 12.5
Investment properties 23.3 24.4 23.3
Biological assets 12.9 12.1 11.2
Investments in associates 14 9.5 10.3 10.4
Equity investments at fair value through other
comprehensive income 30.6 29.7 30.6
Money market investments at fair value through
profit or loss 5.8 6.9 6.5
Debt investments at amortised cost - 1.1 -
Other investments - heritage assets 7.5 8.8 7.5
Retirement benefit surplus 18 - 1.4 -
Trade and other receivables 2.3 3.1 2.7
Total non-current assets 260.1 297.4 261.2
Current assets
Inventories 57.7 64.4 49.4
Biological assets 10.3 10.6 8.8
Trade and other receivables 43.1 37.9 48.2
Debt investments at amortised cost 1.2 - 1.0
Current income tax assets 0.7 0.7 0.9
Cash and cash equivalents (excluding bank overdrafts) 42.7 47.0 47.9
155.7 160.6 156.2
Assets classified as held for sale 15 77.9 81.1 82.3
Total current assets 233.6 241.7 238.5
LIABILITIES
Current liabilities
Financial liabilities - borrowings 16 (25.1 ) (16.4 ) (18.6 )
Lease liabilities (1.1 ) (2.0 ) (2.2 )
Trade and other payables (49.8 ) (52.2 ) (52.2 )
Current income tax liabilities (2.4 ) (2.3 ) (1.6 )
Employee benefit obligations 18 (1.2 ) (0.9 ) (1.6 )
Provisions 17 (9.8 ) (10.8 ) (7.6 )
(89.4 ) (84.6 ) (83.8 )
Liabilities related to assets classified as held for sale 15 - (2.0 ) (2.1 )
Total current liabilities (89.4 ) (86.6 ) (85.9 )
Net current assets 144.2 155.1 152.6
Total assets less current liabilities 404.3 452.5 413.8
Non-current liabilities
Financial liabilities - borrowings 16 (3.3 ) (3.8 ) (3.3 )
Lease liabilities (7.4 ) (17.2 ) (9.1 )
Deferred tax liabilities (28.6 ) (32.9 ) (28.4 )
Employee benefit obligations 18 (7.8 ) (9.9 ) (9.7 )
Total non-current liabilities (47.1 ) (63.8 ) (50.5 )
Net assets 357.2 388.7 363.3
EQUITY
Called up share capital 0.3 0.3 0.3
Share premium 15.3 15.3 15.3
Reserves 302.9 331.9 310.2
Equity attributable to owners of Camellia Plc 318.5 347.5 325.8
Non-controlling interests 38.7 41.2 37.5
Total equity 357.2 388.7 363.3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2024
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Notes £'m £'m £'m
Restated Restated
Cash (used in)/generated from operations
Cash flows from operating activities 19 (13.9 ) (16.7 ) (10.3 )
Interest received 1.2 2.5 2.2
Interest paid (1.5 ) (1.3 ) (1.7 )
Income taxes paid (0.8 ) (3.7 ) (7.0 )
Net cash used by operating activities (15.0 ) (19.2 ) (16.8 )
Net cash (used by)/generated from (2.4) 2.8 1.9
discontinued operations
Net cash flow used by operations (17.4 ) (16.4 ) (14.9 )
Cash flows from investing activities
Purchase of property, plant and equipment (4.1 ) (6.5 ) (10.7 )
Proceeds from sale of non-current assets 0.2 0.4 1.2
Proceeds from sale of assets held for sale 3.0 0.1 0.3
Biological assets: non-current - disposals 0.1 0.1 0.9
Proceeds from the disposal of a subsidiary - 16.1 16.6
Dividends received from associates 0.2 0.9 1.0
Purchase of investments (1.8 ) (4.5 ) (6.1 )
Proceeds from sale of investments 2.7 0.5 4.1
Income from investments 1.8 0.4 2.9
Net cash generated from investing activities 2.1 7.5 10.2
Net cash generated from/(used by) investing activities discontinued operations 3.3 0.1 (0.2 )
Net cash flow from investing activities 5.4 7.6 10.0
Cash flows from financing activities
Equity dividends paid - - (4.0 )
Dividends paid to non-controlling interests (2.9 ) (2.0 ) (2.6 )
New loans 4.5 3.1 4.8
Loans repaid (2.3 ) - (2.0 )
Payments of lease liabilities (0.3 ) (0.4 ) (0.4 )
Net cash flow from financing activities (1.0 ) 0.7 (4.2 )
Net cash from financing activities (0.8 ) (0.8 ) (1.7 )
- discontinued operations
Net cash flow from financing activities (1.8 ) (0.1 ) (5.9 )
Net decrease in cash and cash equivalents from continuing operations (13.9 ) (11.0 ) (10.8 )
Net cash inflow from discontinued operation 10 0.1 2.1 -
Cash and cash equivalents at beginning of period 32.8 44.5 44.5
- continuing
Cash and cash equivalents at beginning of period - discontinued 1.1 1.1 1.1
Exchange gains/(losses) on cash 4.0 (1.7 ) (0.9 )
Cash and cash equivalents at end of period 22.9 31.8 32.8
- continuing
Cash and cash equivalents at end of period 1.2 3.2 1.1
- discontinued
Cash and cash equivalents at end of period - total 20 24.1 35.0 33.9
For the purposes of the cash flow statement, cash and cash equivalents are
included net of overdrafts repayable on demand.
Note
Prior period comparatives have been restated following the reclassification of
Bardsley as a discontinued operation.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2024
Attributable to the owners of Camellia Plc
Non-
Share Share Treasury Retained Other controlling Total
capital premium shares earnings reserves Total interests equity
Notes £'m £'m £'m £'m £'m £'m £'m £'m
At 1 January 2023 0.3 15.3 (0.4 ) 348.5 2.1 365.8 48.8 414.6
Profit for the period (restated) - - - 3.1 - 3.1 0.4 3.5
Other comprehensive expense for the period - - - (1.3 ) (17.4 ) (18.7 ) (6.0 ) (24.7 )
Dividends 11 - - - (2.8 ) - (2.8 ) (2.0 ) (4.8 )
Share of associate's other equity movements - - - 0.1 - 0.1 - 0.1
At 30 June 2023 0.3 15.3 (0.4 ) 347.6 (15.3 ) 347.5 41.2 388.7
At 1 January 2023 0.3 15.3 (0.4 ) 348.1 1.7 365.0 48.8 413.8
(Loss)/profit for the period (restated) - - - (3.7 ) - (3.7 ) 2.3 (1.4 )
Other comprehensive expense for the period - - - (4.1 ) (27.5 ) (31.6 ) (11.0 ) (42.6 )
Transfer of realised gains on disposal of financial assets - - - 0.4 (0.4 ) - - -
Dividends 11 - - - (4.0 ) - (4.0 ) (2.6 ) (6.6 )
Share of associate's other equity movements - - - 0.1 - 0.1 - 0.1
At 31 December 2023 0.3 15.3 (0.4 ) 336.8 (26.2 ) 325.8 37.5 363.3
Loss for the period - - - (13.6 ) - (13.6 ) (0.4 ) (14.0 )
Other comprehensive income for the period - - - 3.5 2.8 6.3 4.5 10.8
Transfer of realised loss on disposal of financial assets - - - (0.1) 0.1 - - -
Dividends 11 - - - - - - (2.9) (2.9)
At 30 June 2024 0.3 15.3 (0.4 ) 326.6 (23.3 ) 318.5 38.7 357.2
NOTES TO THE ACCOUNTS
1 Basis of preparation
These financial statements are the interim condensed consolidated financial
statements of Camellia Plc, a company registered in England, and its
subsidiaries (the "Group") for the six month period ended 30 June 2024 (the
"Interim Report"). The interim report does not include all the notes of the
type normally included in an annual financial report. Accordingly, this report
should be read in conjunction with the Report and Accounts (the "Annual
Report") for the year ended 31 December 2023.
The financial information contained in this interim report has not been
audited and does not constitute statutory accounts within the meaning of
Section 435 of the Companies Act 2006. A copy of the statutory accounts for
the year ended 31 December 2023 has been delivered to the Registrar of
Companies. The auditors' opinion on these accounts was unqualified and does
not contain an emphasis of matter paragraph or a statement made under Section
498(2) and Section 498(3) of the Companies Act 2006.
The interim condensed financial statements have been prepared in accordance
with United Kingdom adopted International Financial Reporting Standards
("IFRS") including IAS 34 "Interim Financial Reporting". For these purposes,
IFRS comprise the Standards issued by the International Accounting Standards
Board ("IASB") and Interpretations issued by the International Financial
Reporting Standards Interpretations Committee ("IFRS IC").
During the period the Bardsley business has been classified as a discontinued
operation (see note 10).
These interim condensed consolidated financial statements were approved by the
Board of Directors on 5 September 2024. At the time of approving these
financial statements, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue to operate for the
foreseeable future. They therefore continue to adopt the going concern basis
of accounting in preparing the financial statements.
2 Changes to accounting policies
These interim condensed financial statements have been prepared on the basis
of accounting policies consistent with those applied in the financial
statements for the year ended 31 December 2023. Amendments to IFRSs effective
for the financial year ending 31 December 2024 are not expected to have a
material impact on the Group.
3 Going concern
The Directors considered the impact of the current strategy and trading
environment as set out in the Chairman's Statement and operating review on the
business for the next 15 months. We have considered variables which may impact
on revenue, profits and cash flows. In light of the nature of our business, we
expect our agriculture businesses will continue to operate broadly as
currently.
At 30 June 2024, the Group had cash and cash equivalents of £24.1 million
with loans outstanding of £9.8 million. In addition, the Group had undrawn
short-term loans and overdraft facilities of £7.7 million and a portfolio of
liquid investments with a fair market value of £37.6 million.
The Directors have modelled various severe but plausible scenarios using
assumptions including the combined effect of reduced sales volumes and prices
for all agriculture crops produced. The revenue and operational impact of such
volume and price reductions across our operations would have a substantially
negative impact on Group profitability.
The Directors believe that the Company and the Group are well placed to manage
their financing and other business risks satisfactorily and have a reasonable
expectation that the Company and the Group will have adequate resources to
continue in operational existence for the foreseeable future. The Directors
therefore continue to adopt the going concern basis in preparing the financial
statements.
4 Cyclical and seasonal factors
Due to climatic conditions, the Group's tea operations in India and Bangladesh
produce most of their crop during the second half of the year. Tea production
in Kenya remains at consistent levels throughout the year but in Malawi the
majority of tea is produced in the first six months.
Soya in Brazil is generally harvested in the first half of the year. The
majority of the macadamia crop in Malawi and South Africa is harvested in the
second half of the year but in Kenya the majority of macadamia is harvested in
the first half. Avocados in Kenya are mostly harvested in the second half of
the year.
There are no other cyclical or seasonal factors which have a material impact
on the trading results.
5 Segment reporting
Agriculture Engineering Unallocated Consolidated
Six months Six months Six months Six months
ended ended ended ended
30 June 30 June 30 June 30 June
2024 2023 2024 2023 2024 2023 2024 2023
£'m £'m £'m £'m £'m £'m £'m £'m
Restated Restated
Continuing operations
Revenue
External sales 94.1 90.4 10.5 7.1 0.5 0.5 105.1 98.0
Adjusted trading (loss)/profit (5.8 ) (9.9 ) 0.4 (0.1 ) (4.3 ) (5.1 ) (9.7 ) (15.1 )
Separately disclosed items - - - - - - - -
Trading (loss)/profit (5.8 ) (9.9 ) 0.4 (0.1 ) (4.3 ) (5.1 ) (9.7 ) (15.1 )
Share of associates' results - - - - 0.2 3.2 0.2 3.2
Profit on disposal of assets classified as held for sale - - - - 0.6 0.1 0.6 0.1
Reversal of impairment of investment in associate - - - - - 18.0 - 18.0
Profit on disposal and fair value movements on money market investments 0.2 0.2 - - - - 0.2 0.2
Operating (loss)/profit (5.6 ) (9.7 ) 0.4 (0.1 ) (3.5 ) 16.2 (8.7 ) 6.4
Comprising
- adjusted operating (loss)/profit before tax (5.6 ) (9.7 ) 0.4 (0.1 ) (4.1 ) (1.9 ) (9.3 ) (11.7 )
- profit on disposal of assets classified as held for sale - - - - 0.6 0.1 0.6 0.1
- reversal of impairment of investment in associate - - - - - 18.0 - 18.0
(5.6 ) (9.7 ) 0.4 (0.1 ) (3.5 ) 16.2 (8.7 ) 6.4
Investment income 1.8 1.1
Net finance (cost)/income (4.1 ) 1.4
(Loss)/profit before tax (11.0 ) 8.9
Taxation (2.1 ) (1.5 )
(Loss)/profit for the period from continuing operations (13.1 ) 7.4
Loss for the period from discontinued operations (0.9) (3.9 )
(Loss)/profit after tax (14.0 ) 3.5
Year Ended 31 December 2023
Agriculture Engineering Unallocated Consolidated
£'m £'m £'m £'m
Restated Restated
Continuing operations
Revenue
External sales 237.5 15.7 1.0 254.2
Adjusted trading loss (2.8 ) (0.3 ) (9.7 ) (12.8 )
Separately disclosed items 2.5 - - 2.5
Trading loss (0.3 ) (0.3 ) (9.7 ) (10.3 )
Share of associates' results - - 3.4 3.4
Profit on disposal of assets classified as held for sale - - 2.1 2.1
Impairment of intangible assets and investment properties (1.4 ) - (0.2 ) (1.6 )
Reversal of impairment of investment in associate - - 19.0 19.0
Profit on disposal of financial assets 0.3 - - 0.3
Operating (loss)/profit (1.4 ) (0.3 ) 14.6 12.9
Comprising
- adjusted operating loss before tax - (0.3 ) (8.8 ) (9.1 )
- profit on disposal of assets classified as held for sale - 2.1 2.1
- impairment of intangible assets and investment properties (1.4 ) - (0.2 ) (1.6 )
- reversal of impairment of investment in associate - - 19.0 19.0
- release of creditor not required - - 2.5 2.5
(1.4 ) (0.3 ) 14.6 12.9
Investment income 2.9
Net finance income 2.4
Loss before tax 18.2
Taxation (5.2 )
Loss for the period from continuing operations 13.0
Loss for the period from discontinued operations (14.4 )
Loss after tax (1.4 )
6 Adjusted loss
The Group seeks to present an indication of the underlying performance which
is not impacted by exceptional items or items considered non-operational in
nature. This measure of profit is described as 'adjusted' and is used by
management to measure and monitor performance.
Six months Six months
ended ended
30 June 30 June
2024 2023
£'m £'m
Restated
Operating (loss)/profit (8.7 ) 6.4
Exceptions or items considered non-operational:
Profit on disposal of assets classified as held for sale 0.6 0.1
Reversal of impairment of investment in associate - 18.0
Underlying operating loss before tax (9.3 ) (11.7 )
Investment income 1.8 1.1
Net finance (cost)/income (4.1 ) 1.4
Adjusted loss before tax (11.6 ) (9.2 )
The following items have been excluded in arriving at the adjusted measure and
have been separately disclosed:
§ A profit on disposal of assets classified as held for sale of £0.6 million
(2023: six months £0.1 million)
§ Impairment reversal of the Group's investment in BF&M Limited (note 14) of
£nil (2023: six months £18.0 million)
7 Share of associates' results
The Group's share of the results of associates is analysed below:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Profit before tax 0.5 3.4 3.9
Taxation (0.3 ) (0.2 ) (0.5 )
Profit after tax 0.2 3.2 3.4
8 Finance income and costs
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Restated Restated
Finance costs - interest payable on loans and bank overdrafts (1.3 ) (0.8 ) (2.2 )
Interest payable on leases (0.2 ) (0.2 ) (0.5 )
Other interest payable (0.2 ) (0.1 ) (0.1 )
Finance costs (1.7 ) (1.1 ) (2.8 )
Finance income - interest income on short-term bank deposits 1.2 1.2 2.2
Net exchange (loss)/gain on foreign currency balances (3.4 ) 1.6 3.4
Employee benefit expense (0.2 ) (0.3 ) (0.4 )
Net finance (cost)/income (4.1 ) 1.4 2.4
9 Taxation on loss on ordinary activities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Current tax
UK corporation tax
UK corporation tax - - -
Adjustment in respect of prior years - - -
- - -
Foreign tax
Corporation tax 3.4 2.5 6.9
Adjustment in respect of prior years - - (0.7 )
3.4 2.5 6.2
Total current tax 3.4 2.5 6.2
Deferred tax
Origination and reversal of timing differences
United Kingdom - (0.2 ) (0.1 )
Overseas deferred tax (1.3 ) (0.8 ) (0.9 )
Tax on loss on ordinary activities 2.1 1.5 5.2
Tax on loss on ordinary activities for the six months to 30 June 2024 has been
calculated on the basis of the estimated annual effective rate for the year
ending 31 December 2024.
10 Discontinued operations - Bardsley
Following the announcement in January 2024, Bardsley has proceeded with an
orderly wind down and closure of its operations, with packing operations
ceasing in April 2024 and with the majority of assets disposed and leases
exited.
The prior year figures in the consolidated income statement and the
consolidated cashflow statement have been restated in accordance with IFRS 5
to report the discontinued operations separately from continuing operations.
The results of the discontinued operations, which have been included in the
profit for the period, were as follows:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Revenue 4.1 12.5 18.1
Cost of sales (3.8 ) (11.7 ) (16.8 )
Gross profit 0.3 0.8 1.3
Other operating income 0.6 0.2 0.7
Distribution costs (0.2 ) (1.2 ) (1.9 )
Administrative expenses (1.7 ) (3.6 ) (5.4 )
Trading loss (1.0 ) (3.8 ) (5.3 )
Impairments of property, plant and equipment and right-of-use assets (1.1 ) - (7.8 )
Provisions and costs associated with restructuring and dilapidations 0.1 - (1.1 )
Net impact of surrendering and releasing leases 1.2 - -
Operating loss (0.8 ) (3.8 ) (14.2 )
Net finance costs (0.1 ) (0.1 ) (0.2 )
Loss before tax (0.9 ) (3.9 ) (14.4 )
11 Equity dividends
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2023 of nil (2022: 102p) - 2.8 2.8
per share
Interim dividend for the year ended 31 December 2023 of 44p per share 1.2
4.0
Dividends amounting to £nil (2023: six months £0.1 million - year £0.1
million) have not been included as group companies hold 62,500 issued shares
in the company. These are classified as treasury shares.
Proposed interim dividend for the year ended
31 December 2024 of nil (2023: 44p) per share - 1.2
12 (Loss)/earnings per share (EPS)
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
Loss EPS Profit EPS Profit/(loss) EPS
£'m Pence £'m Pence £'m Pence
Restated Restated Restated Restated
Attributable to ordinary shareholders - continuing operations (12.7 ) (459.8 ) 7.0 253.4 10.7 387.4
Attributable to ordinary shareholders - continuing and discontinued operations (13.6 ) (492.4 ) 3.1 112.2 (3.7 ) (134.0 )
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 of 2,762,000 (2023: six months 2,762,000 - year
2,762,000), which excludes 62,500 (2023: six months 62,500 - year 62,500)
shares held by the Group as treasury shares.
13 Property, plant and equipment
During the six months ended 30 June 2024 the Group acquired assets with a cost
of £4.1 million (2023: six months £6.4 million - year £11.0 million).
Assets with a carrying amount of £2.3 million were disposed of during the six
months ended 30 June 2024 (2023: six months £0.2 million - year £1.2
million). No assets were reclassified from and to investment properties during
the six months ended 30 June 2024 (2023: six months £1.0 million - year £1.0
million).
14 Investments in associates
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
At 1 January 10.4 99.8 99.0
Exchange differences (0.7 ) (3.9 ) (4.1 )
Share of profit (note 7) 0.2 3.2 3.4
Dividends (0.4 ) (1.0 ) (1.0 )
Other equity movements - 0.1 -
Reclassification to held for sale - (87.9 ) (86.9 )
At end of period 9.5 10.3 10.4
Provision for diminution in value
At 1 January - 29.6 29.6
Exchange differences - (0.9 ) (0.9 )
Reversal of impairment - (18.0 ) (19.0 )
Reclassification to held for sale - (10.7 ) (9.7 )
At end of period - - -
Net book value at end of period 9.5 10.3 10.4
In 2023, the Group entered into an agreement to sell it's entire holding in
BF&M Limited, to Bermuda Life Insurance Company Limited, subject to
regulatory and tax approvals. Net proceeds are expected to result in cash
consideration of $100m payable to Camellia, before expenses and the
transaction is expected in be completed in the latter part of 2024. This
investment was reclassified as held for sale and is no longer equity
accounted.
15 Assets classified as held for sale/Liabilities related to
assets classified as held for sale
During the period the following assets were transferred to held for sale:
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
At 1 January 82.3 4.6 4.6
Reclassified from investment properties - - 0.8
Reclassified from investments in associates (note 14) - 77.2 77.2
Reclassified from heritage assets - - 1.3
82.3 81.8 83.9
Disposals during period (4.4 ) (0.7 ) (1.6 )
At end of period 77.9 81.1 82.3
Liabilities related to assets classified as held for sale at end of
the period:
Reclassified from lease liabilities - 2.0 2.1
During the period, two properties and some of the Group's heritage assets and
other items of art have been sold, realising cash proceeds of £3.0 million.
16 Borrowings
Borrowings (current and non-current) include loans of £9.8 million (loans
2023: six months £8.2 million - year £7.9 million) and bank overdrafts of
£18.6 million (2023: six months £12.0 million - year £14.0 million). The
following loan movements occurred during the six months ended 30 June 2024:
£'m
Balance at 1 January 2024 7.9
Exchange differences (0.3 )
Repayments (2.3 )
New loans 4.5
Balance at 30 June 2024 9.8
17 Provisions
Wages and Legal
salaries claims Others Total
£'m £'m £'m £'m
At 1 January 2023 9.1 0.9 0.8 10.8
Exchange differences (0.5 ) (0.1 ) - (0.6 )
Utilised in the period (1.7 ) (0.2 ) (0.1 ) (2.0 )
Provided in the period 3.1 - - 3.1
Unused amounts reversed in period (0.5 ) - - (0.5 )
At 30 June 2023 9.5 0.6 0.7 10.8
At 1 January 2023 9.1 0.9 0.8 10.8
Exchange differences (0.7 ) (0.2 ) - (0.9 )
Utilised in the period (7.6 ) (0.4 ) - (8.0 )
Provided in the period 6.5 - 0.6 7.1
Unused amounts reversed in period (1.3 ) (0.1 ) - (1.4 )
At 31 December 2023 6.0 0.2 1.4 7.6
Utilised in the period - (0.1 ) - (0.1 )
Provided in the period 3.1 - - 3.1
Unused amounts reversed in period - - (0.8 ) (0.8 )
At 30 June 2024 9.1 0.1 0.6 9.8
Current:
At 30 June 2024 9.1 0.1 0.6 9.8
At 31 December 2023 6.0 0.2 1.4 7.6
At 30 June 2023 9.5 0.6 0.7 10.8
The wages and salaries provisions are in respect of ongoing wage and bonus
negotiations in India and Bangladesh.
Legal claims relate to the cost of the defence of the litigation concerning
our East African operations, including settlements and the expected cost of
progressive measures.
Others relate to provisions for general claims and dilapidations.
18 Employee benefit obligations
The UK defined benefit pension scheme and the overseas pension, gratuity and
medical benefit schemes operated in Group subsidiaries located in Bangladesh
and India for the purpose of IAS 19 have been updated to 30 June 2024 from the
valuations as at 31 December 2023 by the actuaries and the movements have been
reflected in this interim statement.
An actuarial gain of £3.6 million was realised in the period in relation to
the Group's employee obligations of which £3.1 million related to the UK
defined benefit pension scheme. In relation to the UK defined benefit pension
scheme a loss of £3.9 million was realised in relation to the scheme assets
and a gain of £7.0 million was realised in relation to changes in the
underlying actuarial assumptions. The assumed discount rate has increased to
5.05% (31 December 2023: 4.45%), the assumed rate of inflation (CPI) has
increased to 2.50% (31 December 2023: 2.40%). There has been no change in the
mortality assumptions used.
The Court of Appeal recently upheld the High Court's 2023 ruling on the
'Virgin Media v NTL Pension Trustees Ltd and others'. The Group are aware of
this legal ruling and are assessing whether there is any impact although
currently no conclusion has been reached, therefore no quantification of any
potential impact has been determined.
19 Reconciliation of (loss)/profit to cash flow
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Restated Restated
(Loss)/profit from operations (8.7 ) 6.4 12.9
Share of associates' results (0.2 ) (3.2 ) (3.4 )
Depreciation and amortisation 4.7 5.4 10.1
Depreciation of right-of-use assets 0.3 0.2 0.8
Impairment of assets - - 1.6
Reversal of impairment of investment in associate - (18.0 ) (19.0 )
Realised movements on biological assets - non-current (0.1 ) (0.1 ) (2.2 )
Money market investments at fair value through profit or loss - gain (0.2 ) (0.2 ) (0.3 )
Profit on disposal of non-current assets - (0.1 ) (0.1 )
Profit on disposal of assets classified as held for sale (0.6 ) (0.1 ) (2.1 )
Movements in provisions 2.2 0.6 (2.3 )
Increase in inventories (9.7 ) (14.7 ) (4.3 )
(Increase)/decrease in biological assets (0.9 ) (0.5 ) 0.6
Decrease/(increase) in trade and other receivables 3.7 3.8 (4.4 )
(Decrease)/increase in trade and other payables (4.4 ) 3.8 1.8
Cash used in operations (13.9 ) (16.7 ) (10.3)
20 Cash and cash equivalents
For the purposes of the cash flow statement cash and cash equivalents
comprise:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2024 2023 2023
£'m £'m £'m
Cash and cash equivalents 42.7 47.0 47.9
Overdrafts repayable on demand (included in (18.6 ) (12.0 ) (14.0 )
current liabilities - borrowings)
24.1 35.0 33.9
21 Contingent liabilities
The Group operates in certain countries where its operations are potentially
subject to a number of legal and tax claims. When required, appropriate
provisions are made for the expected cost of such claims.
Malawi
The Malawi Revenue Authority (MRA) indicated in 2021 that it intended to
collect VAT on sales made at auction and under private treaty for export, in
the period since 2017. Tea sales intended for the export market were subject
to an industry wide agreement with the MRA and the Reserve Bank of Malawi made
at the time the auction was established, resulting in these deemed exports
being zero rated for VAT. Following discussions between the Malawi government,
the MRA and the tea industry, the MRA has given permission for the auction to
continue with teas deemed as export zero rated for VAT. The assessment raised
against Eastern Produce Malawi was suspended. Eastern Produce Malawi's
estimated contingent liability for VAT on these deemed export sales, excluding
any penalties and interest, is approximately £2.7 million.
In 2023 the MRA carried out a tax audit on the operations of Eastern Produce
Malawi Limited for the period 2020 to 2022 and issued assessment notices
amounting to £3.1 million in relation to corporation, value added,
non-resident, fringe benefit and PAYE taxes, including related penalties and
interest . An amount of £0.5 million has been provided based on external
advice received and these assessments are being strongly contested.
Bangladesh
Assessments have been received of £8.1 million for corporate income tax and
VAT matters. These are being contested on the basis that they are without
technical merit.
India
Assessments have been received for excise duties of £0.2 million, sales and
entry tax of £0.9 million and of £0.8 million for income tax matters. These
are being contested on the basis that they are without technical merit.
Also, a long running dispute between our local subsidiaries and the Government
of West Bengal over the payment of a land tax, locally called, "Salami",
remains unresolved. Lawyers acting for the Group have advised that payment of
Salami does not apply, accordingly no provisions have been made. The sum in
dispute, excluding fines and penalties, amounts to £1.2 million.
Kenya
The Kenya Revenue Authority (KRA) has issued assessments amounting to £5.0
million in relation to corporation, value added and withholding tax matters
including related penalties and interest. Having considered professional
advice, the relevant companies disagree with these assessments and have filed
objections with the Kenyan Tax Appeals Tribunal.
22 Related party transactions
There have been no related party transactions that had a material effect on
the financial position or performance of the Group in the first six months of
the financial year.
23 Subsequent events
There were no adjusting post balance sheet events.
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. END IR UPUWABUPCGAARecent news on Camellia
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