AGM Trading Statement

RNS Number : 5496P

Camellia PLC

10 June 2020

 

10 June 2020 

AGM Trading Statement

Camellia Plc (the "Company")

Camellia Plc (CAM.L) has today issued the following update on trading in the year to date.

People

First, we would like to reiterate our thanks to all of our staff and business partners around the world, for their continuing efforts in difficult circumstances. 

Trading

Agriculture  Our agricultural operations continue to work as close to normal as they can.  India returned to 100% workforce deployment from 1 June, but we have yet to see the full impact on volumes from the shut down and the recent torrential rain brought by Cyclone Amphan. Lower volumes in the Indian tea auctions has meant improved prices.  Kenya continues to produce record volumes of tea which has resulted in continued weakening of auction prices and has led to lower prices for Malawi teas also.  In addition, as indicated in our annual results announcement, the Kenyan government has recently introduced a range of new regulations to govern the tea industry from 29 May 2020.  The full impact of these regulations is still to be determined.  

Tea production in Bangladesh is below expectation due to a dry start to the season and although there has been some improvement in the most recent auctions, prices remain below those of last year.

The harvest for our Hass avocado crop began recently and early indications are that our volumes will be substantially above those of last year.  While prices in Europe weakened in recent weeks, we believe that they will improve as the season progresses.   Following our first small Blueberry crop last year, from our trial in Kenya, which was in line with volume expectations and produced fruit with excellent flavour and size, we had expected to be harvesting our first full Blueberry crop this autumn. The bushes however have not developed as anticipated and our first full harvest is now expected in 2021.

As previously reported, the impact of the very dry hot weather in Malawi and South Africa during the fourth quarter of 2019 caused a decline in our macadamia production for 2020.  Lower global demand is also likely to impact prices. 

Our remaining agricultural businesses are coping well in the current exceptional circumstances.

Non-agriculture  Our non-agriculture businesses continue to trade as best they can whilst preparing for a post Covid-19 operating environment which is likely to prove very challenging.

Financial Position 

The Group has a strong balance sheet with £73.3 million in cash and cash equivalents net of borrowings as at 31 May 2020.  In addition, our investment portfolio had a market value of £47.0 million at 31 May 2020.  Following the Board's decision on 1 April 2020 not to declare a final dividend for the 2019 financial year, it remains our intention to review dividends at the time of the interim results. 

Outlook

As previously announced, we know that results for 2020 are likely to be substantially below those of 2019 but it is not yet possible to give further detailed guidance on the impact of COVID-19 on our operations at this stage.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014. 

Enquiries 

Camellia Plc    01622 746655 

Tom Franks, CEO 

Susan Walker, CFO 

Panmure Gordon    020 7886 2500 

Nominated Adviser and Broker 

Emma Earl 

Erik Anderson 

Maitland/AMO

PR 

William Clutterbuck    07785 292617 

 

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