Half Yearly Report

RNS Number : 6608M

Camellia PLC

29 August 2013

 



Camellia Plc
Half yearly report for period ended 30 June 2013
Highlights from the results
	Six months		Six months
	ended		ended
	30 June 2013		30 June 2012
	£'000		£'000
			restated - see note 2
Revenue	113,753		110,389
Trading profit	8,741		6,694
Profit before tax	11,930		28,555
Headline profit before tax	12,466		11,739
Profit for the period	6,565		19,782
Earnings per share	156.9	p	514.5	p
Interim dividend	34	p	32	p

Chairman's statement

The headline profit before tax was £12,466,000 for the six months to 30 June 2013 compared with £11,739,000 in the same period last year. Headline profit is a measure of underlying performance which is not impacted by exceptional and other items. In the comparative period for the six months to 30 June 2012, biological asset gains were £16,079,000 of which £15,751,000 were attributable to our Malawi operations following the devaluation of the Malawian Kwacha in that period. After taking account of this and exceptional items the profit before tax for the six month period to 30 June 2013 amounted to £11,930,000 (2012: £28,555,000).

The board has declared an interim dividend of 34p per ordinary share payable on 4 October 2013 to shareholders registered on 6 September 2013.

Tea

India

Weather in Assam has been erratic with periods of drought mixed with prolonged wet spells in different gardens. The impact on the crop has been mixed. Overall it is behind budget despite being ahead of the same period last year in some gardens. Tea prices in Assam have been higher than in the same period last year.

Growing conditions in the Dooars and Darjeeling have been more favourable with crops to date ahead of last year but tea prices have been similar to the same period last year.

Bangladesh

Crops recovered from the drought conditions earlier in the year following a period of plentiful rainfall. Prices have remained high throughout the period but have recently softened following the withdrawal of the supplemental import tax on tea of 20% leaving the import duty on black tea at 62%.

Africa

Production in Kenya has continued to be well ahead of the same period last year following the high levels of rainfall earlier in the year. Prices have declined at auction but the higher volumes have reduced the cost of production resulting in profits similar to the previous period.

Yields in Malawi have recovered significantly following recent rainfall and production is slightly ahead of budget and ahead of the same period last year. The rebuilding of the Makwasa factory, following the fire in August 2011, has been completed two months ahead of schedule and good quality tea is now being produced.

Edible nuts

The production of macadamia nuts in Malawi is down on budget following the dry period at the time of flowering. However, the quality of the nuts at cracking has been good. In South Africa the macadamia harvest is underway with volumes expected to be down on budget following poor climatic conditions at the end of last year. Prices remain firm.

In California, 2013 is an "off" year for pistachio production and the volume of crop will be minimal.

Other horticulture

The avocado harvest in Kenya has commenced but volumes are expected to be lower than last year and prices have also been lower following the high volumes of fruit from Peru and South Africa available in Europe.

Citrus production in California is well ahead of budget and prices remain higher than last year.

The arable harvest to date in Brazil has been ahead of expectations. The costs of production and sale prices have both increased over those of 2012.

The volume of wine sales from South Africa has started to increase following a sustained marketing campaign.

Food storage and distribution

Storage levels at ACS&T have continued to improve but pressures on margins remain with sustained competition in the industry.

Our operations in the Netherlands have seen an increase in demand but there is a shortage of supply for certain products. Conditions remain challenging.

Engineering

The UK businesses of AJT Engineering servicing the oil and the gas sector have seen an increase in demand and profits are in line with budget.

Production at the new factory in Hinkley for Abbey Metal has started to increase with strong performance in the civil aviation sector. Earlier in the year, Atfin GmbH was incorporated, 51% owned by Abbey Metal and 49% by Aerotech. This company will operate an etching line in Peissenberg, Germany and will service their major German aviation customers. The company is expected to be operational by the beginning of next year.

Our other engineering companies have had mixed results but the level of orders has recently started to increase.

Banking

The Duncan Lawrie marketing campaign has resulted in an increase in new accounts but the lack of any realistic margin on depositors' funds continues to adversely affect the results. A newly refurbished office has been opened in Bristol which provides services to targeted niche clients in the West Country. Lending opportunities are increasing and further capital has been made available to increase our share of the lending market. The asset management operation has performed well during the period, particularly with the increase in the equity market.

Prospects

Our agricultural operations are continuing to make a positive contribution to profits. The increasing costs of production remain a concern for the future. The continuation of this contribution is of course dependent on benign climatic conditions, reasonable sale prices and the continued political stability in the countries in which we operate, none of which can be guaranteed. The group has no net debt and remains in a strong financial position but, as usual, it is not possible to give any indication of the likely outcome for the full year.

M C Perkins

Chairman

29 August 2013

Interim management report

The chairman's statement forms part of this report and includes important events that have occurred during the six months ended 30 June 2013 and their impact on the financial statements set out herein.

Principal risks and uncertainties

The directors' report in the statutory financial statements for the year ended 31 December 2012 (the accounts are 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 chairman's statement 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' as adopted by the European Union, 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 Services Authority.

The directors of Camellia Plc are listed in the Camellia Plc statutory financial statements for the year ended 31 December 2012. Mr D A Reeves did not seek re-election at the annual general meeting. 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

M C Perkins

Chairman

29 August 2013

Consolidated income statement

for the six months ended 30 June 2013

			Six months		Six months		Year
			ended		ended		ended
			30 June		30 June		31 December
			2013		2012		2012
	Notes		£'000		£'000		£'000
					restated - see note 2		restated - see note 2
Revenue	4		113,753		110,389		261,529
Cost of sales			(79,367)		(78,753)		(166,859)
Gross profit			34,386		31,636		94,670
Other operating income			1,134		1,059		1,699
Distribution costs			(4,980)		(4,314)		(12,201)
Administrative expenses			(21,799)		(21,687)		(44,370)
Trading profit	4		8,741		6,694		39,798
Share of associates' results	6		445		2,229		4,269
Profit on non-current assets	7		-		994		1,538
Profit on disposal of available-for-sale investments			57		246		271
Profit on disposal of a subsidiary			-		-		396
Loss on transfer of an associate	6		-		-		(10,045)
(Loss)/gain arising from changes in fair value of    biological assets:
Excluding Malawi Kwacha exceptional gain	8		(23)		328		8,690
Malawi Kwacha exceptional gain	8		-		15,751		21,353
			(23)		16,079		30,043
Profit from operations			9,220		26,242		66,270
Investment income			1,159		578		1,186
Finance income			1,937		1,984		3,517
Finance costs			(424)		(304)		(825)
Net exchange gain			608		558		1,030
Net interest expense on employee benefit obligations			(570)		(503)		(1,468)
Net finance income	9		1,551		1,735		2,254
Profit before tax			11,930		28,555		69,710
Comprising
- headline profit before tax	5		12,466		11,739		48,975
- exceptional items, (loss)/gain arising from changes in fair value of biological assets and other financing gains and losses	5		(536)		16,816		20,735
			11,930		28,555		69,710
Taxation	10		(5,365)		(8,773)		(25,662)
Profit for the period			6,565		19,782		44,048
Profit attributable to:
Owners of the parent			4,359		14,300		31,210
Non-controlling interests			2,206		5,482		12,838
			6,565		19,782		44,048
Earnings per share - basic and diluted	12		156.9p		514.5p		1,122.9p

Statement of comprehensive income

for the six months ended 30 June 2013

	Six months		Six months		Year
	ended		ended		ended
	30 June		30 June		31 December
	2013		2012		2012
	£'000		£'000		£'000
			restated - see note 2		restated - see note 2
Profit for the period	6,565		19,782		44,048
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or   loss:
Remeasurements of post employment benefit obligations (note 17)	12,287		(4,390)		(6,085)
	12,287		(4,390)		(6,085)
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences	14,227		(21,320)		(36,155)
Release of exchange translation difference on transfer of associate	-		-		(3,998)
Release of other reserve movements on transfer of associate	-		-		2,817
Release of exchange translation difference on disposal of subsidiary	-		-		5
Available-for-sale investments:
Valuation gains/(losses) taken to equity	2,277		(13)		674
Transferred to income statement on sale	(31)		(5)		(4)
Share of other comprehensive expense of associates	-		(811)		(769)
Tax relating to components of other comprehensive income	-		-		(48)
	16,473		(22,149)		(37,478)
Other comprehensive income/(expense) for the period, net   of tax	28,760		(26,539)		(43,563)
Total comprehensive income/(expense) for the period	35,325		(6,757)		485
Total comprehensive income/(expense) attributable to:
Owners of the parent	30,957		(7,413)		(4,356)
Non-controlling interests	4,368		656		4,841
	35,325		(6,757)		485

Consolidated balance sheet

at 30 June 2013

		30 June		30 June		31 December
		2013		2012		2012
	Notes	£'000		£'000		£'000
Non-current assets
Intangible assets		7,300		7,549		7,413
Property, plant and equipment	13	97,865		93,438		93,483
Biological assets		128,246		115,767		119,693
Prepaid operating leases		977		965		910
Investments in associates	6	7,448		38,392		6,549
Deferred tax assets		332		154		314
Financial assets	6	56,768		29,716		50,501
Other investments		8,700		8,548		8,598
Retirement benefit surplus		740		427		678
Trade and other receivables		17,303		9,231		15,174
Total non-current assets		325,679		304,187		303,313
Current assets
Inventories		40,471		36,485		37,575
Trade and other receivables		74,840		69,867		72,257
Other investments		1,004		4,001		3,993
Current income tax assets		1,452		2,946		822
Cash and cash equivalents	14	266,688		273,903		262,174
		384,455		387,202		376,821
Assets classified as held for sale	15	-		5,037		-
Total current assets		384,455		392,239		376,821
Current liabilities
Borrowings	16	(11,740)		(11,059)		(5,590)
Trade and other payables		(238,097)		(257,638)		(235,636)
Current income tax liabilities		(8,248)		(5,455)		(5,542)
Employee benefit obligations	17	(1,187)		(335)		(409)
Provisions		(458)		(214)		(456)
		(259,730)		(274,701)		(247,633)
Liabilities classified as held for sale	15	-		(2,110)		-
Total current liabilities		(259,730)		(276,811)		(247,633)
Net current assets		124,725		115,428		129,188
Total assets less current liabilities		450,404		419,615		432,501
Non-current liabilities
Borrowings	16	(102)		(133)		(116)
Trade and other payables		(9,787)		(6,001)		(9,015)
Deferred tax liabilities		(36,923)		(32,723)		(36,225)
Employee benefit obligations	17	(19,626)		(30,476)		(32,866)
Other non-current liabilities		(105)		(108)		(107)
Provisions		(375)		(525)		(671)
Total non-current liabilities		(66,918)		(69,966)		(79,000)
Net assets		383,486		349,649		353,501
Equity
Called up share capital	18	283		284		284
Share premium		15,298		15,298		15,298
Reserves		325,823		296,110		298,228
Total shareholders' funds		341,404		311,692		313,810
Non-controlling interests		42,082		37,957		39,691
Total equity		383,486		349,649		353,501

Consolidated cash flow statement

for the six months ended 30 June 2013

		Six months		Six months		Year
		ended		ended		ended
		30 June		30 June		31 December
		2013		2012		2012
	Notes	£'000		£'000		£'000
Cash generated from operations
Cash flows from operating activities	19	(171)		6,251		41,162
Interest paid		(423)		(337)		(822)
Income taxes paid		(5,526)		(4,369)		(12,407)
Interest received		1,814		2,039		3,411
Dividends received from associates		206		750		1,275
Net cash flow from operating activities		(4,100)		4,334		32,619
Cash flows from investing activities
Purchase of intangible assets		(88)		(116)		(180)
Purchase of property, plant and equipment		(7,618)		(9,059)		(16,557)
Insurance proceeds for non-current assets		-		994		1,538
Proceeds from sale of non-current assets		352		400		429
Biological assets - new planting		(1,585)		(1,507)		(2,499)
Part disposal of a subsidiary		49		123		262
Disposal of a subsidiary		-		-		1,264
Purchase of non-controlling interests		-		(215)		(223)
Purchase of own shares		(925)		-		-
Proceeds from sale of investments		5,272		7,623		7,863
Purchase of investments		(2,864)		(7,213)		(8,339)
Income from investments		1,159		578		1,186
Net cash flow from investing activities		(6,248)		(8,392)		(15,256)
Cash flows from financing activities
Equity dividends paid		-		-		(3,224)
Dividends paid to non-controlling interests		(2,017)		(2,855)		(4,106)
New loans		39		370		154
Loans repaid		(55)		(282)		(230)
Finance lease payments		(27)		(114)		(190)
Net cash flow from financing activities		(2,060)		(2,881)		(7,596)
Net (decrease)/increase in cash and cash equivalents		(12,408)		(6,939)		9,767
Cash and cash equivalents at beginning of period		81,373		72,626		72,626
Exchange gains/(losses) on cash		2,976		236		(1,020)
Cash and cash equivalents at end of period		71,941		65,923		81,373
For the purposes of the cash flow statement, cash and cash equivalents are included net of overdrafts repayable on demand. These overdrafts are excluded from the definition of cash and cash equivalents disclosed on the balance sheet. For the purposes of the cash flow statement cash and cash equivalents comprise:

Cash and cash equivalents		266,688		273,903		262,174
Less banking operation funds		(183,087)		(197,651)		(175,302)
Overdrafts repayable on demand (included in current   liabilities -  borrowings)		(11,660)		(10,741)		(5,499)
Cash and cash equivalents included in assets held for sale		-		412		-
		71,941		65,923		81,373

Statement of changes in equity

for the six months ended 30 June 2013

							Non-
	Share	Share	Treasury	Retained	Other		controlling	Total
	capital	premium	shares	earnings	reserves	Total	interests	equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2012	284	15,298	(400)	264,659	41,751	321,592	40,115	361,707
Total comprehensive income/(expense) for    the period	-	-	-	9,094	(16,507)	(7,413)	656	(6,757)
Dividends	-	-	-	(2,335)	-	(2,335)	(2,855)	(5,190)
Non-controlling interest subscription	-	-	-	29	-	29	93	122
Acquisition of non-controlling interest	-	-	-	(162)	-	(162)	(52)	(214)
Share of associates' other equity movements	-	-	-	21	-	21	-	21
Loss on dilution of interest in associate	-	-	-	(40)	-	(40)	-	(40)
At 30 June 2012	284	15,298	(400)	271,266	25,244	311,692	37,957	349,649
At 1 January 2012	284	15,298	(400)	264,659	41,751	321,592	40,115	361,707
Total comprehensive income/(expense) for    the period	-	-	-	27,129	(31,485)	(4,356)	4,841	485
Dividends	-	-	-	(3,224)	-	(3,224)	(4,106)	(7,330)
Disposal of subsidiary	-	-	-	-	-	-	(1,333)	(1,333)
Non-controlling interest subscription	-	-	-	71	-	71	226	297
Acquisition of non-controlling interest	-	-	-	(171)	-	(171)	(52)	(223)
Share of associates' other equity movements	-	-	-	221	-	221	-	221
Loss on dilution of interest in associate	-	-	-	(323)	-	(323)	-	(323)
At 31 December 2012	284	15,298	(400)	288,362	10,266	313,810	39,691	353,501
Total comprehensive income/(expense) for    the period	-	-	-	16,616	14,341	30,957	4,368	35,325
Dividends	-	-	-	(2,446)	-	(2,446)	(2,017)	(4,463)
Own shares acquired in the period	(1)	-	-	(925)	1	(925)	-	(925)
Non-controlling interest subscription	-	-	-	8	-	8	40	48
At 30 June 2013	283	15,298	(400)	301,615	24,608	341,404	42,082	383,486

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 2013 (the "Interim Report"). They should be read in conjunction with the Report and Accounts (the "Annual Report") for the year ended 31 December 2012.

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 2012 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 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 Interpretations Committee ("IFRIC") that have been adopted by the European Union.

Where necessary, the comparatives have been reclassified from the previously reported interim results to take into account any presentational changes made in the Annual Report.

These interim condensed financial statements were approved by the board of directors on 29 August 2013. 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	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 2012. In addition, the group has implemented the following new and revised standards and interpretations:

IAS 1 (amendment)	Financial statement presentation
IAS 19 (revised)	Employee benefits
IFRS 13	Fair value measurement

A summary of each of the above standards and interpretations was provided on page 35 of the 2012 Annual Report. The adoption of IAS 1 and IFRS 13 has had no material impact on the group's results, assets and liabilities.

IAS 19 (revised) amends the accounting for employment benefits. The group has applied the standard retrospectively in accordance with the transition provisions of the standard and the comparative figures have been restated. The impact on the group has been in the following areas:

The standard requires that only administrative costs relating to the cost of managing plan assets can be deducted from the actual return on assets. This has no effect on total comprehensive income as the increased charge in profit or loss is offset by a credit in other comprehensive income. The effect has been that the income statement charge for the period to 30 June 2012 has increased by £91,000 and for the year to 31 December 2012 has increased by £171,000.

The standard replaces the interest cost on the defined benefit obligation and the expected return on plan assets with a net interest cost based on the net defined benefit asset or liability and the discount rate, measured at the beginning of the year. There is no change to determining the discount rate, this continues to reflect the yield on high-quality corporate bonds. This has increased the income statement charge as the discount rate applied to assets is lower than the expected return on assets. This has no effect on total comprehensive income as the increased charge in the income statement is offset by a credit in other comprehensive income. The effect has been that the income statement charge for the period to 30 June 2012 has increased by £429,000 and for the year to 31 December 2012 has increased by £853,000.

The effect of the change in accounting policy is to decrease earnings per share from 533.2p to 514.5p for the period 30 June 2012 and from 1,190.4p to 1,122.9p for the year to 31 December 2012, the effect on the cash flow statement is immaterial.

3	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 and maize in Brazil are generally harvested in the first half of the year. In California the pistachio crop occurs in the second half of the year and has 'on' and 'off' years. 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.

4	Segment reporting

	Six months		Six months		Year
	ended		ended		ended
	30 June		30 June		31 December
	2013		2012		2012
	Revenue	Trading profit	Revenue	Trading profit	Revenue	Trading profit
	£'000	£'000	£'000	£'000	£'000	£'000
				restated		restated
Agriculture and horticulture	75,851	11,827	73,620	8,616	187,538	45,495
Engineering	14,568	(976)	13,990	(165)	27,675	(6)
Food storage and distribution	15,264	365	15,806	203	32,195	127
Banking and financial services	7,026	(24)	6,216	249	12,551	253
Other operations	1,044	32	757	(12)	1,570	62
	113,753	11,224	110,389	8,891	261,529	45,931
Unallocated corporate    expenses*		(2,483)		(2,197)		(6,133)
Trading profit		8,741		6,694		39,798
Share of associates' results		445		2,229		4,269
Profit on non-current assets		-		994		1,538
Profit on disposal of available   for-sale investments		57		246		271
Profit on disposal of a   subsidiary		-		-		396
Loss on transfer of an    associate		-		-		(10,045)
(Loss)/gain arising from   changes in fair value of   biological assets		(23)		16,079		30,043
Investment income		1,159		578		1,186
Net finance income		1,551		1,735		2,254
Profit before tax		11,930		28,555		69,710
Taxation		(5,365)		(8,773)		(25,662)
Profit after tax		6,565		19,782		44,048

Agriculture and horticulture trading profit includes exchange gains of £nil (2012: six months £1,756,000 - year £2,289,000) following the devaluation of the Malawian Kwacha.

*Unallocated corporate expenses include group marketing expenses of £487,000 (2012: six months £303,000 - year £1,162,000) incurred on behalf of the banking and financial services and agriculture and horticulture segments.

5	Headline profit

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 'headline' and is used by management to measure and monitor performance.

The following items have been excluded from the headline measure:

-	Exceptional items, including profit and losses from disposal of non-current assets and available-for-sale investments.

-	Gains and losses arising from changes in fair value of biological assets, which are a non-cash item, and the directors believe should be excluded to give a better understanding of the group's underlying performance.

-	Net interest expense on employee benefit obligations.

	Six months		Six months		Year
	ended		ended		ended
	30 June		30 June		31 December
	2013		2012		2012
	£'000	£'000	£'000	£'000	£'000	£'000
			restated	restated	restated	restated
Trading profit		8,741		6,694		39,798
Share of associates' results		445		2,229		4,269
Investment income		1,159		578		1,186
Net finance income	1,551		1,735		2,254
Exclude
- Net interest expense on employee    benefit obligations	570		503		1,468
Headline finance costs		2,121		2,238		3,722
Headline profit before tax		12,466		11,739		48,975
Non-headline items in profit before   tax comprise:
Exceptional items
Profit on non-current assets	-		994		1,538
Profit on disposal of available-for-sale   investments	57		246		271
Profit on disposal of a subsidiary	-		-		396
Loss on transfer of an associate	-		-		(10,045)
		57		1,240		(7,840)
(Loss)/gain arising from changes in   fair value of biological assets		(23)		16,079		30,043
Net interest expense on employee   benefit obligations		(570)		(503)		(1,468)
Non-headline items in profit before   tax		(536)		16,816		20,735

6	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
	2013	2012	2012
	£'000	£'000	£'000
Operating profit	793	2,622	4,857
Net finance costs	-	(25)	(114)
Profit before tax	793	2,597	4,743
Taxation	(348)	(368)	(474)
Profit after tax	445	2,229	4,269

At 31 December 2012, the group re-evaluated its relationship with BF&M Limited. Although the group's holding is in excess of 20%, the directors concluded that the group is no longer able to exercise significant influence due to the cumulative result of, inter alia, the composition of the board of BF&M and the inability of the group to be a party to important strategic decisions concerning the operations and development of BF&M. Accordingly the group's holding has been accounted for as an available-for-sale financial asset with effect from 1 January 2013. In conjunction with the reclassification the investment was written down to current market value at 31 December 2012 giving rise to an exceptional charge in the Income Statement for the year ended 31 December 2012 of £10,045,000.

7	Profit on non-current assets

In 2012 a profit of £1,538,000 (six months to 30 June 2012: £944,000) was realised following part recovery of insurance claims received in relation to the property, plant and equipment destroyed by the fire in 2011 at one of the tea processing factories owned by Eastern Produce Malawi Limited.

8	Gain arising from changes in fair value of biological assets

In 2012 the Malawian kwacha depreciated in value from 254.49 to the pound sterling at 1 January 2012 to 544.05 to the pound sterling at 31 December 2012 (30 June 2012: 423.39). The functional currency of our Malawian subsidiaries is the kwacha. Our principal assets in Malawi are our agricultural assets. As they generate revenues in currencies other than the kwacha their value in hard currency has not fallen in the year. Accordingly, the revaluation of the agricultural assets in kwacha under IAS 41 at 31 December 2012 generated a credit of £21,353,000 (six months to 30 June 2012: £15,751,000) due to the currency devaluation which is included in the overall gain of £30,043,000 (six months to 30 June 2012: £16,079,000) credited to the income statement. This has been largely offset by a foreign exchange translation loss charged to reserves. No such amounts occurred in the period ending 30 June 2013.

9	Finance income and costs

	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2013	2012	2012
	£'000	£'000	£'000
		restated	restated
Interest payable on loans and bank overdrafts	(424)	(292)	(808)
Interest payable on obligations under finance leases	-	(12)	(17)
Finance costs	(424)	(304)	(825)
Finance income - interest income on short-term bank deposits	1,937	1,984	3,517
Net exchange gain on foreign currency balances	608	558	1,030
Net interest expense on employee benefit obligations	(570)	(503)	(1,468)
Net finance income	1,551	1,735	2,254

The above figures do not include any amounts relating to the banking subsidiaries.

10	Taxation on profit on ordinary activities

	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2013	2012	2012
	£'000	£'000	£'000
Current tax
Overseas corporation tax	7,005	5,104	15,505
Deferred tax
Origination and reversal of timing differences
Overseas deferred tax	(1,640)	3,669	10,157
Tax on profit on ordinary activities	5,365	8,773	25,662

Tax on profit on ordinary activities for the six months to 30 June 2013 has been calculated on the basis of the estimated annual effective rate for the year ending 31 December 2013.

11	Equity dividends

	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2013	2012	2012
	£'000	£'000	£'000
Amounts recognised as distributions to equity holders in the   period:
Final dividend for the year ended 31 December 2012 of
88.00p (2011: 84.00p) per share	2,446	2,335	2,335
Interim dividend for the year ended 31 December 2012 of   32.00p per share			889
			3,224
Dividends amounting to £55,000 (2012: six months £52,000 - year £73,000) 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    2013 of 34.00p (2012: 32.00p) per share	942	889

The proposed interim dividend was approved by the board of directors on 29 August 2013 and has not been included as a liability in these financial statements.

12	Earnings per share (EPS)

	Six months		Six months		Year
	ended		ended		ended
	30 June		30 June		31 December
	2013		2012		2012
	Earnings	EPS	Earnings	EPS	Earnings	EPS
	£'000	Pence	£'000	Pence	£'000	Pence
			restated	restated	restated	restated
Basic and diluted EPS
Attributable to ordinary shareholders	4,359	156.9	14,300	514.5	31,210	1,122.9

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 2,778,775 (2012: six months 2,779,500 - year 2,779,500), which excludes 62,500 (2012: 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 2013 the group acquired assets with a cost of £7,618,000 (2012: six months £9,059,000 - year £16,557,000). Assets with a carrying amount of £212,000 were disposed of during the six months ended 30 June 2013 (2012: six months £66,000 - year £182,000).

14	Cash and cash equivalents

Included in cash and cash equivalents of £266,688,000 (2012: six months £273,903,000 - year £262,174,000) are cash and short-term funds, time deposits with banks and building societies and certificates of deposit amounting to £183,087,000 (2012: six months £197,651,000 - year £175,302,000), which are held by banking subsidiaries and which are an integral part of the banking operations of the group.

15	Assets/liabilities held for sale

The assets and liabilities held for sale at 30 June 2012 related to the assets and liabilities of Siret Tea Company Limited, which was disposed of by the group on 31 August 2012.

16	Borrowings

Borrowings (current and non-current) include loans and finance leases of £182,000 (2012: six months £451,000 - year £207,000) and bank overdrafts of £11,660,000 (2012: six months £10,741,000 - year £5,499,000). The following loans and finance leases were issued and repaid during the six months ended 30 June 2013:

	£'000
Balance at 1 January 2013	207
Exchange differences	18
New issues
Loans	39
Repayments
Loans	(55)
Finance lease liabilities	(27)
Balance at 30 June 2013	182

17	Retirement benefit schemes

The UK defined benefit pension scheme for the purpose of IAS 19 has been updated to 30 June 2013 from the valuation as at 31 December 2012 by the actuary and the movements have been reflected in this interim statement. Overseas schemes have not been updated from 31 December 2012 valuations as it is considered that there have been no significant changes.

An actuarial gain of £12,287,000 was realised in the period, of which a gain of £7,205,000 was realised in relation to the scheme assets and a gain of £5,082,000 was realised in relation to changes in the underlying actuarial assumptions. The assumed discount rate has increased to 4.60% (31 December 2012: 4.20%), the assumed rate of inflation (CPI) has increased to 2.30% (31 December 2012: 2.00%) and the assumed rate of increases for salaries to 2.30% (31 December 2012: 2.00%). There has been no change in the mortality assumptions used.

18	Share Capital

	30 June	30 June	31 December
	2013	2012	2012
	£'000	£'000	£'000
Authorised: 2,842,000 (2012: 30 June 2,842,000
- 31 December 2,842,000) ordinary shares of 10p each	284	284	284
Allotted, called up and fully paid: ordinary shares of 10p each:
At 1 January - 2,842,000 (2012: 2,842,000) shares	284	284	284
Purchase of own shares - 10,192 (2012: nil) shares	(1)	-	-
At 30 June - 2,831,808 (2012: 30 June 2,842,000
- 31 December 2,842,000) shares	283	284	284

Group companies hold 62,500 issued shares in the company. These are classified as treasury shares.

On 6 June 2013 the directors were authorised to purchase up to a maximum of 277,950 ordinary shares and during the period 10,192 shares were purchased. Upon cancellation of the shares purchased, a capital redemption reserve is created representing the nominal value of the shares cancelled.

19	Reconciliation of profit from operations to cash flow

	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2013	2012	2012
	£'000	£'000	£'000
		restated	restated
Profit from operations	9,220	26,242	66,270
Share of associates' results	(445)	(2,229)	(4,269)
Depreciation and amortisation	4,890	4,951	9,646
Impairment of non-current assets	-	-	440
Loss/(gain) arising from changes in fair value of biological   assets	23	(16,079)	(30,043)
Profit on non-current assets	(141)	(1,124)	(1,786)
Loss on transfer of an associate	-	-	10,045
Profit on disposal of a subsidiary	-	-	(396)
Profit on disposal of investments	(57)	(246)	(271)
Pensions and similar provisions less payments	(871)	(981)	(1,294)
Biological assets capitalised cultivation costs	(4,378)	(4,131)	(6,917)
Biological assets decreases due to harvesting	4,682	5,032	9,158
Decrease/(increase) in working capital	502	(2,071)	(10,336)
Net (increase)/decrease in funds of banking subsidiaries	(13,596)	(3,113)	915
	(171)	6,251	41,162

20	Reconciliation of net cash flow to movement in net cash

	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2013	2012	2012
	£'000	£'000	£'000
(Decrease)/increase in cash and cash equivalents in the period	(12,408)	(6,939)	9,767
Net cash outflow from decrease in debt	43	26	266
(Decrease)/increase in net cash resulting from cash flows	(12,365)	(6,913)	10,033
Exchange rate movements	2,958	238	(1,014)
(Decrease)/increase in net cash in the period	(9,407)	(6,675)	9,019
Net cash at beginning of period	81,166	72,147	72,147
Net cash at end of period	71,759	65,472	81,166

21	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.

Further enquiries please contact Camellia Plc

Malcolm Perkins

01622 746655

29 August 2013

 

END

 

 

IR PPMJTMBBTBTJ