Final Results

Camellia PLC 27 April 2006 Camellia Plc Preliminary Results For Year Ended 31 December 2005 Highlights from the results:- Year ended Year ended 31 December 31 December 2005 2004 Â£'000 Â£'000 Revenue - continuing operations 152,743 156,288 Profit before tax 22,275 8,013 Profit for the period 23,569 6,642 Earnings per share 793.2 p 217.8 p Dividends 89 p 88 p Chairman's statement The accounts for 2005 reflect a number of significant changes both in the composition of the group and those arising from compliance with International Financial Reporting Standards. In November 2005, Camellia acquired the outstanding minority shareholding in Linton Park Plc resulting in a gain of Â£6.53 million partially offset by expenses of Â£1 million. Profits on the disposal of investments, fixed assets and shares in a subsidiary company amounted to Â£4.16 million and there was a gain arising from changes in the fair value of biological assets of Â£4.15 million. The profit before tax of Â£22.28 million including the above mentioned items, compares with a re-stated profit of Â£8.01 million for 2004. In addition, the profit for the period includes a net exceptional gain of Â£3.06 million following the disposal of the group's interest in its Australian citrus operations and the resultant post tax profit attributable to shareholders of Â£20.33 million compares with Â£5.52 million in 2004. Earnings per share increased to 793.2p from 217.8p. As stated above, part of the earnings includes a gain arising from changes in the value of biological assets. In my statement last year I expressed my concerns about including such amounts in the income statement and nothing has occurred over the last year to alleviate such concerns. We will continue to identify these changes in fair value on the face of the income statement and my advice to shareholders is to view such changes, whether they be increases or reductions, with extreme caution and not to rely on them when assessing the performance or value of the company. Dividend The board is recommending a final dividend of 69p per share which, together with the interim dividend already paid of 20p per share, brings the total distribution for the year to 89p per share compared with 88p per share in respect of 2004. Agriculture and horticulture Tea India Our operations in India produced a crop of 26.16 million kgs which was approximately 1 million kgs ahead of the previous year despite the loss of 1.3 million kgs due to a strike in the Dooars during the peak producing month of July. Prices generally continued to be depressed and the market was adversely affected by lower exports and a substantial drop in the orthodox market as a result of a decline in sales to Iran. Our continuing emphasis on quality enabled us to maintain our position as a premium supplier to the market. The Goodricke School for Special Education at Siliguri, gifted by The Camellia Foundation, was formally opened on 11 April 2006 having moved from rented accommodation to a fine new purpose-built school. Bangladesh Production in Bangladesh at 13.25 million kgs was marginally ahead of last year with prices increasing by an average of 20 per cent.. This resulted in a good contribution to profits for the year. Replanting of old areas of tea continued through the year and this will be an on-going exercise for a number of years to come. A recent decline in the security situation in the country gives some cause for concern but as yet no problems have been encountered on the tea gardens. Africa Production in Africa of 30.8 million kgs was some 5 million kgs below the levels achieved in 2004. The drought in East Africa started to impact on Kenyan production towards the end of the year. Prices achieved in the year were on average 15 US cents per kg below those in 2004 with the reduction being exacerbated by the strength of the Kenyan shilling resulting in an adverse effect on profit margins. The drought continued into the first part of 2006 leading to a significant increase in prices. Such increase is however not sufficient to cover the increased cost of production. Our shareholding in Eastern Produce Kenya reduced to 70 per cent. during the year following the sale of a further 8 per cent. to the existing minority shareholder. This transaction resulted in a profit of Â£795,000. In Malawi, the tea operations managed only to break even for the year. No significant rain fell between March and late November. This drought, one of the worst on record, resulted in production being well below 2004 levels and prices were some 8 US cents lower than the previous year. Good rains were however received in December 2005, and although some young tea areas have been lost as a result of the drought, production is returning to more normal levels. In South Africa slow progress is being made with the disposal of the assets located on the estates which were closed during 2004. The sale of one estate, which was not subject to a land claim, has been completed and the level of compensation to be received for another estate has been agreed with the Land Claims Commission. It is hoped to have resolved all issues surrounding the remaining estates during 2006. Nepal The political situation in Nepal continues to give serious cause for concern and the future of our small investment in Himalaya Goodricke Private Limited is under consideration. Citrus The citrus operations in both Chile and South Africa performed disappointingly in 2005 with wet weather and pest problems resulting in poor pack outs for export. Excellent results were achieved from the new development in California and we are presently expanding this operation to utilise available land and water resources. Edible nuts A better than expected 'off-year' crop was achieved from our pistachio orchards in California and good prices were attained. Our macadamia production in both South Africa and Malawi showed a considerable improvement over the previous year and prices remained strong resulting in most satisfactory profits. However the outlook for 2006 is not as promising as both countries suffered drought conditions during the period of flowering which has resulted in a lower fruit set. In addition, market demand has weakened and prices are expected to be lower. Other horticulture Table grape production in South Africa was well below expectations due to adverse weather conditions particularly at the time of flowering. We decided to lessen our investment in this sector and therefore sold one of our two table grape properties in 2005. In Chile production levels increased as the orchards became more mature. Income was adversely affected by the strengthening of the local currency. Wine grape production in Chile and South Africa was satisfactory. Prices in Chile were considerably ahead of the previous year due to the increasing maturity of our vines but the global market remains very competitive. There are however tentative signs that demand for our South African wines is improving. The avocado crop in Kenya was slightly below the levels achieved in 2004 but good prices were received for our exports although once again the strength of the Kenyan shilling had a negative impact on income. Good progress is being made with the building of the new avocado pack house, which is expected to be operational in 2006. The pineapple joint venture in Kenya again made a significant contribution to profits. The existing agreement expires in stages up to 2008 but negotiations to enter into a new agreement have been unsuccessful. In view of this, a development plan is being prepared for alternative use of the land presently occupied by pineapples. Rubber production in Bangladesh again showed a small improvement and when combined with higher prices, produced a good contribution to profits. Newly installed drying facilities are helping to control the cost of production. Our farming operations in Brazil were affected by dry weather, poor commodity prices and the strength of the local currency. Nonetheless a small operational profit was achieved which together with investment income produced a worthwhile result albeit at a lower level than the previous year. Food storage and distribution As a result of the loss of a major contract at the beginning of 2005 Associated Cold Stores and Transport had another disappointing year. The markets and locations in which the company operates remain very competitive with continued downward pressure on transport, cold storage and handling rates. In addition, increasing energy and fuel costs have affected the results. Further controllable cost reductions have taken place and space utilisation rates improved marginally during the year. Affish's results in The Netherlands were slightly better than last year but the fish trading business is still suffering from very tight margins. Wylax's fish distribution business showed a modest improvement but there has not been any meaningful recovery in the Dutch restaurant sector. Engineering The buoyant oil and gas sector has had a positive impact on the results of AJT Engineering in Aberdeen, where demand for its BOP (blow out preventor) repairs and new build service is strong. The cold extrusion business continues to expand. Losses on a large contract undertaken by AKD in Lowestoft produced another disappointing result, notwithstanding the site operating close to full capacity. The management team is being restructured in order that the company can take advantage of increased activity in the southern sector of the North Sea. Abbey Metal Finishing achieved further important accreditations during the year which are necessary for it to operate in the aerospace sector. The company produced satisfactory operating profits and demand for its services continues to grow. The galvanizing business of British Metal Treatments and the profile cutting and precision grinding business of General Utilities both produced good results for the year. Banking and financial services The Duncan Lawrie private banking group experienced significant growth during the year and produced a profit 23 per cent. above last year. The acquisition of the investment management business of Douglas Deakin Young has to date met our expectations in full. We hope to build on this area of our business whilst at the same time enhancing the other activities of the bank in offering integrated wealth management. Pharmaceuticals Following a strong second half year, the Siegfried group reported sales of CHF 318.3 million for 2005. Consolidated net profit increased from CHF 16.4 million in 2004 to CHF 36.5 million in 2005. The sales increase is due mainly to an improvement in the Siegfried Division's core business of manufacturing active pharmaceutical ingredients. Satisfactory results were also achieved in the markets for generics and biologically produced active ingredients. The Sidroga division also reported improved sales and operating results. Other associated undertakings and investments The United Leasing Company Limited in Bangladesh produced profits before tax of Â£2.30 million compared with Â£2.64 million in 2004. This reduction in profits is largely due to increased competition. Also, in Bangladesh where the insurance market remains competitive, The United Insurance Company Limited produced results similar to last year. Its subsidiary, The Surmah Valley Tea Company Limited improved its profit for the year. Our investments in Bermuda and elsewhere are now shown in the balance sheet at market value rather than cost in accordance with International Financial Reporting Standards. The underlying investments performed well in 2005 and investment income increased. Development Organic growth will continue on the majority of our agricultural properties as will improvements to infrastructure and welfare facilities. Where assets are in need of development to maintain their value and effectiveness we are making the necessary improvements, such as in some of our tea factories in India and by replanting areas of tea that are in decline through old age. Support is also given to the growth of those activities where there are attractive opportunities for extending and expanding those operations, such as at Duncan Lawrie and the galvanising business of British Metal Treatments. Developing our management structures to ensure they remain efficient and effective is also an ongoing process and is currently being pursued further as a result of the merger with Linton Park. Pensions The group operates a number of defined benefit pension schemes, and in common with the majority of such schemes in the UK, the group's UK schemes are in deficit. The combined deficits have previously been an off-balance sheet item, but as a result of new accounting regulations have now become an on-balance sheet liability. The newly appointed Pensions Regulator has wide powers over companies with pension scheme deficits that could hinder those companies from making normal commercial decisions. Whether such draconian powers are appropriate is a matter for debate but what seems incomprehensible is that the funding of the Pension Protection Fund penalises those schemes that are already in deficit making an unfortunate situation even worse. Leaving aside the power of the Pensions Regulator and the impact he can have on the way in which a company is managed, one feels a sense of enormous frustration at the manner in which defined benefit schemes have been targeted in such a way as to make them virtually untenable. It is, after all, not so long ago that actuaries were busy calculating the improved benefits that could be given, or contribution holidays taken, to utilise surpluses that would otherwise, at the government's behest, have to be returned to sponsoring companies and then taxed. Companies operating rationally were not therefore permitted to maintain reasonable pension fund surpluses for the time when circumstances changed. And change they certainly did. Firstly, advance corporation tax credits were removed from pension scheme investment income and then equity market values fell significantly. This has more recently been exacerbated by the lemming-like rush, particularly by pension funds driven to do so in part by changes in the regulatory environment, into bonds (the wisdom of which is at last being challenged by serious commentators). This has forced up bond prices and forced down bond yields, a key measure used by actuaries to calculate a pension fund's liabilities - the lower the real yield the greater the liability. In addition, life expectancy has grown rapidly which has forced actuaries to change another of the key assumptions they use to value pension schemes' liabilities. Suddenly schemes faced large deficits which, as a result of the change in the accounting rules, have had a significant impact on employers' balance sheets. The unpredictability of such changes to actuarial assumptions and the resultant movement in pension schemes' deficits together with the fact that the Pensions Regulator requires deficits to be paid off over a far shorter period than previously recommended by the actuaries (leading to companies facing a bill that could easily render them uncompetitive in their market place) has sounded the death knell of many defined benefit schemes. Based on this experience, companies might well feel that, even if they sort out the present situation, it could all so easily happen again. Thus we see the frequent press coverage of UK employers making significant changes to their occupational pension schemes. Full actuarial valuations of two of our schemes are taking place in 2006 and despite the rise in equity markets we nonetheless expect contribution rates to increase. It would be a great pity, particularly for scheme members, if our own defined benefit schemes are closed as a result of assumptions that subsequently could be found to be inaccurate or based on short term distortions. However, we cannot place the group in jeopardy and consequently we will over the next few months be reviewing in great depth our ability to continue with defined benefit schemes in their current form. I can only hope that common sense, which sometimes to the layman seems to be missing, will in the end prevail. Corporate social responsibility During 2005 the board adopted a Statement of Business Principles which encapsulates the standards to which the group's businesses operate. The Statement, which can be viewed on the company's website (www.camellia.plc.uk), sets out the group's policy on business integrity, health and safety, environmental matters and social issues and human resources. Next year's accounts will include a business review as required by recent legislation which will cover these areas in detail. Directors and staff I am pleased to welcome Chris Relleen to the board as deputy chairman and as an independent non-executive director. Chris will bring a wealth of experience and expertise and will I am sure make a significant contribution to our deliberations. Abu Subhan will be retiring as a director at the conclusion of the forthcoming annual general meeting. Abu has been responsible for the redevelopment of the group's interests in Bangladesh and has improved their profitability with great care and vision. His contribution has been immense and I wish him a long, happy and healthy retirement. 2005 has been a successful year in many ways and this could not have been achieved without the skill and dedication of our staff who not only have to deal with the day to day operations but also comply with increasing regulatory requirements. M C Perkins Chairman 27 April 2006 Consolidated income statement for the year ended 31 December 2005 2005 2004 Notes Â£'000 Â£'000 Continuing operations Revenue 2 152,743 156,288 Cost of sales (107,968) (112,498) ------------- ------------ Gross profit 44,775 43,790 Other operating income 2,373 955 Distribution costs (7,969) (7,337) Administrative expenses (35,978) (33,941) ------------- ------------ Trading profit 2 3,201 3,467 Share of associates' results 5,842 2,924 Profit on disposal of non-current assets 874 1,283 Profit on disposal of 'available-for-sale' investments 2,488 844 Profit on part disposal of a subsidiary 795 - Profit on part disposal of an associate - 121 Gain arising from changes in fair value of biological assets 4,147 1,722 Gain/(loss) on group restructuring 3 5,523 (1,634) ------------- ------------ Profit from operations 22,870 8,727 Investment income 1,313 1,447 Net finance costs (1,908) (2,161) ------------- ------------ Profit before tax 22,275 8,013 Taxation (1,764) (2,741) ------------ ------------ Profit for the period from continuing operations 20,511 5,272 Discontinued operations Profit for the period from discontinued operations 2 3,058 1,370 ------------ ------------ Profit for the period 23,569 6,642 ------------ ------------ Profit attributable to minority interests 3,243 1,127 Profit attributable to equity shareholders' 20,326 5,515 ------------ ------------ 23,569 6,642 ------------ ------------ Earnings per share - basic and diluted 5 793.2p 217.8p Earnings per share from continuing operations - basic and diluted 5 692.2p 194.4p Consolidated balance sheet at 31 December 2005 2005 2004 Â£'000 Â£'000 Non-current assets Goodwill 4,220 - Intangible assets 368 398 Property, plant and equipment 82,069 82,813 Biological assets 86,679 79,805 Prepaid operating leases 1,062 876 Investments in associates 65,672 60,689 Deferred tax assets 1,330 691 Financial assets 61,831 43,371 Retirement benefit surplus 2,634 3,212 Trade and other receivables 583 756 ------------ ----------- Total non-current assets 306,448 272,611 ------------ ----------- Current assets Inventories 18,204 20,918 Trade and other receivables 50,699 50,606 Current income tax assets 1,820 1,699 Cash and cash equivalents 170,940 150,857 ------------ ----------- 241,663 224,080 Non-current assets classified 1,036 11,157 as held for sale ------------ ----------- Total current assets 242,699 235,237 ------------ ----------- Current liabilities Borrowings (21,234) (28,282) Trade and other payables (201,779) (166,484) Deferred income from anticipated sale - (3,591) Current income tax liabilities (1,888) (2,132) Other employee benefit obligations (190) (213) Provisions (88) (506) ------------ ----------- Total current liabilities (225,179) (201,208) ------------ ----------- Net current assets 17,520 34,029 ------------ ----------- Total assets less current liabilities 323,968 306,640 Non-current liabilities Borrowings (10,959) (20,541) Deferred tax liabilities (27,061) (26,246) Retirement benefit obligations (21,284) (26,290) Other employee benefit obligations (1,399) (1,277) Other non-current liabilities (353) (436) Provisions (70) (113) ------------- ----------- Total non-current liabilities (61,126) (74,903) ------------- ----------- Net assets 262,842 231,737 ------------- ----------- Equity Called up share capital 284 260 Reserves 241,632 187,229 ------------- ----------- Shareholders' funds 241,916 187,489 Minority interests 20,926 44,248 ------------- ----------- Total equity 262,842 231,737 ------------- ----------- Consolidated cash flow statement for the year ended 31 December 2005 2005 2004 Notes Â£'000 Â£'000 Cash generated from operations Cash flows from operating activities 6 20,753 11,401 Interest paid (2,551) (2,785) Income taxes paid (3,435) (2,552) Interest received 635 265 Dividends received from associates 1,564 2,149 ---------- ---------- Net cash flow from continuing operating activities 16,966 8,478 Net cash flow from discontinued operating activities 1,730 6,330 ---------- ---------- Net cash flow from operating activities 18,696 14,808 Cash flows from investing activities Purchase of intangible assets (105) (70) Purchase of property, plant and equipment (6,844) (5,328) Proceeds from sale of non-current assets 2,418 2,244 Disposal of subsidiaries/businesses (net of cash disposed) 7 12,883 540 Part disposal of a subsidiary 1,673 - Acquisition of subsidiary (net of cash acquired) 7 (4,393) (52) Purchase of minority interests (3,027) (482) Purchase of shares in associate (16) - Proceeds from sale of shares in associates - 1,075 Proceeds from sale of investments 3,200 2,589 Purchase of investments (7,141) (3,579) Income from investments 1,313 1,374 Net cash flow from discontinued operations (1,430) (725) ---------- ---------- Net cash flow from investing activities (1,469) (2,414) Cash flows from financing activities Equity dividends paid (2,284) (2,258) Dividends paid to minority interests (1,306) (1,871) Net repayment of debt (9,213) (5,328) Purchase of own shares - (16) Net cash flow from discontinued operations - (3,879) ---------- ---------- Net cash flow from financing activities (12,803) (13,352) ---------- ---------- Net increase/(decrease) in cash and cash equivalents 4,424 (958) Cash and cash equivalents at beginning of period (10,637) (9,946) Exchange (losses)/gains on cash (222) 267 ---------- ---------- Cash and cash equivalents at end of period (6,435) (10,637) ---------- ---------- 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. Statement of recognised income and expense for the year ended 31 December 2005 2005 2004 Â£'000 Â£'000 Foreign exchange translation differences 12,725 (7,826) Actuarial movement on defined benefit pension schemes 4,310 (7,420) Movement on deferred tax relating to defined benefit pension schemes 1,204 (244) Available-for-sale investments: Valuation gains taken to equity 7,124 5,070 Transferred to profit or loss on sale (1,562) (669) Other fair value adjustment 135 (49) Share of associate's fair value adjustments (45) 169 Share of associate's loss on cash flow hedges (585) - ----------- ----------- Net income/(expense) recognised directly in equity 23,306 (10,969) Profit for the period 23,569 6,642 ----------- ----------- Total recognised income and expense for the period 46,875 (4,327) ----------- ----------- Attributable to: Minority interests 5,767 (1,777) Equity shareholders' 41,108 (2,550) ----------- ----------- 46,875 (4,327) ----------- ----------- Notes 1 General information The consolidated income statement, consolidated balance sheet, consolidated cash flow statement, consolidated statement of recognised income and expense and extracts from the notes to the accounts for 31 December 2005 and 31 December 2004 do not constitute the group's Annual Report and Accounts. The auditors have reported on the group's statutory accounts for each of the years 2005 and 2004 under section 235 of the Companies Act 1985, which do not contain statements under sections 237 (2) or (3) of the Companies Act and are unqualified. The statutory accounts for 2004 under UK GAAP have been delivered to the Registrar of Companies and the statutory accounts for 2005 will be filed with the Registrar in due course. Copies of the Annual Report and Accounts will be posted to shareholders on 5 May 2006. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. Details of the accounting policies applied to these financial statements were published in the group interim financial statements on 28 September 2005. 2 Business and geographical segments The principal activities of the group are as follows: Agriculture and horticulture Engineering Food storage and distribution Banking and financial services For management reporting purposes these activities form the basis on which the group reports its primary divisions. Segment information about these businesses is presented below: 2005 Agriculture Engineering Food storage Banking and Other Consolidated and and financial operations horticulture distribution services 2005 2005 2005 2005 2005 2005 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue External sales 83,861 19,441 38,734 9,350 1,357 152,743 -------- -------- --------- -------- -------- ----------- Trading profit Segment profit 6,506 223 (1,004) 1,303 339 7,367 -------- -------- --------- -------- -------- Unallocated corporate expenses (4,166) ----------- Trading profit 3,201 Share of associates' results 68 560 5,214 5,842 Profit on disposal of non-current assets 874 Profit on disposal of 'available-for-sale' investments 2,488 Profit on part disposal of a subsidiary 795 Gain arising from changes in fair value of biological assets 4,147 4,147 Gain/(loss) on group restructuring 5,523 Investment income 1,313 Net finance costs (1,908) ----------- Profit before tax 22,275 Taxation (1,764) Profit for the period from discontinued operations 3,058 ----------- Profit after tax and discontinued operations 23,569 ----------- Other information Segment assets 164,534 14,406 29,850 193,716 7,997 410,503 Investment in associates 1,052 2,781 61,839 65,672 Unallocated assets 72,972 ----------- Consolidated total assets 549,147 ----------- Segment liabilities (28,105) (4,016) (7,406) (177,361) (135) (217,023) Unallocated liabilities (69,282) ----------- Consolidated total liabilities (286,305) ----------- Capital expenditure 4,423 461 1,338 366 44 Depreciation (2,956) (837) (2,910) (234) (108) Amortisation (15) (11) - (78) - Impairment (111) (179) - - - 2004 Agriculture Engineering Food storage Banking and Other Consolidated and and financial operations horticulture distribution services 2005 2005 2005 2005 2005 2005 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue External sales 92,650 13,684 42,007 6,611 1,336 156,288 -------- -------- --------- -------- -------- ----------- Trading profit Segment profit 7,822 (582) (682) 1,059 478 8,095 -------- -------- --------- -------- -------- Unallocated corporate expenses (4,628) ----------- Trading profit 3,467 Share of associates' results 8 412 2,504 2,924 Profit on disposal of non-current assets 1,283 Profit on disposal of 'available-for-sale' investments 844 Profit on part disposal of an associate 121 Gain arising from changes in fair value of biological assets 1,722 1,722 Gain/(loss) on group restructuring (1,634) Investment income 1,447 Net finance costs (2,161) ----------- Profit before tax 8,013 Taxation (2,741) Profit for the period from discontinued operations 1,370 ----------- Profit after tax and discontinued operations 6,642 ----------- Other information Segment assets 149,072 13,991 32,862 163,833 10,602 370,360 Investment in associates 1,002 2,345 57,342 60,689 Unallocated assets 76,799 ----------- Consolidated total assets 507,848 ----------- Segment liabilities (26,784) (3,973) (8,287) (140,180) (293) (179,517) Unallocated liabilities (96,594) ----------- Consolidated total liabilities (276,111) ----------- Capital expenditure 3,759 342 1,943 990 - Depreciation (3,086) (817) (2,838) (212) (99) Amortisation - (5) (26) (60) - Impairment (270) - - - - Segment assets consist primarily of intangible assets, property, plant and equipment, biological assets, prepaid operating leases,inventories, trade and other receivables and cash and cash equivalents. Receivables for tax have been excluded. Investments for associates, valued using the equity method, have been shown separately in the segment information. Segment liabilities are primarily those relating to the operating activities and generally exclude liabilities for taxes, short term loans, finance leases and non-current liabilities. Geographical segments The group operations are based in nine main geographical areas. The United Kingdom is the home country of the parent. The principal territories in which the group operates are as follows: United Kingdom Continental Europe India Kenya Malawi Bangladesh North America South Africa South America The following table provides an analysis of the group's sales by geographical market, irrespective of the origin of the goods/services: 2005 2004 Â£'000 Â£'000 United Kingdom 65,242 62,599 Continental Europe 17,799 19,729 India 32,451 28,056 Kenya 11,361 13,681 Malawi 3,118 4,864 Bangladesh 8,375 7,656 North America 4,115 3,395 South Africa 1,987 6,311 South America 3,112 3,320 Other 5,183 6,677 --------- ---------- 152,743 156,288 --------- ---------- The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment, analysed by the geographical area in which the assets are located: Carrying amount of segment assets Additions to property, plant and equipment 2005 2004 2005 2004 Â£'000 Â£'000 Â£'000 Â£'000 United Kingdom 239,591 215,037 2,151 3,251 Continental Europe 3,493 3,501 58 70 India 48,192 44,973 1,548 1,032 Kenya 36,723 30,360 947 746 Malawi 27,962 25,047 841 870 Bangladesh 23,587 21,807 550 438 North America 3,109 3,785 82 306 South Africa 14,721 15,912 254 115 South America 13,125 9,938 387 312 --------- -------- ---------- ---------- 410,503 370,360 6,818 7,140 --------- -------- ---------- ---------- Discontinued operations In March 2005, the group disposed of its 70.5 per cent. holding in East African Coffee Plantations Limited (EACP), as a result the revenue and results of the EACP group have been excluded from the income statement and are recorded in a single line on a post-tax basis. A breakdown of the results of discontinued operations is shown below: Agriculture and Food storage and Consolidated horticulture distribution 2005 2004 2005 2004 2005 2004 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Revenue External sales 3,373 29,044 - 187 3,373 29,231 -------- -------- -------- ------- ----------- --------- Trading profit Segment profit (499) 2,317 - (17) (499) 2,300 -------- -------- -------- ------- Investment income 1 4 Net finance costs 18 (336) ----------- --------- (Loss)/profit before tax (480) 1,968 Taxation - (598) ----------- --------- (Loss)/profit after tax (480) 1,370 Profit on disposal of discontinued operations 5,167 - Taxation in relation to disposal (1,629) - ----------- --------- Profit for the year from discontinued operations 3,058 1,370 ----------- --------- Geographical segments Revenue from the group's discontinued operations was derived as follows: United Kingdom - 378 - 187 - 565 India 20 817 - - 20 817 Bangladesh - 94 - - - 94 North America 80 6,804 - - 80 6,804 Australia 3,013 15,629 - - 3,013 15,629 Other 260 5,322 - - 260 5,322 -------- -------- -------- ------- ----------- --------- 3,373 29,044 - 187 3,373 29,231 -------- -------- -------- ------- ----------- --------- 3 Gain/(loss) on group restructuring In November 2005, Camellia Plc acquired the outstanding minority shareholding in Linton Park Plc. A gain of Â£6,529,000 was realised as the consideration paid was lower than the net assets acquired. This gain has been partially offset by expenses incurred in relation to the transaction of Â£1,006,000. The loss in 2004 related to the closure of the group's tea operations in South Africa and closure costs relating to the Birmingham division of British Metal Treatments Limited. 4 Equity dividends 2005 2004 Â£'000 Â£'000 Amounts recognised as distributions to equity holders in the period: Final dividend for the year ended 31 December 2004 of 68.00p (2003: 67.00p) per share 1,765 1,739 Interim dividend for the year ended 31 December 2005 of 20.00p (2004: 20.00p) per share 519 519 -------- ---------- 2,284 2,258 -------- ---------- Proposed final dividend for the year ended 31 December 2005 of 69.00p (2004:68.00p) per share 1,961 1,765 -------- ---------- The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements and will be payable on 5 July 2006 to shareholders on the register of members at the close of business on 9 June 2006. 5 Earnings per share (EPS) 2005 2004 Weighted Weighted average average number of number of Earnings shares EPS Earnings shares EPS Â£'000 Number Pence Â£'000 Number Pence Basic and diluted EPS Continuing and discontinued operations Attributable to ordinary shareholders 20,326 2,562,401 793.2 5,515 2,532,653 217.8 ------- --------- ------ ------- ------- ------- Continuing operations Attributable to ordinary shareholders 17,737 2,562,401 692.2 4,923 2,532,653 194.4 ------- -------- ------ ------- -------- ------- Discontinued operations Attributable to ordinary shareholders 2,589 2,562,401 101.0 592 2,532,653 23.4 ------- -------- ------ ------- -------- ------- 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 during the period, excluding those held by the group as treasury shares. 6 Reconciliation of profit from operations to cash flow 2005 2004 Â£'000 Â£'000 Profit from operations 22,870 8,727 Share of associates' results (5,842) (2,924) Depreciation and amortisation 7,249 7,365 Impairment of fixed assets 336 1,254 Gain arising from changes in fair value of biological assets (4,147) (1,722) Loss on disposal of investment 25 - Profit on disposal of non-current assets (874) (1,283) Profit on part disposal of a subsidiary (795) - Profit on disposal of investments (2,488) (844) Profit on part disposal of an associate - (121) (Gain)/loss on group restructuring (5,523) 1,634 Decrease/(increase) in working capital 31,521 (9,412) Net (increase)/decrease in funds of banking subsidiaries (21,579) 8,727 --------- --------- 20,753 11,401 --------- --------- 7 Acquisition and disposal of businesses Acquisition Disposal Acquisition Disposal 2005 2005 2004 2004 Â£'000 Â£'000 Â£'000 Â£'000 Book value of assets and liabilities: Property, plant and equipment 124 3,252 324 - Biological assets - 4,292 - - Financial assets - 75 - - Deferred tax asset - 29 - - Cash and cash equivalents 1,252 1,435 81 - Inventories - 1,386 3 166 Trade and other receivables 626 1,938 17 278 Current income tax assets - 1,101 - - Non-current assets classified as held for sale - 11,157 - - Trade and other payables (577) (9,135) (61) (4) Net amount due from group undertaking - - - 100 Borrowings - (2,002) (25) - Other non-current liabilities - (43) - - --------- ------- --------- -------- 1,425 13,485 339 540 Goodwill 4,220 - (23) - Minority interest - (4,334) (150) - Profit on disposal - 5,167 - - --------- ------- --------- -------- 5,645 14,318 166 540 --------- ------- --------- -------- Satisfied by: Cash consideration and costs 5,645 14,318 108 540 Transfer from other investments - - 58 - --------- ------- --------- -------- 5,645 14,318 166 540 --------- ------- --------- -------- Net (outflow)/inflow of cash in respect of acquisition and disposal of businesses: Cash consideration and costs (5,645) 14,318 (108) 540 Net cash balances of business acquired/(sold) 1,252 (1,435) 56 - Net overdraft of business sold - - - - --------- ------- --------- -------- (4,393) 12,883 (52) 540 --------- ------- --------- -------- On 17 February 2005, the group acquired 100 per cent. of the issued share capital of Douglas Deakin Young Limited for cash consideration of Â£5,645,000. Monies to the value of Â£300,000 were retained from the consideration under the terms of the share sale agreement in respect of certain liabilities that might arise in respect of zero dividend preference shares. Douglas Deakin Young Limited contributed Â£2,669,000 operating income and Â£470,000 to the group's profit before tax for the period between the date of acquisition and the balance sheet date. In March 2005, the group disposed of its 70.5 per cent. interest in East African Coffee Plantations Limited for cash considersation of Â£14,318,000. Press Enquiries: Malcolm Perkins, Chairman Tel: 01622 746655 This information is provided by RNS The company news service from the London Stock Exchange

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