Camellia Regulatory News (CAM)

Chairman's statement

The headline loss before tax was £3,398,000 for the six months to 30 June 2014 compared with a profit of £12,466,000 in the same period last year. Headline profit or loss is a measure of underlying performance which is not impacted by exceptional and other items. After taking account of exceptional items the loss before tax for the six month period to 30 June 2014 amounted to £6,893,000 (2013: £11,930,000 profit).

The disappointing results are, as previously advised, primarily due to adverse climatic conditions, continued difficulties in our engineering division and higher costs at Duncan Lawrie Private Bank.

The board has declared an interim dividend of 34p per ordinary share payable on 3 October 2014 to shareholders registered on 5 September 2014.

Tea

India

There were periods of sustained drought during the first part of the year. This resulted in a substantial crop loss, particularly in Assam, and encouraged the proliferation of pests and disease which further reduced the crop.

While tea prices in Assam have been stable those in the Dooars have increased over the same period last year.

Bangladesh

As in India, Bangladesh suffered extensively from drought in April and May which has reduced its production. Tea prices have recovered from low points last year due to an increase in the rate of import tax, but still remain significantly below those prices achieved in the first part of 2013.

Africa

Production in both Kenya and Malawi has been good due to the beneficial pattern of rainfall for a large part of the six month period. Our operation in Kenya has, on occasion been selling its tea at below cost of production. Although remaining volatile, prices have shown an improving trend over the last few weeks, but remain below the average price achieved during 2013.

Tea prices in Malawi are significantly below those achieved in the same period last year.

As previously announced, a substantial loss has been incurred in Africa from changes in the fair value of biological assets, primarily as a result of an 8 per cent. revaluation of the Malawi kwacha against the US dollar during the period to 30 June 2014.

Edible nuts

The macadamia nut production in Malawi is marginally ahead of the same period last year, while the harvest in South Africa had only just commenced within the period under review. Prices for macadamia nuts are holding firm in the international markets.

A new colour sorter has been installed in our processing factory in South Africa which should make a meaningful contribution to increasing the throughput and reducing the cost of production.

The macadamia planted by Kakuzi in Kenya is showing encouraging signs of development and a reasonable crop will probably be harvested in 2016.

A large pistachio crop has set on our pistachio orchard in California. The unknown factor is what proportion of that crop will be 'blanks' and this will, of course, not be known until the harvest in September.

Other horticulture

The avocado crop presently being harvested at Kakuzi in Kenya is substantially ahead of the same period last year, as is the crop packed from outgrowers. Sale prices in the market have been affected by fruit arriving from other origins and are generally expected to be lower than last year.

California experienced a major freeze in the early part of the year and this affected both the quality and quantity of our citrus production.

The soya crop in Brazil is approximately the same as the previous year although selling prices are higher.

The grape harvest on our wine estate in South Africa increased substantially over the previous year and some progress is being made in increasing the number of higher value bottles of wine sold.

Food storage and distribution

The substantial competition in the cold storage industry continues and margins are constantly under pressure. The results for the year to date are below those of the previous year but some initiatives have been taken to develop the spread of work undertaken by our operations.

The Netherlands have been moving slowly out of recession and this, together with a favourable Yen exchange rate, has contributed to improved results for our food distribution business.

Engineering

Our engineering division based in Scotland and centred on AJT Engineering at Aberdeen has continued to perform well.

The operations at British Metal Treatments, GU Cutting and Grinding and Loddon Engineering are showing improved results over the previous year.

Less satisfactory are the continuing losses at Abbey Metal where the regaining of contracts lost subsequent to the fire is proving more difficult than anticipated. In addition, there are supplier programme delays at Abbey Metal's operation in Germany resulting in the start-up costs having to be absorbed over a longer period.

AKD Engineering continues to suffer from the run-off costs associated with a large contract which remains the subject of a legal dispute.

Banking

In the first six months Duncan Lawrie Private Bank suffered from one-off costs associated with specific regulatory compliance matters and a change in the senior management in the company. Lending also reduced due to a more competitive market, although there are signs this business may gradually increase over the next few months.

Prospects

In my chairman's statement which accompanied the 2013 report and accounts I warned shareholders that the group's success was partly dependent on benign climatic conditions. We experienced a number of adverse climatic conditions in the first half of the year which have affected our results. We are still in periods of major harvesting and the impact of climatic conditions in the second half of the year will, of course, have a significant part to play in our results for that period. For these reasons, it remains difficult to give any indication of the likely outcome for the full year but the board nonetheless expects the second half to be more favourable than the first.

M C Perkins

Chairman

28 August 2014

Camellia Plc 01622 746655

Malcolm Perkins, Chairman

Anil Mathur, Finance Director

Julia Morton, Company Secretary

Charles Stanley Securities 020 7149 6000

Russell Cook

Carl Holmes

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 2014 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 2013 (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 Conduct Authority.

The directors of Camellia Plc are listed in the Camellia Plc statutory financial statements for the year ended 31 December 2013. Mr C P T Vaughan-Johnson 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

28 August 2014

Consolidated income statement

for the six months ended 30 June 2014

Statement of comprehensive income

for the six months ended 30 June 2014

Consolidated balance sheet

at 30 June 2014

Consolidated cash flow statement

for the six months ended 30 June 2014

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:

Statement of changes in equity

for the six months ended 30 June 2014

Notes to the accounts

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 2014 (the "Interim Report"). They should be read in conjunction with the Report and Accounts (the "Annual Report") for the year ended 31 December 2013.

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 2013 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.

The preparation of the condensed interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, income and expense.

In preparing this condensed interim financial report, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 December 2013 with the exception of changes in estimates that are required in determining the provision for income taxes.

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 28 August 2014. 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.

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 2013. Amendments to IFRSs effective for the financial year ending 31 December 2014 are not expected to have a material impact on the group.

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 and citrus in California 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.

* Unallocated corporate expenses include group marketing expenses of £nil (2013: half year £487,000 - year £881,000) incurred on behalf of banking and financial services and agriculture and horticulture segments.

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 (loss)/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:

Headline (loss)/profit before tax comprises: