Camellia Regulatory News (CAM)

Camellia Plc

Half yearly report 2011

Chairman's statement

The profit before tax of £14,129,000 for the six months to 30 June 2011 compares with a profit of £16,136,000 for the same period last year.

The board has declared an interim dividend of 30p per ordinary share payable on 3 November 2011 to shareholders registered on 7 October 2011.

Tea

India

Improved climatic conditions have led to higher production and sale prices have increased over last year. However the level of wage demands in the tea growing districts is likely to affect results and is of considerable concern to the industry as are the effects of inflation on other garden costs.

Bangladesh

Production for the first half of the year was below expectations and prices also declined from the high levels seen last year.

Africa

Production in Kenya is down by approximately a quarter this year after the exceptional climatic conditions in 2010 and the impact of the drought in the Horn of Africa. Production in Malawi is marginally below last year. Tea prices in both Kenya and Malawi have remained strong in the first half of the year and have recently improved from the slightly reduced levels achieved earlier in the year.

The political situation in Malawi continues to be a cause for concern. The high value of the Kwacha has been partially alleviated by its recent devaluation; however it will continue to put pressure on margins in local currency.

Edible nuts

Macadamia production in Malawi and South Africa is slightly below last year, principally due to hail damage on one of our estates. Sale prices are above those achieved in the previous year.

Other horticulture

The citrus crop at Horizon Farms in California is expected to be on a par with that for 2010.

Avocado production at Kakuzi in Kenya is reduced from the previous year, although there has been an increase in the outgrower fruit processed through the packing facility. Sale prices are expected to be on a par with last year, although it is too early to predict final European prices following the United States allowing fruit from Peru to be imported for the first time.

Rubber production in Bangladesh was lower than last year but sale prices have continued to rise.

In Brazil the 2010/11 season concluded with good production and prices for the soya and maize crops of CC Lawrie.

Our wine harvest in South Africa was marginally ahead of the previous year.

Food storage and distribution

The market for cold storage remains very competitive with overcapacity continuing to impact the results of Associated Cold Stores and Transport. Some progress has been made in the last few months in improving occupancy levels in our cold stores.

Engineering

Our engineering group continues to operate in a varied environment. AKD Engineering has had a very difficult start to the year, while our Scottish based companies have had a successful first six months. Orders continue to be placed on a hand to mouth basis and there remains concern in the engineering sector of a potential double dip recession. The establishment of the new Abbey Metal Finishing facility following the disastrous fire in April 2010 has been completed and it will become fully operational in the second half of the year. GU Cutting and Grinding Services are also now operating from their new facility.

Banking

Duncan Lawrie increased its revenue and trading profits compared to the same period last year. The current turmoil in the financial markets makes for a very uncertain outcome for the remainder of the year.

Associates

As previously announced the proposed sale of our shareholdings in United Leasing and United Insurance in Bangladesh did not materialise due to the fact that, on account of legal reasons beyond our control, completion could not take place within the period stipulated in the contracts and it proved impossible to negotiate a satisfactory extension of the contracts. These companies will therefore be treated as associate companies and their results will be consolidated as from 1 January 2011.

Prospects

Our agricultural operations are continuing to make a positive contribution to profits, but the ever increasing cost of production including the cost of labour remains a cause for concern.

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 PerkinsChairman

25 August 2011

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 2011 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 2010 (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 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 2010. There have been no 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 PerkinsChairman

25 August 2011

Consolidated income statement

for the six months ended 30 June 2011

Statement of comprehensive income

for the six months ended 30 June 2011

Consolidated balance sheet

at 30 June 2011

Consolidated cash flow statement

for the six months ended 30 June 2011

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 2011

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 2011 (the "Interim Report"). They should be read in conjunction with the Report and Accounts (the "Annual Report") for the year ended 31 December 2010.

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 2010 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. In respect of year ended 31 December 2010 the balance sheet has been restated, details are included in note 12.

These interim condensed financial statements were approved by the board of directors on 25 August 2011. 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 2010. In addition the group has implemented the following new and revised standards and interpretations:

A summary of each of the above standards and interpretations was provided on page 37 of the 2010 Annual Report. The adoption of IAS 24 and IFRIC 14 has had no material impact on the group's results, assets and liabilities.

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

5 Share of associates' results

The group's share of the results of associates is analysed below:

6 Profit on non-current assets

An additional profit of £534,000 (2010: six months £nil - year £4,144,000) has been realised in relation to the property, plant and equipment destroyed by the fire in 2010 at the Nuneaton premises of Abbey Metal Finishing Limited.

7 Finance income and costs

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

8 Taxation on profit on ordinary activities

Tax on profit on ordinary activities for the six months to 30 June 2011 has been calculated on the basis of the estimated annual effective rate for the year ending 31 December 2011.

9 Equity dividends

Dividends amounting to £50,000 (2010: six months £46,000 - year £65,000) have not been included as group companies hold 62,500 issued shares in the company. These are classified as treasury shares.

The proposed interim dividend was approved by the board of directors on 25 August 2011 and has not been included as a liability in these financial statements.

10 Earnings per share (EPS)

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 2,779,500 (2010: six months 2,779,500 - year 2,779,500), which excludes 62,500 (2010: six months 62,500 - year 62,500) shares held by the group as treasury shares.

11 Property, plant and equipment

During the six months ended 30 June 2011 the group acquired assets with a cost of £10,351,000 (2010: six months £5,783,000 - year £16,486,000). Assets with a carrying amount of £91,000 were disposed of during the six months ended 30 June 2011 (2010: six months £645,000 - year £1,381,000).

12 Investments in associates

At 1 January 2011, an amount of £6,161,000 has been reclassified from assets held for sale to investments in associates, as the proposed sale of the group's entire shareholdings in its Bangladeshi associated undertakings United Insurance Company Limited and United Leasing Company Limited did not materialise. For comparative purposes, the consolidated balance sheet at 31 December 2010 has been restated to incorporate this change.

13 Cash and cash equivalents

Included in cash and cash equivalents of £263,322,000 (2010: six months £268,177,000 - year £291,149,000) are cash and short-term funds, time deposits with banks and building societies and certificates of deposit amounting to £188,507,000 (2010: six months £196,166,000 - year £210,429,000), which are held by banking subsidiaries and which are an integral part of the banking operations of the group.

14 Borrowings

Borrowings (current and non-current) include loans and finance leases of £639,000 (2010: six months £3,587,000 - year £985,000) and bank overdrafts of £10,579,000 (2010: six months £11,305,000 - year £5,447,000). The following loans were repaid during the six months ended 30 June 2011:

15 Retirement benefit schemes

UK defined benefit pension schemes for the purposes of IAS 19 have been updated to 30 June 2011 from the valuations as at 31 December 2010 by the actuaries to each relevant pension scheme and the movements have been reflected in this interim statement. Overseas schemes have not been updated from 31 December 2010 valuations as it is considered that there have been no significant changes.

An actuarial profit of £626,000 was realised in the period, of which £55,000 was realised in relation to the scheme assets and £571,000 was realised in relation to changes in the underlying actuarial assumptions. The assumed discount rate has increased to 5.50% (31 December 2010: 5.40%), the assumed rate of inflation (CPI) has increased to 3.10% (31 December 2010: 3.00%) and the assumed rate of increases for salaries to 3.20% (31 December 2010: 3.10%). There has been no change in the mortality assumptions used.

On 1 July 2011 the three UK defined benefit pension schemes were merged into one new scheme.

16 Reconciliation of profit from operations to cash flow

17 Reconciliation of net cash flow to movement in net cash

18 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