Camellia Regulatory News (CAM)

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

Statement of comprehensive income

for the six months ended 30 June 2013

Consolidated balance sheet

at 30 June 2013

Consolidated cash flow statement

for the six months ended 30 June 2013

Statement of changes in equity

for the six months ended 30 June 2013

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 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.

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:

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.

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.

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.

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:

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