Camellia Regulatory News (CAM)

28 Sep 2005 07:00

Camellia PLC28 September 2005 Camellia Plc Interim report 2005 Chairman's statement The pre-tax profit from continuing operations of £2,455,000 for the six monthsto the 30 June 2005 compares with a profit of £710,000 for the same period lastyear. Results for the half year include nearly £8 million of profits before taxon disposal of assets and discontinued operations. The board has declared an interim dividend of 20p per ordinary share payable on8 November 2005 to shareholders on the register on 14 October 2005. The company has adopted International Financial Reporting Standards (IFRS) forits 2005 group accounts as required by European Union Regulations. The impact of adopting IFRS has been to increase equity shareholders' funds at 1January 2004 from £186.08 million to £193.86 million. The main reasons are theincrease of £13.84 million in investments to reflect their fair value, theincrease of £5.59 million arising on the treatment of biological assets and theinclusion of net pension scheme deficits of £11.45 million, the latter twoamounts being after provision for deferred tax. Other significant changes arisefrom the provision of £3.50 million deferred tax liability on the share ofdistributable reserves of our associate Siegfried Holding AG and an increase inreserves of £2.90 million on release of negative goodwill. A summary of the movements from UK Generally Accepted Accounting Practice (UKGAAP) to IFRS is shown in note 11 to the Interim Statement and in the appendix. TeaIndiaProduction is marginally ahead of last year but prices are about 15% lower. Ourtea operations in the Dooars have recently experienced a two week strike thataffected the entire region which, although now settled, will have an adverseimpact on production and profitability for the second half of the year. Theemphasis in India continues to be the policy of producing the highest qualityproduct possible. The market for orthodox teas continues to be poor because oflow demand from traditional markets. BangladeshProduction is 10% ahead of last year and prices have also increased resulting ina considerably reduced loss for the first six months of the year. The prospectsfor Bangladesh appear to be encouraging. AfricaTea production in Kenya has been slightly ahead of the levels achieved in 2004,however prices have fallen by 25 US cents per kg compared with the same periodlast year. This fall, combined with a relatively strong Kenyan shilling, hasresulted in disappointing results from our Kenyan operations which made a lossin the first half of the year.Production in Malawi is at the same levels as last year, and the fall in priceshas not been so marked. This, together with the impact of a weakening Malawikwacha, has resulted in satisfactory profits being achieved. The outlook for thesecond half of the year is less clear as the rains received since February arewell below average, and if this trend continues will result in reducedproduction levels. In South Africa, where the tea estates were closed last year,some progress has been made in disposing of plant and machinery. Discussionscontinue concerning the disposal of the land assets, but this is likely to be along and tortuous exercise. CitrusAs previously reported, we disposed of our citrus interests in Australia throughthe sale of our 70% shareholding in East African Coffee Plantations in March2005. Our citrus operations in Chile and South Africa both experienced inclementclimatic conditions resulting in a low pack-out for export. The operation inCalifornia is progressing well as the orchards mature. Edible nutsThis will be an "off" year for our pistachio production resulting in anegligible crop. The prospects for the harvest of macadamia nuts in Malawi andSouth Africa are encouraging and the crop will be well in excess of last year.Prices have also been very good although there is some recent evidence of levelsweakening. The orchards in both Malawi and South Africa are currentlyexperiencing extremely dry conditions, if these continue they may impact onflowering and fruit set for the 2006 crop. Other horticultureTable grape production in South Africa was greatly reduced with a significantlack of weight in each bunch. Exports were therefore 50% below last year andthis, coupled with weak prices and a strong rand, has resulted in verydisappointing results. Wine grape production was satisfactory both in SouthAfrica and Chile, but the wine market continues to be very competitive. TheKakuzi avocado crop appears to be in line with expectations and the building ofa new packing shed has commenced. In Brazil, soya prices have declinedsubstantially and the exceptional profits over the last two years will not berepeated this year. In Bangladesh, rubber production continues to increase andprices are remunerative showing a good improvement over the same period lastyear. Food storage and distributionAssociated Cold Stores & Transport experienced a most unsatisfactory first sixmonths. Occupancy level in the cold stores was low and the transport operationssuffered from a lack of demand from their major customers. Considerable effortcontinues to be devoted to reducing costs. There has been a modest increase inactivity over the last month. EngineeringOur UK engineering operations are performing ahead of expectations and theprevious year. Most of our operations are busy particularly as a result ofhigher activity in the oil industry but margins are continually under pressure. BankingThe acquisition of Douglas Deakin Young by Duncan Lawrie has had a positiveimpact on profits, and their contribution is ahead of expectations. Theprospects for our banking operations remain encouraging. PharmaceuticalAlthough Siegfried's sales revenues for the six months have reduced by 14.8%compared to 2004, it appears that the considerable restructuring costs incurredlast year are beginning to show a positive benefit. Siegfried is expected toreturn to growth during the second half of 2005. Other associated undertakingsIn Bangladesh profitability of both the United Leasing Company and of the UnitedInsurance Company continues to be satisfactory. ProspectsThe prospects for the group are somewhat clouded by the uncertainties in Kenyaand the poor trading results at Associated Cold Stores & Transport but progressis being made in returning our engineering operations to profitability. It isdifficult to make any prediction as to the outcome for the full year. M C Perkins Linton ParkChairman Linton Near Maidstone28 September 2005 Kent ME17 4AB Consolidated income statementfor the six months ended 30 June 2005 Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 Notes £'000 £'000 £'000Continuing operations Revenue 2 65,930 66,788 149,676 ====== ====== ======= Trading (loss)/profit 2 (2,864) (2,938) 3,625 (Loss)/gain arising from changes in fair value of biological assets (72) 428 1,722 Share of associates' results 3 2,343 2,382 2,924 Profit on disposal of non-current assets 448 61 1,283 Profit on disposal of 'available-for-sale' investments 1,970 681 695 Profit on part disposal of a subsidiary 4 795 - - Profit on part disposal of an associate - 38 121 Restructuring costs and negative goodwill 5 - 304 (1,634) ------ ------ ------Profit from operations 2,620 956 8,736 Investment income 1,415 1,419 2,105 Net finance costs (1,580) (1,665) (2,824) ------- ------ -------Profit before tax 2,455 710 8,017 Taxation (345) 1,254 (2,486) ------ ----- -------Profit for the period fromcontinuing operations 2,110 1,964 5,531 Discontinued operationsProfit/(loss) for the period from discontinued operations 6 3,058 (799) 1,371 ----- ----- -----Profit for the period 5,168 1,165 6,902 ===== ===== =====Profit attributable to minority interests 941 400 792Profit attributable to equity shareholders' 4,227 765 6,110 ----- ----- ----- 5,168 1,165 6,902 ===== ===== =====Earnings per share - basic and diluted 7 166.9p 30.2p 241.2p Consolidated balance sheetat 30 June 2005 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000Non-current assetsIntangible assets 5,766 1,521 1,516Property, plant and equipment 80,623 95,575 83,252Biological assets 77,409 80,937 79,646Prepaid operating leases 968 920 876Investments in associates 61,263 61,610 62,050Deferred tax assets 5,080 5,323 4,100Available-for-sale investments 45,216 40,118 43,367Retirement benefit surplus 2,430 2,260 2,120Trade and other receivables 148 108 756 ------- ------- ------- 278,903 288,372 277,683 ======= ======= =======Current assetsInventories 20,290 20,172 20,918Trade and other receivables 56,271 53,426 53,057Assets held for resale - - 11,157Cash and cash equivalents (note 10) 175,045 152,388 150,906 ------- ------- ------- 251,606 225,986 236,038 ======= ======= ======= Current liabilitiesBorrowings (23,186) (31,422) (28,282)Trade and other payables (198,266) (171,270) (166,100)Deferred income from anticipated sale - - (3,591)Current income tax liabilities (2,162) (1,172) (3,214)Provisions (1,086) - (436) ------- ------- ------- (224,700) (203,864) (201,623) ------- ------- -------Net current assets 26,906 22,122 34,415 ------- ------- -------Total assets less current liabilities 305,809 310,494 312,098 Non-current liabilitiesBorrowings (11,730) (23,285) (20,541)Deferred tax liabilities (30,105) (29,348) (29,441)Retirement benefit obligations (30,312) (23,228) (27,141)Other non-current liabilities (543) (500) (436)Provisions (38) - (113) ------- ------- ------- (72,728) (76,361) (77,672) ------- ------- -------Net assets 233,081 234,133 234,426 ======= ======= ======= Capital and reservesCalled up share capital 260 260 260Reserves 192,325 186,852 189,225 ------- ------- -------Equity shareholders' funds 192,585 187,112 189,485Minority interests 40,496 47,021 44,941 ------- ------- ------- 233,081 234,133 234,426 ======= ======= ======= Consolidated cash flow statementfor the six months ended 30 June 2005 Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 Notes £'000 £'000 £'000Cash generated from operationsCash flows from operating activities 8 2,626 982 11,475Interest paid (1,580) (1,892) (2,785)Income taxes paid (770) (298) (2,552)Interest received 542 649 265Dividends received from associates 1,530 2,202 2,149 ----- ----- -----Net cash flow from continuing operating activities 2,348 1,643 8,552Net cash flow from discontinued operating activities (2,083) (1,599) 6,330 ----- ----- -----Net cash flow from operating activities 265 44 14,882 Cash flows from investing activitiesPurchase of intangible assets (24) (36) (70)Purchase of property, plant and equipment (2,022) (2,615) (5,328)Proceeds from sale of non-current assets 1,490 323 2,244Disposal of subsidiaries/businesses (net of cash disposed) 12,883 540 540Part disposal of a subsidiary 1,673 - -Acquisition of subsidiary (net of cash acquired) (4,393) - (108)Purchase of minority interests - (478) (482)Proceeds from sale of shares in associates - - 1,075Proceeds from sale of investments 2,595 1,788 2,589Purchase of investments (299) (619) (3,579)Income from investments 873 876 1,374Net cash flow from discontinued operations (1,095) (455) (725) ------ ----- -----Net cash flow from investing activities 11,681 (676) (2,470) Cash flows from financing activitiesEquity dividends paid - - (2,258)Dividends paid to minority interests (1,617) (707) (1,871)Net repayment of debt (8,458) (1,320) (5,328)Purchase of own shares - (16) (16)Net cash flow from discontinued operations - 1,121 (3,879) Net cash flow from financing activities (10,075) (922) (13,352) ------ ----- ------Net increase/(decrease) in cash and cash equivalents 9 1,871 (1,554) (940)Cash and cash equivalents at beginning of period (10,619) (9,946) (9,946)Exchange (losses)/gains on cash (180) (145) 267 ------ ----- ------Cash and cash equivalents at end of period (8,928) (11,645) (10,619) ====== ====== ====== For the purposes of the cash flow statement, cash and cash equivalents areincluded net of overdrafts repayable on demand. These overdrafts are excludedfrom the definition of cash and cash equivalents disclosed on the balance sheet. Statement of recognised income and expensefor the six months ended 30 June 2005 Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Foreign exchange translation differences 3,940 (4,246) (7,470)Actuarial movement on defined benefit pension schemes (2,704) (3,246) (8,190)Movement on deferred tax relating todefined benefit pension schemes (51) (368) (627)Available-for-sale investments: Valuation gains taken to equity 1,011 2,687 5,021 Transferred to profit or loss on sale (1,191) (669) (669)Share of associate's fair value adjustments (32) - 169Share of associate's loss on cash flow hedges (632) - - ----- ----- ------Net income/(expense) recognised directly in equity 341 (5,842) (11,766)Profit for the period 5,168 1,165 6,902 ----- ----- ------Total recognised income and expense for the period 5,509 (4,677) (4,864) ===== ===== ======Attributable to: Minority interests 644 319 (2,760) Equity shareholders' 4,865 (4,996) (2,104) ----- ----- ------ 5,509 (4,677) (4,864) ===== ===== ====== Statement of changes in shareholders' equityfor the six months ended 30 June 2005 Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Profit attributable to equity shareholders 4,227 765 6,110Dividends (1,765) (1,739) (2,258)Foreign exchange translation differences 3,659 (4,210) (6,027)Actuarial movement on defined benefit pension schemes (2,250) (2,407) (6,246)Movement on deferred tax relating to defined benefit pension schemes (51) (291) (462)Available-for-sale investments: Valuation gains taken to equity 995 1,816 5,021 Transferred to profit or loss on sale (1,191) (669) (669)Share of associate's fair value adjustments (24) - 169Share of associate's loss on cash flow hedges (500) - -Purchase of own shares - (16) (16) ------- ------- -------Net movement in shareholders' equity 3,100 (6,751) (4,378) ------- -------Opening shareholders' equity (as previously reported under UK GAAP) 186,482 186,482Prior year adjustment (400) (400) ------- ------- 186,082 186,082Adjustments on adoption of IFRS (note 11) 7,781 7,781 ------- -------Opening shareholders' equity restated 189,485 193,863 193,863 ------- ------- -------Closing shareholders' equity 192,585 187,112 189,485 ======= ======= ======= The prior year adjustment of £400,000 reflects the cost of 62,500 Camellia Plcshares held by its own subsidiaries. These were previously included withinavailable-for-sale investments. Notes to the accounts 1 Basis of preparationThe group adopted International Financial Reporting Standards (IFRS) on 1January 2005 and therefore the financial information contained within theinterim report has been prepared on the basis of the recognition and measurementrequirements of IFRS in issue that either are endorsed by the EU and effective(or available for early adoption) at 30 June 2005 or are expected to be endorsedand effective at 31 December 2005, the group's first annual reporting date atwhich it is required to use IFRS. It should be noted that the IFRS that will beeffective in the annual financial statements for the year ending 31 December2005 are still subject to change and to additional interpretations and thereforecannot be determined with certainty. Details of accounting policies adopted under IFRS and applied in the preparationof the interim financial statements and reconciliations of comparative figuresbetween UK GAAP and IFRS have been included in the appendix. Thesereconciliations are unaudited. The group has not adopted International Accounting Standard (IAS) 34 "InterimFinancial Reporting" in these interim financial statements. This standard is notmandatory. The financial information contained in this report has not been audited and doesnot constitute statutory accounts within the meaning of Section 240 of theCompanies Act 1985. The statutory accounts for 2004, which were prepared underUK GAAP, have been delivered to the Registrar of Companies. The auditors'opinion on these accounts was unqualified and does not contain a statement madeunder Section 237(2) and Section 237(3) of the Companies Act 1985. 2 Segmental analysis of revenue and trading (loss)/profit Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000RevenueBy activityAgriculture and horticulture 36,746 40,035 92,650Food storage and distribution 19,016 20,059 42,007Engineering 9,705 6,172 13,684Trading, agency and others 463 522 1,335 ------ ------ ------- 65,930 66,788 149,676 ====== ====== =======By country of originUnited Kingdom 24,157 21,843 46,764Continental Europe 4,918 4,576 9,932India 11,557 9,332 32,159Kenya 8,948 10,533 22,923Malawi 7,923 7,536 11,438Bangladesh 2,974 2,989 7,656United States of America 252 188 1,468South Africa 2,830 7,085 14,025South America 2,371 2,706 3,311 ------ ------ ------- 65,930 66,788 149,676 ====== ====== =======Trading (loss)/profitBy activityAgriculture and horticulture (1,204) (436) 7,831Food storage and distribution (755) (152) (682)Engineering 458 (893) (582)Trading, agency and others 562 809 478Banking 597 448 721 ------ ------ ------ (342) (224) 7,766Net unallocated expenses (2,522) (2,714) (4,141) ------ ------ ------ (2,864) (2,938) 3,625By country of originUnited Kingdom 883 226 (145)Continental Europe (30) (35) 22India (3,644) (3,787) 1,708Kenya (563) 676 2,775Malawi 2,928 2,671 3,325Bangladesh 31 (375) 1,654United States of America 93 75 984South Africa (106) (469) (3,402)South America 66 794 845 ------ ------ ----- (342) (224) 7,766 ====== ====== ====== 3 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 2005 2004 2004 £'000 £'000 £'000 Operating profit 2,823 3,143 4,216Investment income 14 3 47Net finance costs 113 (239) (551) ----- ----- -----Profit before tax 2,950 2,907 3,712Taxation (607) (525) (788) ----- ----- -----Profit after tax 2,343 2,382 2,924 ===== ===== =====By activityPharmaceutical 2,221 2,217 2,330Agriculture and horticulture (28) (84) 8Leasing and Insurance 150 249 586 ----- ----- ----- 2,343 2,382 2,924 ===== ===== ===== 4 Profit on part disposal of a subsidiary A profit of £795,000 was realised following completion of the sale of 1,673,000ordinary shares (8 per cent.) in Linton Park Plc's subsidiary, Eastern ProduceKenya Limited. The group's holding is now 70.0 per cent.. The cash considerationwas £1,673,000. 5 Restructuring costs and negative goodwill The restructuring costs and negative goodwill credit in 2004 related to theclosure of the group's tea operations in South Africa and closure costs relatingto the Birmingham division of British Metal Treatments Limited. 6 Discontinued operations In March 2005, Linton Park Plc disposed of its 70.5 per cent. holding in EastAfrican Coffee Plantations Limited (EACP), as a result the revenue and resultsof the EACP group have been excluded from the income statement and are recordedin a single line on a post-tax basis. A breakdown of the results of discontinued operations is shown below: Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Revenue 3,373 7,071 29,231 ===== ===== ====== Operating (loss)/profit (499) (962) 2,300Investment income 69 - -Finance costs (50) (173) (331) ----- ----- -----(Loss)/profit before tax (480) (1,135) 1,969Taxation - 336 (598) ----- ----- ----- (Loss)/profit after tax (480) (799) 1,371 ----- ----- -----Profit on disposal of discontinued operations 5,167 - -Taxation in relation to disposal (1,629) - - ----- ----- -----Profit/(loss) for the period from discontinued operations 3,058 (799) 1,371 ===== ===== ===== 7 Earnings per share Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 Earnings per share - continuing operationsEarnings per share - basic and diluted 64.7p 53.4p 217.8p Earnings/(loss) per share - discontinued operationsEarnings/(loss) per share - basic and diluted 102.2p (23.2)p 23.4p The weighted average number of shares used in the calculation of both basic anddiluted earnings per share is 2,532,500 (2004: six months 2,532,809 - year2,532,653). 8 Reconciliation of profit from operations to cash flow Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Profit from operations 2,620 956 8,736Share of associates' results (2,343) (2,382) (2,924)Depreciation and amortisation 3,817 3,682 7,365Impairment of fixed assets - - 1,254Loss/(gain) arising from changes in fair value of biological assets 72 (428) (1,722)Profit on disposal of non-current assets (448) (24) (1,278)Profit on part disposal of a subsidiary (795) - -Profit on disposal of investments (1,970) (681) (695)Profit on part disposal of an associate - (38) (121)Restructuring costs and negative goodwill - (304) 1,634Increase in working capital (1,217) (364) (9,495)Net decrease in funds of banking subsidiaries 2,890 565 8,721 ----- ----- ------ 2,626 982 11,475 ===== ===== ====== 9 Reconciliation of net cash flow to movement in net debt Six months Six months Year ended ended ended 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Increase/(decrease) in cash and cash equivalents in the period 1,871 (1,554) (940)Cash outflow from decrease in debt 8,458 200 9,207 ------ ------ ------Decrease/(increase) in net debt resulting from cash flows 10,329 (1,354) 8,267Finance lease balances of business acquired - - (19)Loans of subsidiaries sold 2,002 - -New finance leases (188) (258) (1,332)Exchange rate movements (210) 647 716 ------ ------ ------Decrease/(increase) in net debt in the period 11,933 (965) 7,632Net debt at beginning of period (36,128) (43,760) (43,760) ------ ------ ------Net debt at end of period (24,195) (44,725) (36,128) ====== ====== ====== 10 Cash and cash equivalents Included in cash and cash equivalents of £175,045,000 (2004: six months£152,388,000 - year £150,906,000) are cash and short-term funds, time depositswith banks and building societies and certificates of deposit amounting to£164,324,000 (2004: six months £142,407,000 - year £138,228,000), which are heldby banking subsidiaries and which are an integral part of the banking operationsof the group. 11 Adjustments on adoption of IFRS On adoption of IFRS, the book value of the group's shareholders' equityincreased. The following table explains the increase of £7,781,000 as at 1January 2004. £'000 Biological assets 5,587IAS 41 - Agriculture: Requires the group to fair value its biologicalassets. Pension liability (11,453)IAS 19 (revised) - Employee benefits: Requires any surplus or deficit in thefair value of the group's pension schemes assets over their liabilities to berecognised in the balance sheet. Leases (1,611)IAS 17 - Leases: Requires leases to be reclassified subject to theirclassification, in particular the requirement to treat leased land as anoperating lease. Available-for-sale investments 13,840IAS 39 - Financial Instruments: Requires the group to fair value itsavailable-for-sale investments. Goodwill 2,902IFRS 3 - Business combinations: Requires the credit of previously recognisednegative goodwill. Property valuation 591IFRS 1 - First time adoption of IFRS: Permits certain properties to berecognised at their fair value. Deferred tax (3,814)IAS 12 - Income taxes: Requires deferred tax to be provided on all temporarydifferences between accounting and tax book values, including the tax impact ofthe potential distribution of associate's distributable reserves. The financialimpact of IAS 12 has been included in the adjustments above where appropriate. Proposed dividend 1,739IAS 10 - Events after the balance sheet date: Dividends that are declared afterthe balance sheet date are not recognised as a liability at the balance sheetdate. ----- 7,781 ===== A copy of the full interim report including the appendix is available on the company's website at www.camellia.plc.uk. Press Enquiries: Malcolm Perkins, ChairmanTel: 01622 746655 This information is provided by RNS The company news service from the London Stock Exchange