Camellia (LON: CAM), the diversified agricultural group, swung from a £15.6m pre-tax loss to a £15.6m pre-tax profit in the six months to 30 June, unaudited results released earlier today showed. Shares fell despite the improvement as management flagged fresh headwinds to the full-year outlook.
The stock dropped from Wednesday’s close of 5,800p to 5,600p in early trade, down 3.4% on thin volume, within its 52-week range of 4,578.13p to 6,008.8p.
Revenue fell 3% to £104.6m, largely reflecting the disposal of three loss-making Indian tea gardens, while the trading loss narrowed to £5.0m from £9.6m on cost discipline and better yields and pricing across the tea businesses. Profit attributable to shareholders swung to £11.8m from an £11.8m loss.
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Much of the improvement came from one-off items rather than trading: an £18.4m profit on disposal of assets held for sale and £0.5m from tea estate sales, as Camellia’s Value Enhancement Plan, its programme to sell non-operating assets and cut portfolio risk, nears completion.
Chief executive Byron Coombs said: “We delivered an improved first-half trading performance, reflecting strong cost discipline, efficiency measures and better yields and pricing across several of our tea businesses. We also made good progress with our Value Enhancement Plan, substantially completing the disposal of UK non-operating assets and advancing all four growth projects. While the full-year outcome remains uncertain, particularly given headwinds at Kakuzi and disruption arising from events in the Gulf, we remain focused on restoring sustainable profitability, reducing portfolio risk and building long-term growth.”
Camellia said the Gulf conflict is raising fuel, fertiliser and energy costs and disrupting Red Sea shipping and Middle East tea demand, alongside a profit warning at Kakuzi, its Kenyan avocado and macadamia business, and El Niño risk to its South African and Malawian operations. A fuller full-year update is due in late October, once those impacts become clearer.
