Camellia swings to loss in tough first half

6th Sep 2024 11:02

(Sharecast News) - Camellia reported a challenging first half on Friday, posting a loss after tax of £14m, swinging from the £3.5m profit recorded in the same period last year.

The AIM-traded firm said revenue from continuing operations increased 7% to £105.1m, up from £98m in the first half of 2023, driven by improvements in both agriculture and engineering.

However, it reported an adjusted loss before tax of £11.6m, widening from the £9.2m loss reported a year ago.

Key factors contributing to the mixed performance included higher overall tea volumes, offset by lower prices, lower macadamia volumes but improved pricing, and weaker volumes and prices in soya.

Avocado production was also down, but higher prices helped offset that decline.

On the positive side, the engineering sector posted higher revenue, and management costs were reduced.

Despite the operational improvements, the company's overall performance was weighed down by higher financing costs, which rose to £4.1m, primarily due to exchange losses caused by the strengthening of the Kenyan shilling.

Additionally, the absence of a significant impairment write-back, which boosted last year's results by £18m, impacted the year-on-year comparison.

The company added that it had categorised Bardsley as a discontinued operation, affecting the results.

Given the ongoing operating losses, the board decided not to declare an interim dividend for the period.

Despite the tough conditions, the board said it remained focussed on supporting the group's agricultural operations, with an emphasis on sustaining, expanding, and diversifying where appropriate.

The company said it was working on exiting non-core assets as part of its broader strategy to improve margins and manage risks from adverse weather, political instability, and fluctuating commodity prices.

At 0953 BST, shares in Camellia were down 5.63% at 4,199.4p.

Reporting by Josh White for Sharecast.com.