27th Aug 2015 10:42
LONDON (Alliance News) - Camellia PLC Thursday reported a widened pretax loss in the first half of 2015, despite a rise in revenue, as tea production was hit by droughts in India and Bangladesh and it made a loss on the closure of the AKD Engineering business.
The agricultural, engineering and private banking business, which is a major grower of tea, reported a GBP8.4 million pretax loss in the six months ended June 30, wider than the GBP6.9 million loss it made in the first half of 2014, even though revenue grew to GBP102.5 million from GBP101.5 million.
Camellia said that tea production was hit by periods of sustained drought in India and Bangladesh, while production in Kenya and Malawi was "reasonable but not as good as the previous year".
Meanwhile, the engineering division suffered a loss due to costs associated with the closure of AKD Engineering and as the low price of oil hit profit at its Scottish operations. "There seems little immediate prospect of the market returning to a level that would encourage the major operators to restart both capital and operational spending," the company said.
Losses at Abbey Metal Finishing Co Ltd, however, are reducing faster than expected, Camellia said, adding that the prospects for the business are more encouraging.
Camellia added that the review into its private bank Duncan Lawrie Ltd, which had been hit by low interest rates and increasing compliance costs, concluded that the business "is worthy of continuing support, investment and development".
"With some investment over the coming two to three years, and some relaxation of the current restriction on lending, we are confident that the bank can become a successful and profitable part of the group," the company said.
Camellia will pay an interim dividend of 34 pence, flat year-on-year.
"Weather conditions continue to be a major consideration for the profitability of the group. It is however encouraging that the crops we grow are still in demand to the extent that prices have recovered from the levels that were unsustainable in some of our operations in 2014. Whilst it is too early to give any predication of the likely outcome of the full year, we expect the second half of the year to be more favourable than the first," Chairman Malcolm Courtney Perkins said in a statement.
Shares in Camellia were trading up 0.3% at 9,600.00p Thursday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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