21st Jan 2020 12:35
(Alliance News) - Agriculture firm Camellia PLC on Tuesday said full-year profit is expected to be below expectations, amid a fall in a revenue and declining tea prices.
For the year to December 31, revenue is expected to fall 5.1% year-on-year to GBP294 million. In 2018, Camellia reported revenue of GBP309.8 million.
Profit for the year will be "significantly below expectations", the company warned.
Tea output in 2019 was down 2.0% year-on-year to 101 million kilogrammes from 103.1 million kilogrammes.
Camellia said a global over-production of tea in 2018 contributed to reduced prices in 2019.
Avocado crop volumes were 40% lower year-on-year, Camellia added, though prices more than doubled, despite the "market weakening in November and December".
Camellia added: "Macadamia saleable kernel production volumes were higher than expected in the second half of the year with full year production 12% higher than in 2018 and average prices up 4%."
The company warned that its 2019 numbers will take a hit from a series of legal costs in the UK in relation to assault, harassment and sexual misconduct allegations levelled at two of its subsidiaries which operate in South Africa.
Camellia explained: "Camellia and a number of its subsidiary companies have received notification of claims to be made in the UK relating to allegations made by multiple individuals concerning two of those companies' African operations. The allegations are of serious assault, harassment and sexual misconduct allegedly committed by certain individuals employed by those two foreign operating companies.
"The company and its wider group takes any complaint of criminality, misconduct, illegality, or unethical behaviour extremely seriously. The allegations are being urgently investigated. We have incurred legal costs during 2019 relating to this and further expenses are expected in 2020."
The company will also set aside an unspecified amount in relation to employee profit sharing laws in Bangladesh.
Camellia said: "In Bangladesh, legislation has been enacted requiring certain companies to contribute to workers profit participation funds. The applicability of this legislation to our larger businesses in Bangladesh is unclear, and the government funds to which payments are to be made have not yet been established."
Shares in the company were 1.4% lower at 8,679.00 pence each in London on Tuesday afternoon.
By Eric Cunha; [email protected]
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