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CHAIRMAN'S STATEMENT

 

I am pleased to report the results for 2016, which reflect a slightly increased headline profit from continuing operations of £26.5 million (2015: £26.4 million). Overall, a loss of £5.9 million was recorded for the year (2015: profit £7.2 million) due to the inclusion of a charge of £20.0 million in respect of the expected costs of closure and wind down of Duncan Lawrie. However, the expected future gain on sale of Duncan Lawrie’s UK asset management business of £19.2 million is not included in the 2016 results. The timing of the various sales and closure of Duncan Lawrie means that the financial impact has to be recorded over two separate years and I urge shareholders to read the Chief Financial Officer’s report on pages 15 to 17 where the full financial impact of the closure is described.

The attached Report and Accounts retain the format adopted last year of giving additional detail as to our individual operations, and this year we have also included significant information on our approach to both environmental and social sustainability and what that means for the Group. It has always been part of the Group’s ethos to support the communities in which we operate, and I hope that this new disclosure will assist shareholders in understanding the full impact of that support.

As previously announced to the market and, as I refer to above, the fall in interest rates and the continuing uncertainty in the UK property market in the second half of 2016 led to the Board taking the decision to discontinue the operations of our private banking and wealth management business, Duncan Lawrie. The loan book was sold to Arbuthnot Latham on 19 December 2016 and at the same time we announced the sale of the UK asset management division to Brewin Dolphin subject only to approval from the Financial Conduct Authority (‘FCA’). The FCA approval for the change of control has since been received and this transaction is expected to complete in May. There were no other significant changes to the Group structure in the year.

2016 was a notable year in many respects, not least of which was the Group’s record production of 99.1 million kg of tea, an increase of 14.8% over 2015. At the same time macadamia production fell significantly in the year. This illustrates the impact of weather on our operations and the importance of our geographic and crop diversity.

The global political environment remains uncertain. The implications of Brexit will only be fully understood some years hence, but are unlikely to have a major effect on our businesses other than the implications from exchange rates. Of more concern are the pronouncements by politicians, particularly in Africa, regarding land security and the widespread corruption evident in so many of the countries in which we operate.

PricewaterhouseCoopers and its predecessor firms have been auditor to various companies in the Group since the 1960’s, and more recently to Camellia. However, following corporate governance changes we are proposing the appointment of Deloitte as auditor to the Group. I would like to take this opportunity to thank PricewaterhouseCoopers for their help and contribution to the development of Camellia over their tenure.

DIVIDEND

Your Board is recommending a final dividend of 95p per share which, together with the interim dividend already paid of 35p per share, brings the total distribution for the year to 130p per share compared with 129p per share for 2015.

OUTLOOK

As ever, the outlook for 2017 is uncertain. Climate change, in the form of erratic rainfall patterns, heat waves and storms makes predicting crop volumes difficult; for example the start of 2017 has seen droughts continuing in parts of South Africa and significantly curtailed rainfall in Kenya and parts of the tea growing areas of India. The impact of this on production volumes and prices has yet to be established. The continuing low oil price provides a challenge to our oil service based engineering businesses, however the resilience of the UK economy has seen the other UK based businesses busier than they have been for some time.

STAFF

As always, my thanks go out to all our staff for their efforts in 2016.


Malcolm Perkins

Chairman

26 April 2017

2016 Report & Accounts

Our 2016 Annual Report & Accounts are now available.

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