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CHAIRMAN'S STATEMENT

 

2020 was a deeply challenging year for all of our operations, people and communities globally. The consequences of the pandemic have been unpredictable and have at times tested our resilience. However, it is testament to the quality of our management teams, our employees and our financial prudence that we came through 2020 with an underlying operating profit before tax of £13.2 million. The vast majority of our income arises from growing basic commodities and foodstuffs for which there will always be a demand.

2020 was marked by the very serious human rights abuse allegations made against our operations at Kakuzi in Kenya and in Malawi. We settled these claims and more importantly, have taken the opportunity to review the policies and procedures across the Group to ensure that they reflect international best practice. The relationship with the local communities across all our agricultural operations is critical to both our ethos and success; we continue to nurture them and have taken extensive steps to improve work practices and safeguarding measures (further discussed later in this report). The Board’s deep commitment to ensuring we live up to our aspirations in this area for the benefit of all our employees and communities will be greatly assisted by our decision to establish a new Safeguarding and Stewardship Committee (involving independent experts) and a network of new grievance mechanisms on the ground.

Climate change remains a major concern to the Group and continues to influence our long-term strategy. Reflecting this, we disposed of our interest in Horizon Farms in California. Concerns over water availability and long-term climate projections made this a good time to sell and we were pleased with the price achieved. Other strategic developments are covered in the Operational report.

The results for 2020 reflect a profit before tax of £7.8 million after significant one off net costs amounting to £8.2 million (2019: profit before tax from continuing operations £22.3 million, including provision releases and one-off items of £4.9 million)

Dividend
The Group is set up in a way that reflects our long-term approach, with financial stability and sustainability at the heart of our philosophy. I was pleased that, having deferred the 2019 final dividend until we could assess more clearly the impact of the pandemic, we were able to pay it in full. Your Board is recommending a final dividend in respect of the year ended 31 December 2020 of 144p per share.

Outlook
At this stage, whilst there are signs of the world returning closer to normality with the roll out of vaccines, we do not believe that normal trading conditions will emerge until 2022, and certain businesses will continue to feel the effect of the pandemic for some time thereafter.

We remain financially strong, with significant net cash, and have the resources to withstand a further period of disruption. The demand for our agricultural produce will remain and we are managing the business in a manner which we believe will ensure our future prosperity, whilst taking the necessary steps to manage our costs in the short term.

Directors
Jonathon Bond, who joined the Board on 6 March 2020, is taking up a new executive role which necessitates him retiring from the Board at the AGM. I should like to thank him for his contribution and wish him well for the future.

Staff
My gratitude and sincere thanks go out to all our staff for their efforts in 2020. It is thanks to their resilience, hard work and loyalty in this unprecedented and challenging year that the Group remains in such a strong position.

Malcolm Perkins
Chairman

3 May 2021

2020 ESG Report

Our 2020 ESG Report is now available.

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