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I am pleased to report the results for 2018, which reflects a profit before tax from continuing operations of £52.5 million and which includes two significant provision releases amounting to £14.4 million (2017: profit before tax from continuing operations £27.6 million).

Trading during 2018 was generally strong and reflected not only good weather and some firm markets but also the progressive investment that we have been making in our businesses. Our tea operations saw exceptional outputs, with record production of 103mkg. Our two other core crops also performed well, and with more benign weather, the macadamia crop improved in volume and we achieved a record avocado harvest. Our UK businesses also returned to a collective profit.

As set out in more detail in the Chief Executive’s report, we made a number of acquisitions and disposals in the year as we continue to refine and adapt our business portfolio in line with our strategy. A majority shareholding in Jing Tea was acquired and we also entered into agreements to purchase two farms in Tanzania. In an important development after the year-end, we acquired two tea estates in Assam, which, together with our existing estates, we believe makes us the largest private tea producer in the world. These are long-term projects in line with our strategy to diversify our production footprint and add value to our products.

Whilst the results for the year were encouraging, we remain alert to global economic uncertainties and the potential challenges that we may face. Climate change and political instability continue to be major concerns and the steps that we are undertaking to help mitigate the effects of these are set out in the Chief Executive’s report.

Overall, 2018 was a very good year for the Group in terms of both strategic execution and financial performance. With our strong market positions in our core crops and significant net cash resources, we are well placed to take advantage of any opportunities which uncertain markets may present.

Your Board is recommending a final dividend of 102p per share which, together with the interim dividend already paid of 40p per share, brings the total distribution for the year to 142p per share compared with 135p per share for 2017.

During 2019 we will consolidate the progress made in 2018 as we continue to invest in our business and integrate the new acquisitions. Whilst it remains too early to make meaningful comments about individual crops, tea auction volumes in Kenya have been very high for some months with average sale prices below the cost of production since November which is of some concern. Furthermore, these volumes are impacting the prices in Malawi and there is a risk that our other tea markets could be adversely affected as their seasons begin. We continue to monitor and prepare for Brexit and, whilst we expect there to be some impact on our UK businesses, we are confident that the majority of our operations will be largely unaffected.

As always, my thanks go out to all our staff for their efforts in 2018.

Malcolm Perkins

10 April 2019

2019 ESG Report