Kent's Camellia plc updates on trading amid tea pricing issues

Kent-headquartered agricultural investment group Camellia plc said it expects revenue this year to exceed 2023's figure despite issues surrounding tea production and pricing.

The company, which has a focus on sustainability, has around 100,000 employees, and is the largest private grower of tea globally with 67 estates, noted in the trading update, that forecasting the year's outcome was difficult, not least because the majority of production and sales occurred in the second half.

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In India, production of tea last month (May) in all regions was severely affected by very dry weather which is also expected to impact yields in June, it said.

In Kenya, where there has been a revised minimum pricing mechanism and a build-up of stock in recent years, it looked like lower prices were likely to continue for the remainder of this year, Camellia added.

The weaker prices in Kenya have also impacted Malawi tea demand, it told investors, with further softening of prices here too. Production volumes in Malawi remain in line with expectations.

The groups' closure of Kent fruit grower Bardsley was progressing, the parent company added, with two major leases now exited and negotiations with the remaining landlords ongoing.

"Asset disposals are also underway and we are on track to conclude the winding up process before the end of the year," the firm said.

"We expect to report a reduced loss for the year from Bardsley in the range of £3.5-4.5 million (2023: Loss £15.6 million)," it said in the statement.

Camellia also updated on its disposal of its interest in BF&M to Argus Group, which it said had been "more complex and the approval process more protracted than expected".

"While we are still confident the sale of our stake will go ahead, further delays in the regulatory approval process mean we now expect completion in the latter part of 2024. The sale of BF&M is expected to result in cash consideration of $100m payable to Camellia, before expenses," it said.

As at the end of March this year, Camellia had net cash of £21.7 million and investment portfolios with a market value of £38.1 million.