China-based oranges producer Asian Citrus spent much of last week rebutting accusations in a Hong Kong magazine questioning the company's claim to own three orange plantations in China from which it sells to 22 supermarkets. Similar accusations were made last year and the result then was the same – short sellers, particularly in Hong Kong, took advantage. The company attempted to shore up confidence by ramping up its dividend payout and announcing a share buy-back programme.
The allegations overshadowed strong first-half results, which showed a 67 per cent rise in revenues and a 52 per cent rise in pre-tax profits to £30.9m. Growth was driven by rising production as its three plantations mature, improved selling prices and a six-months contribution from the Belhai juicing business bought in 2010. Active planting programmes, the sale of saplings to local farmers and an expansion in juicing capacity should ensure growth continues. Strong cash flow is funding investment and allowed the company to increase its interim dividend payout by 50 per cent to 0.3p a share and throw in a 0.2p special dividend. The board has also authorised a £20m share buy-back programme over the next nine months.