Camellia (CAM) warned alongside its full year results back in April that it was seeing weaker tea prices in 2019. Indeed, with record global tea production in 2018, an oversupplied market saw “significantly lower” average prices across all regions during the six months to 30 June. As the Mombasa auction continues to see unprecedented volumes from stock carried forward from last year, Kenyan prices have fallen by 17 per cent.
As a result, the group has swung to an underlying pre-tax loss of £4.1m. Even including an £8m release of wage provisions following settlements in Kenya and India, statutory earnings were still down against the comparable period last year. Theoretically, diverse revenue streams should somewhat offset a weaker tea market. But bear in mind over three-quarters of sales are sourced from notoriously temperamental agriculture. An odd mix of businesses, the engineering division saw an (albeit narrower) £0.3m trading loss as Brexit stockpiling and uncertainty depressed aerospace sales by 6 per cent.
Bloomberg consensus of analysts places full year adjusted pre-tax profit at £19.9m and EPS at 4.4p, rising to £22.3m and 3.2p in 2020.
CAMELLIA (CAM) | ||||
ORD PRICE: | 9,800p | MARKET VALUE: | £274m | |
TOUCH: | 9,800-10,000p | 12-MONTH HIGH: | 12,000p | LOW: 9,100p |
DIVIDEND YIELD: | 1.5% | PE RATIO: | 10 | |
NET ASSET VALUE: | 14,314p | NET CASH: | £89m |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2018 | 128 | 6.1 | 29.0 | 40 |
2019 | 117 | 3.9 | 50.7 | 42 |
% change | -8 | -36 | +75 | +5 |
Ex-div: | 29 Aug | |||
Payment: | 27 Sep | |||