Camellia PLC on Wednesday said it swung to a profit despite decreased revenue in a ‘very challenging’ first half, and maintained a stabled interim dividend.

The Kent-based agriculture and engineering services firm reported a pretax profit of £4.9 million in the first six months of 2023, compared with a £16.1 million loss the year before. Its adjusted loss ‘significantly reduced’ to £12.5 million from £17.6 million.

Revenue decreased 2% to £110.5 million from £112.8 million. Camellia said this reflected lower sales from its Agriculture division thanks to the pound strengthening against its operating currencies, and to the falling price of macadamia nuts.

‘The first half has been a very challenging period,’ commented Chair Malcolm Perkins.

‘Generally higher rates of inflation (particularly in wages) and oversupplied commodity markets in tea, macadamia and arable crops are contributing to a difficult operating environment.’

Administrative expenses increased to £23.1 million from £20.4 million. However distribution costs decreased to £4.6 million from £5.1 million, and Camellia gained £18.0 million from the impairment reversal of an investment in associate company BF&M Ltd.

Camellia declared an interim dividend of 44 pence per share for the half year, unchanged from last year.

Camellia also said it had a strong balance sheet ‘with substantial liquidity,’ comprising £26.8 million net cash and equivalents at June 30. However, this was down from £37.1 million at the same time one year prior.

Going forward, Perkins said: ‘Our financial results for the full year remain largely dependent on Agriculture where the majority of harvesting, and sales, takes place in the second half of the year.

‘However, taking account of current trends, revenue is expected to be broadly in line with that of last year and the group is expected to record a single digit adjusted loss for the year.’

Camellia said it remains focused on diversifying its interests in the agriculture sector, and disinvesting business which carry fewer long-term strategic advantages.

Shares in Camellia were down 4.0% at 5,256.00 pence in London around noon on Friday.

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