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Summary
- Camellia PLC generated revenue of £114.9 million, which declined by 2.0 percent year on year in H1 FY20.
- The business activity was impacted due to the subdued global tea prices and the impact of extreme weather conditions on the production.
- Brand Architekts Group PLC generated sales of £16.3 million from continued operations, which fell by 17 percent year on year for FY20.
- The Company sold its Contract Manufacturing business for £35 million, and it is currently focused on Owned Brands business.
Camellia PLC (LON:CAM) and Brand Architekts Group PLC (LON:BAR) are consumer goods stocks. Based on 1-year performance, shares of both CAM and BAR were down by close to 27.89 percent and 39.46 percent, respectively. Shares of CAM were down by about 0.72 percent, and shares of BAR were up by nearly 1.99 percent from the last closing price (as on 29 September 2020, before the market close at 1:00 PM GMT+1).
Camellia PLC (LON:CAM) - Selling the Horizon Farms
Camellia PLC is a UK based company that is engaged in the food business. The Company is one of the top tea producers with tea estates in India, Bangladesh, Malawi and Kenya. It categorizes the business under Agriculture, Engineering and Food Service.
(Source: Company website)
H1 FY20 results (ended 30 June 2020) as reported on 25 September 2020
In H1 FY20, Camellia generated revenue of £114.9 million, which was below £117.3 million reported a year ago. The Company reported gross profit of £16.1 million that reflected a gross margin of 14.0 percent in H1 FY20. The operating loss was £15.1 million in H1 FY20 against an operating profit of £ 2.2 million in H1 FY19. Camellia reported a loss before tax of £12.9 million and loss per share of 456.2 pence in H1 FY20. The performance in H1 FY20 was impacted due to the subdued global tea prices and harsh weather conditions on the agricultural output. The pandemic further deterred the operating condition due to restriction in travel and lower demand from the hospitality sector. As on 30 June 2020, Camellia had cash of £72.8 million. The Company deferred the payment of the interim dividend for FY20 and stated the final decision over the dividend payment would be taken by the end of this year. However, the Company reinstated the final dividend for FY19 in the form of a special dividend of 102 pence per share that would be paid in November 2020. The Company is currently assessing the strength of its portfolio, and it is in the process of selling the Horizon Farms, its California joint venture. The Company decided for divestment due to the long-term impact of climate change and the limited water resource for the farm.
Production and Divisional Performance
Tea production
(Source: Company website)
In H1 FY20, the Company produced 42.0 million kilogrammes (mkg) of tea, which declined from 43.2 mkg produced a year ago. The own estate tea production was 29.0 mkg in H1 FY20. Based on the divisional performance, Agricultural segment revenue was £91.7 million in H1 FY20 that improved a bit from £90.5 million in H1 FY19. Engineering division revenue was 11.0 million, and Food Service revenue was £11.6 million in H1 FY20.
Divisional Performance in FY 2019
(Source: Company website)
Share Price Performance Analysis
1-Year Chart as on September-29-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Camellia PLC's shares were trading at GBX 6,850.00 and were down by close to 0.72 percent against the previous closing price (as on 29 September 2020, before the market close at 1:00 PM GMT+1). CAM's 52-week High and Low were GBX 9,900.00 and GBX 6,250.00, respectively. Camellia had a market capitalization of around £190.58 million.
Business Outlook
The Company highlighted that it expects the FY20 revenue to be below from that generated in FY19. The depressed tea prices would likely impact the performance in Bangladesh, Kenya and Malawi, and the pandemic would weigh down on the Food Service and Engineering business. The Company also expects a lower production of the macadamia crop this year. Camellia expects to report a profit before tax, excluding the one-off charges in FY20. It expects the longer-term outlook to be healthy, given the demand for the food products.
Brand Architekts Group PLC (LON:BAR) - Low order volumes for Christmas compared to last year
Brand Architekts Group PLC is a UK based company that is engaged in the business of beauty products and cosmetics. The Company has ten brand websites and sells direct to customers, and it also sells its brand through retailers. Brand Architekts Group is listed on the FTSE AIM All-Share index.
FY2020 results (ended 27 June 2020) as reported on 28 September 2020
(Source: Company website)
In FY20, the Company generated sales of £16.3 million from continued operations, which fell by 17 percent year on year. The performance was mainly impacted in the final quarter of the financial year when the retail outlets were closed due to the lockdown. The underlying operating profit was £0.1 million, and loss before tax was £4.3 million in FY20.
The UK sales declined by 16 percent year on year, and International sales fell by around 24 percent year on year. The overall business activity was affected by the currency devaluation of the Turkish lira and increased tariffs on cosmetic goods shipped from China to the US. The Company is currently focused on the Owned Brands business after it disposed of the Contract Manufacturing business for £35 million. As on 30 June 2020, Brand Architekts had net cash of £18.0 million and it did not announce the final dividend for FY20.
Strategy of Brand Architekts Group
(Source: Company website)
Share Price Performance Analysis
1-Year Chart as on September-29-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Brand Architekts Group PLC's shares were trading at GBX 122.90 and were up by close to 1.99 percent against the previous closing price (as on 29 September 2020, before the market close at 1:00 PM GMT+1). BAR's 52-week High and Low were GBX 198.55 and GBX 90.00, respectively. Brand Architekts Group had a market capitalization of around £20.76 million.
Business Outlook
The Company went through an operational transition after it sold the manufacturing business. The market conditions for the high street stores remain uncertain, and it experienced slow advance demand for Christmas orders as compared to the last year. The Company is focused on its online sales channel and building its distribution network in the UK and International market. Brand Architekts has relaunched several underperforming brands, and it is rationalizing its product range. Given the strength of the balance sheet, it would also explore options for acquisitions.
