Churchill China profits improve as it focuses on hospitality

Performance ceramics manufacturer Churchill China reported an improved first half operating profit before exceptional items of £4.2m on Thursday, up 30% from the £3.3m figure from a year ago.

The AIM-traded firm said that included a contribution of £0.2m from the acquisition of Furlong Mills.

It said its profit before exceptional items and tax was ahead 27% for the six months ended 30 June at £4.2m, while its reported profit before tax after exceptional items rose to £4.3m from £3.3m.

Adjusted earnings per share were 24% higher at 30.4p, and basic earnings per share rose to 31.3p from 24.4p year-on-year.

Cash generated from operations totalled £2.4m, compared to £1.7m in the first half of 2018, and the board declared an interim dividend of 10.3p, up 18% on the half-year distribution last year.

Total revenues were ahead 17% over last year’s first half at £31.9m, which included £2.0m from the acquisition of Furlong Mills.

Like-for-like ceramics revenue growth was 10%, improving from 6%, while export revenues were 13% higher than 2018’s first half.

Churchill reported increased sales of hospitality added-value products, and said it committed higher levels of investment in capital expenditure, the acquisition of a controlling interest in Furlong Mills and the purchase of products and brand property from Dudson.

The board said the company’s performance was continuing its long-term growth trend.

“Churchill has been substantially re-positioned as a business over the past five years,” said Churchill China chairman Alan McWalter.

“We have emphasised the development of differentiated high margin products in hospitality and exited from markets where we did not have a competitive advantage.”

McWalter said the board believed the company offered a technical performance product to attractive markets globally, with a good level of service.

“We have a well invested business supported by a strong balance sheet.”