Hospitality markets set to bolster pottery firm post-Brexit

A STRONG hospitality sector will hopefully enable Stoke-on-Trent pottery firm Churchill China to weather the worst of the Brexit storm.

The manufacturer, which has seen a 15% growth in its hospitality business during the first six months of the year, said it remained confident of full-year targets – despite the uncertainty created by the UK’s decision to leave the Single Market.

In the firm’s interim results statement, Churchill China chairman Alan McWalter said: “We have made good progress against our long term targets and have successfully completed a number of projects which we expect to contribute to the further development of the company.

“Our Hospitality business has once more reported record revenues. This progress is attributable to the targeted development of export markets and increased sales of added value products.  

“We believe that the increased scale of our Export business and our record of successful market and product development will provide further growth opportunities in line with our established strategy.

“We anticipate that the UK may continue to be affected by increased levels of uncertainty following the result of the EU referendum, but believe we hold a strong position in an attractive market.”

Overall export revenue growth was over 30% or £2.6m in absolute terms and while much of the increase was down to more favourable exchange rates, the firm saw growth in nearly all its geographic sectors.

Performance in the UK was more restrained as market growth, particularly in larger accounts, moderated.

Mr McWalter said the aim of the business was to develop steadily over the long term, meet customer requirements across diverse markets and maintain a robust financial position to allow progressive investment across business cycles.

“Whilst we anticipate that the economic environment looking forward is likely to be more uncertain, we believe that our business is well positioned to respond positively to changing conditions within our markets,” he added.

For the six months to June 30, 2016, group revenue rose 12% to £24.0m (2015: £21.4m), with total revenue growth for its Hospitality business up 15%.

Earnings before interest, tax, depreciation and amortisation increased by 18% to £2.8m (2015: £2.4m).

Operating profit was up 30% to £2.0m (2015: £1.6m), while pre-tax profit was up 29% to £2.0m (2015: £1.6m) – largely attributable to the improved operating performance.

Basic earnings per share rose 30% to 14.8p (2015: 11.4p) and the firm declared an interim dividend of 6.3p (2015: 5.6p), an increase of 12%.