Major ceramics manufacturer issues profit warning

Pottery manufacturer Churchill China has issued a profit warning after being hit by a “subdued” global hospitality marketing.

It’s issued a warning over its forecast for Q4 of 2024 and profitability for the year, which will come in below expectations.

Revenues in the year to September have dropped, but due to “a strong operational performance” profitability has not been affected as significantly. The macroeconomic uncertainty has continued into the most recent quarter, as the manufacturer has not seen the normal seasonal uplift in order intake from particularly the independent sector.

Churchill China also says the “softness” in key hospitality markets will continue into 2025, driven by the impact of the UK budget and political uncertainty in some key European markets.

The recent budget is set to hit the manufacturer’s cost base, which can only partially be offset by price increases. Whilst the firm is looking to take action on costs, it says its outlook for 2025 will be reduced alongside its expected profit.

Churchill China reassured that the “situation does not change the fundamentals of our business” and that the business is backed by “solid financials of operational cash generation” and a “strong unencumbered balance sheet”.

Robin Williams, Chairman of Churchill China, commented: “The current macro-economic uncertainty combined with significant increases in our cost base creates near term challenges. We are, however, confident that our core strategy will continue to deliver growth as markets improve.”