Churchill China feels the pressure amid challenging market

Churchill China has reported a decline in both revenue and profit for 2024, after being hit by ongoing pressures in the global hospitality sector.

Revenue for the year fell to £78.3m, down 4.9% from £82.3m in 2023. Pre-tax profit dropped to £8.5m from £10.8m, with return on sales narrowing to 10.9%, compared to 13.1% the previous year.

The Stoke-On-Trent company pointed to reduced sales volumes and a tough pricing environment as key contributors to the decline.

Operational improvements helped partially offset the financial impact, with the firm calling its profit performance “resilient” given the circumstances.

In November last year, the firm issued a profit warning after being hit by what it described as a “subdued” global hospitality market.

At the time, it warned that “softness” in key markets would likely continue into 2025, driven by economic pressures such as the UK budget and political uncertainty in parts of Europe.

David O’Connor, chief executive of Churchill China said: “2024 was a challenging year with market contraction driving lower sales. We continue to address those activities that are within our control. We have accelerated our continuous improvement programme across the factory. Correspondingly, yields have improved and we see further opportunities for significant savings through this programme. In addition, we are driving our capital expenditure to focus on innovation and cost reduction through automation and process control.

“We continue to win new installations and projects across all our markets and see strong replacement orders from our installed customer base, which highlights the resilience of our business in this current market downturn. We expect to see financial returns from our improvement activities over the coming years as the underlying macro conditions and consumer sentiment improves.”