Profits rise at Churchill China after strong year
STOKE on Trent pottery manufacturer Churchill China has seen full year profits and margins rise after a strong trading year.
The firm, which makes and distributes ceramic and related products to the hospitality and retail markets, said group operating profit increased by 4% to £2.8m (2011: £2.7m) with margins rising from 6.4% to 6.8%. Earnings before interest, tax, depreciation and amortisation fell slightly by £0.2m to £4.4m.
Pre-tax profits increased by 15% to £3.1m (2011: £2.7m) as the improved trading performance was enhanced by a notional interest credit of £0.2m (2011: £nil) from the group pension scheme, which it said reflected the improved funding position at the start of the year.
Earnings per share improved by 16% to 22.2p (2011: 19.2p).
It said it continued to generate strong cash flows from operations although, at £3.4m, these were at lower levels than last year (2011: £5.9m) when it had significantly reduced levels of working capital. The level of cash generation was again enhanced by a reduction in receivables, which fell to £7.3m (2011: £7.8m), offsetting a further rise in inventory as it expanded its Hospitality product range.
As a result, year-end net cash levels and deposit balances increased slightly to £7.0m (2011: £6.9m).
Jonathan Sparey, chairman of Churchill China, said: “Churchill China has delivered a good set of results for 2012 and has started 2013 on a positive note. We have an ambitious programme of new product development to drive future returns and I am confident we will continue to improve our operating performance in 2013.”
He said the firm was confident that the business strategies for both its Hospitality and Retail activities would deliver improved returns, allowing investment in the group’s UK manufacturing base.
“We expect our Hospitality business to benefit from an increased level of new product introductions and to generate improved returns on investments made in 2012,” added Mr Sparey.
“The recently imposed EU anti-dumping duty surcharges on Chinese ceramics is likely to have an effect on Retail margins in the short term, due to disruption of the supply chain and the natural delay in securing price increases. Given our UK manufacturing capacity we confidently expect they will have a positive effect on our revenues in the medium and longer term.”
