Hospitality surge boosts full year sales for chinaware manufacturer
A SURGE in its hospitality business has driven revenue and profits growth for Staffordshire pottery firm Churchill China.
In its full-year results, the company said group revenue had risen 4% to £43.2m (2012: £41.4m), with operating profit up 19% to £3.4m (2012: £2.8m). Pre-tax profit was up 24% to £3.4m (2012: £2.7m) and basic earnings per share rose 29% to 25.2p (2012: 19.6p).
The company has proposed a final dividend of 9.7p (2012: 9.4p), giving a total dividend for the year of 14.6p (2012: 14.2p).
Alan McWalter, chairman, said: “2013 was another good year for Churchill China. Our strategies continue to lay down the platform for the future growth, particularly in our Hospitality business. Churchill’s strong balance sheet enables us to take a long term view of investment in all aspects of the business from factory efficiency to sales, marketing and new product development.”
Total sales for the Hospitality operation increased by £3.4m (11%) and reached an all time high of £32.8m (2012 £29.4m). Contribution to group operating profits rose to £5.1m from £4.2m.
The company said the UK market was buoyant across the second half of 2013. Despite an unprecedented level of orders in the pre-Christmas build up, it said its production and logistics operations were able to maintain the service levels.
“As UK market leader, we operate in all end-user sectors through a wide range of national and regional distributors. It is pleasing to record that our UK sales team delivered a 10% increase in sales during the period. This was indicative of healthy background demand and was not dominated by large new installations,” said the firm.
Export revenues increased by an impressive 14% in 2013. To support this strategy to grow the export business, the company said it would need substantial investment in sales, marketing and new product development.
“We believe that a spread of international markets offers a wider and therefore more stable future platform for the business,” it added.
It said the success of its design portfolio and in particular Bamboo, Vintage Prints and Stonecast, were clear evidence that the Churchill new product development and marketing teams were fully aligned to market trends.
“It is worth noting that many of our end users are asking for surface decoration, usually more associated with retail or domestic fashion, but with commercial performance criteria. This allows us to optimise the use of our manufacturing capabilities,” it added.
The firm’s Retail arm did not fare as well, with a small decline in contribution to group operating profits during the year to £1.2m (2012: £1.4m). Sales were affected by increased costs on imported ranges as a result of the EU Anti-Dumping Duties on imported products and declined by 14% to £10.4m (2012: £12.0m). The firm opted to increase prices to cover these new taxes and this resulted in reduced volumes.
