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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Churchill China Plc | LSE:CHH | London | Ordinary Share | GB0001961035 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1,200.00 | 1,100.00 | 1,250.00 | 0.00 | 07:30:02 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Misc Homefurnishings Stores | 83.08M | 7.9M | 0.7179 | 16.72 | 131.97M |
From Apr 2019 to Apr 2024
TIDMCHH
RNS Number : 9944I
Churchill China PLC
27 March 2018
For immediate release 27 March 2018
CHURCHILL CHINA plc
("Churchill China" or the "Company" or the "Group")
PRELIMINARY RESULTS
For the year ended 31 December 2017
Churchill China plc (AIM: CHH), the manufacturer and global distributor of performance ceramic and related products to hospitality and retail markets, is pleased to announce its preliminary results for the year ended 31 December 2017.
Key Highlights:
-- Group revenue up 5% to GBP53.5m (2016: GBP51.1m) - Hospitality revenue growth 8% (2016: 13%) - Group export revenues up 19% (2016: 27%) - Exports represent 55% (2016: 49%) of Group revenue -- Operating profit before exceptional item up 17% to GBP7.5m (2016: GBP6.4m) -- Profit before exceptional item and tax up 15% to GBP7.5m (2016: GBP6.5m) -- Adjusted earnings per share up 15% to 55.3p (2016: 48.2p) -- Exceptional profit on disposal of surplus property GBP0.3m (2016: GBPnil) -- Profit before tax GBP7.8m (2016: GBP6.5m) -- Basic earnings per share up 21% to 58.4p (2016: 48.2p) -- Proposed final dividend up 16% to 17.2p (2016: 14.8p) -- Cash generated from operations GBP7.7m (2016: GBP6.7m) -- Good progress against key strategic objectives
Alan McWalter, Chairman of Churchill China, commented:
"I am pleased that I can once again report a strong performance in the year. We have continued to make progress against our long term targets and further invested in our business. We look forward to the coming year with confidence."
For further information, please contact:
Churchill China plc Tel: 01782 577566 David O'Connor / David Taylor Buchanan Tel: 020 7466 5000 Mark Court / Sophie Wills / Gemma Mostyn-Owen N+1 Singer Tel: 0207 496 3000 Richard Lindley / Rachel Hayes
This announcement contains information which, prior to its disclosure, was considered inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR)
CHAIRMAN'S STATEMENT
Introduction
I am pleased that I can once again report a strong performance in the year. We have continued to make progress against our long term targets and have delivered good returns from the development of our strong market position. In export markets we have increased the proportion of value added products within our product range and further invested across our operations. Our aim is always to deliver a balance between improved performance year on year and to maintain investment in support of our long term strategies. We are pleased to have achieved this again during 2017.
Financial Review
Total revenues increased by 5% to GBP53.5m (2016: GBP51.1m) with further strong growth in Hospitality export revenues offsetting lower Retail sales as the balance of our business changed in line with our strategic aims. UK revenues were 8% lower at GBP24.0m (2016: GBP26.2m). Export revenues were GBP4.6m higher (+19%) at GBP29.5m (2016: GBP24.9m) of which GBP1.9m was due to more favourable exchange rates.
Gross margins have improved with much of our increased revenue coming from sales of value added product.
Operating profit before exceptional items increased by 17% to GBP7.5m (2016: GBP6.4m). Operating margins improved to 13.9% (2016: 12.5%). Operating profit benefitted from a further move towards added value, differentiated products and from favourable exchange rates. We have used much of the additional margin to accelerate our investment in market development and in reorganising our approach to key markets with an overall rise in sales and marketing expenditure of GBP0.7m .
Earnings before interest, tax, depreciation and amortisation increased by 12% to GBP9.1m (2016: GBP8.1m).
Profit before exceptional items and tax rose by 15% to GBP7.5m (2016: GBP6.5m), as a result of our improved operating performance.
Adjusted earnings per share improved by 15% to 55.3p (2016: 48.2p).
During the year we disposed of surplus property at Whieldon Road, Stoke on Trent for a total consideration of GBP1.1m. The proceeds will be reinvested into our main Sandyford site. The profit on disposal of GBP0.3m has been treated as exceptional.
Profit before tax and after exceptional items rose to GBP7.8m from GBP6.5m in 2016.
Basic earnings per share, including the above exceptional profit, improved by 21% to 58.4p (2016: 48.2p)
We have also continued to generate strong operating cash flows. Operating cash generation was GBP7.7m (2016: GBP6.7m). Working capital requirements were slightly higher than last year at GBP0.2m (2017: GBP0.1m) mainly due to a further increase in inventory to support higher sales, a wider product range and customer service. The cash spend on capital projects was GBP2.1m (2016: GBP2.5m). We expect capital spend to rise in 2018 as we continue to invest in capacity, capability and efficiency. At the year end, net cash and deposit balances had risen by GBP2.9m to GBP15.6m (2016: GBP12.7m).
Dividend and shareholder return
The Board is recommending a 16% increase in the final dividend to 17.2p per share (2016: 14.8p), giving a total of 24.6p for the year (2016: 21.1p). We are pleased that the growth in profitability and continued strong cash generation in the year has allowed us to again raise the dividend at an above average rate. If approved, the final dividend will be paid on 24 May 2018 to shareholders on the register on 27 April 2018, with the ex-dividend date being 26 April 2018.
Good shareholder returns have again been achieved, reflecting both dividend growth and share price performance. Overall Total Shareholder Returns were 36% (2016: 22%) during the year.
Business
Revenues have increased across our business with strong progress in Hospitality more than offsetting a further planned contraction in Retail activity. Exports now represent 55% of Group revenues.
Total sales to our Hospitality customers increased by GBP3.4m (8%) and reached a new record of GBP47.4m (2016: GBP44.0m). Hospitality sales now represent almost 90% of Group revenue.
The strong performance in export markets reported in the first half of 2017 has been followed by further growth in the second half. Overall export sales grew by 19%. Whilst there has been some further benefit from currency this year, we continue to generate real growth in our target overseas markets. Progress over the medium term has been very good with exports increasing by a compound annual rate in excess of 20% over the last three years. Targeted new product introductions have been supported by market development covering both extra sales resource and the planned development of our international distribution network. Growth has again been strongest in Europe, the region where we have prioritised development and where we have benefited from Anti-Dumping Duties on imports from China. Growth in North America and the Rest of the World has also been positive.
As we expected, the UK has been affected by more difficult conditions with a reduction in new restaurant openings. Revenues in this market have reduced by 6%. We have reviewed our UK market position and changed our approach to reflect current activity levels. We have adapted our management focus and increased the amount of marketing support, including new product development, allocated to the UK. We have retained our market leading position and continue to benefit from a consistent level of replacement sales. The strength of our established relationships with end users, distributors and agents in the UK and worldwide continues to be of great value to the business.
We have again increased the proportion of our revenue represented by added value products, building on the trend established over several years. Stonecast and Studio Prints continue to perform well and to gain wide market acceptance.
Retail has continued to perform at a satisfactory level in accordance with our strategic targets. Revenues were lower at GBP6.1m (2016: GBP7.1m) with the majority of the reduction attributable to the UK. We have maintained margin levels at the expense of lower volumes.
The main drivers of our strategy remain to progressively increase the proportion of revenue represented by higher added value ranges offering profit opportunities both to our customers and to Churchill and additionally to extend the reach of our operations, building a more broad based business. Our products offer a well designed and differentiated range to our customers and deliver considerable technical performance benefits.
Operations
Our manufacturing and logistics operations continue to support the development of the business. The improvement in our market position has generated a matching requirement to change and improve the operation of the fulfilment side of our business to meet revised needs. We have made significant progress in addressing new challenges in relation to capacity, product and process capability, quality and customer service across a wider product range and a more extended geographic footprint.
A number of important manufacturing and logistics projects have been completed during the year. We have increased our capacity to manufacture added value products, improved process flow in production and increased our ability to meet higher customer service requirements during peak demand periods.
We expect to make further progress during 2018 in relation to the expansion of capacity at our UK manufacturing site and in supporting the continued growth of our export business.
People
One of the major objectives in our forward plan is to ensure that we have the right people across our business to meet our aspirations. We continue to believe that we have a skilled, loyal and well motivated workforce and once again I thank them for their effort and commitment across the year.
During the year we have increased our focus on the assessment of future requirements for workforce skills and experience across our business. We have elevated the training and development of our staff as a core element of our strategy and have reflected this in our management structure. We operate a number of continuous improvement programmes which, whilst principally designed to increase our operational effectiveness, also give an important opportunity for staff to learn new skills.
Prospects
We are pleased with the progress we made in 2017 both in terms of the reported performance for the year and, perhaps more importantly, in the progress we have made in support of the future development of Churchill. Additional margin has allowed us to make further investments across a number of areas which we believe will generate profitable growth. We expect to generate a return from this expenditure in 2018 and beyond. We do, however, recognise that there is a higher level of general uncertainty in a number of markets and we have reflected this within our strategic process.
The focus of our strategy remains continued innovation to improve the value our products offer to our customers and investment across the business to allow us to extend the breadth of the markets we serve. We continue to develop new investment opportunities in support of our future aspirations. Our business has a good position in attractive markets, is well invested and has a strong financial base. Performance in the year to date has been good and we look forward to the coming year with confidence.
Alan McWalter
Chairman
27 March 2018
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Churchill China plc
Consolidated Income Statement
for the year ended 31 December
2017
Audited Audited
Year to Year to
31 December 31 December
2017 2016
GBP000 GBP000
Note
Revenue 1 53,530 51,102
============ ============
Operating profit
before exceptional
item 7,460 6,398
Exceptional item - profit
on disposal 2 315 -
------------ ------------
Operating profit 7,775 6,398
Share of results of associate
company 159 157
Finance income 3 66 80
Finance costs 3 (225) (120)
------------ ------------
Profit before exceptional
item and income tax 7,460 6,515
Exceptional item - profit
on disposal 2 315 -
------------ ------------
Profit before income
tax 7,775 6,515
Income tax expense 4 (1,361) (1,230)
------------ ------------
Profit for the year 6,414 5,285
============ ============
Pence Pence
per per
share Share
Basic earnings per ordinary
share 5 58.4 48.2
Adjusted earnings per
ordinary share 5 55.3 48.2
Diluted basic earnings
per ordinary shares 5 57.9 47.8
Adjusted diluted earnings
per ordinary share 5 54.8 47.8
Churchill China
plc
Consolidated Statement of Comprehensive
Income
for the year ended 31 December
2017
Audited Audited
Year
Year to to
31 December 31 December
2017 2016
GBP000 GBP000
Other comprehensive income /
(expense)
Items that will not be reclassified
to profit or loss:
Actuarial gain / (loss) on
retirement benefit obligations 1,344 (5,188)
Items that may be reclassified subsequently
to profit or loss:
Impact of change in UK tax
rate on deferred tax on - 12
revaluation
reserve
Currency translation
differences (33) 60
------------ ------------
Other comprehensive income /
(expense) 1,311 (5,116)
Profit for the
year 6,414 5,285
Total comprehensive income for
the period 7,725 169
============ ============
Attributable
to:
Equity holders
of the Company 7,725 169
============ ============
All the above figures relate
to continuing operations
Churchill China
plc
Consolidated
Balance Sheets
as at 31 December
2017
Audited Audited
31 December 31 December
2017 2016
GBP000 GBP000
Assets
Non Current
assets
Property, plant
and equipment 14,542 14,897
Intangible assets 101 89
Investment in
associates 1,547 1,388
Deferred income
tax assets 1,197 1,658
17,387 18,032
Current assets
Inventories 9,816 9,102
Trade and other
receivables 8,650 9,479
Other financial
assets 3,000 3,005
Cash and cash
equivalents 12,577 9,734
------------ ------------
34,043 31,320
------------ ------------
Total assets 51,430 49,352
============ ============
Liabilities
Current liabilities
Trade and other
payables (10,024) (10,310)
Current income
tax liabilities (831) (852)
------------ ------------
Total current
liabilities (10,855) (11,162)
------------ ------------
Non-current
liabilities
Deferred income
tax liabilities (775) (834)
Retirement benefit
obligations (5,907) (8,731)
Total non-current
liabilities (6,682) (9,565)
------------ ------------
Total liabilities (17,537) (20,727)
============ ============
Net assets 33,893 28,625
============ ============
Equity attributable to owners
of the Company
Issued share
capital 1,103 1,103
Share premium
account 2,348 2,348
Treasury shares (579) (575)
Other reserves 1,565 1,544
Retained earnings 29,456 24,205
------------ ------------
33,893 28,625
============ ============
Churchill China
plc
Consolidated Statement of
Changes in Equity
as at 31 December
2017
Retained Share Share Treasury Other
earnings capital premium shares reserves Total
account
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2016 26,181 1,101 2,348 (144) 1,439 30,925
--------- -------- -------- --------- --------- --------
Comprehensive
income
Profit for the
period 5,285 - - - - 5,285
Other comprehensive
income - - - - - -
Depreciation
transfer - gross 12 - - - (12) -
Depreciation
transfer - tax (2) - - - 2 -
Deferred tax -
change in rate - - - - 12 12
Actuarial gains
- net (5,188) - - - - (5,188)
Currency translation - - - - 60 60
Total comprehensive
income 107 - - - 62 169
--------- -------- -------- --------- --------- --------
Transactions
with owners
Dividends (2,085) - - - - (2,085)
Proceeds of
share issue - 2 - 2 - 4
Share based
payment 117 - - - 43 160
Deferred tax
- share based
payment 27 - - - - 27
Treasury shares (142) - - (433) - (575)
Total transactions
with owners (2,083) 2 - (431) 43 (2,469)
--------- -------- -------- --------- --------- --------
Balance at 31
December 2016 24,205 1,103 2,348 (575) 1,544 28,625
Comprehensive
income
Profit for the
period 6,414 - - - - 6,414
Other comprehensive
income
Depreciation
transfer - gross 12 - - - (12) -
Depreciation
transfer - tax (2) - - - 2 -
Deferred tax
- change in rate - - - - -
Actuarial losses
- net 1,344 - - - - 1,344
Currency translation - - - - (33) (33)
Total comprehensive
income 7,768 - - - (43) 7,725
--------- -------- -------- --------- --------- --------
Transactions
with owners
Dividends (2,433) - - - - (2,433)
Proceeds of
share issue - - - 3 - 3
Share based
payment 123 - - - 64 187
Deferred tax
- share based
payment 57 - - - - 57
Treasury shares (264) - - (7) - (271)
Total transactions
with owners (2,517) - - (4) 64 (2,457)
--------- -------- -------- --------- --------- --------
Balance at 31
December 2017 29,456 1,103 2,348 (579) 1,565 33,893
========= ======== ======== ========= ========= ========
Churchill
China plc
Consolidated Cash
Flow Statement
for the year ended 31 December
2017
Audited Audited
Year to Year to
31 December 31 December
2017 2016
GBP000 GBP000
Cash flows from
operating activities
Cash generated from
operations (note
6) 7,743 6,744
Interest received 66 80
Interest
paid - (1)
Income tax
paid (1,198) (813)
Net cash generated from operating
activities 6,611 6,010
------------ ------------
Cash flows from
investing activities
Purchases of property, plant
and equipment (2,155) (2,436)
Proceeds on disposal of property,
plant and equipment 1,139 93
Purchases of intangible
assets (54) (81)
Net cash used in
investing activities (1,070) (2,424)
------------ ------------
Cash flows from
financing activities
Issue of ordinary
shares 3 4
Purchase of treasury
shares (271) (575)
Dividends
paid (2,433) (2,085)
Net sale / (purchase)
of other financial
assets 5 (505)
Net cash used in
financing activities (2,696) (3,161)
------------ ------------
Net increase in cash and cash
equivalents 2,845 425
Cash and cash equivalents at
the beginning of the year 9,734 9,307
Exchange (loss) / gain on cash
and cash equivalents (2) 2
Cash and cash equivalents at
the end of the year 12,577 9,734
------------ ------------
1. Segmental
analysis
for the year ended
31 December 2017
As noted in the Company's statutory accounts for
the year ended 31 December 2016 the format of reporting
to the Chief Operating Decision Maker, the Board
of Churchill China plc, changed from 1 January
2017. As the degree of integration of the Company's
previously identified business segments has increased,
the ability to determine an allocation of costs
and profits objectively between them has reduced.
The majority of operations within the Group, including
people, assets and processes, are now merged and
managed on a single market basis. The allocations
necessary to produce segmental profit figures are
no longer analysed internally. The Chief Operating
Decision Maker now reviews profitability on a Group
basis and makes management decisions on a single
entity basis.
The figures given below analyse Group revenue between
markets and geographic regions.
Audited Audited
Year to Year to
31 December 31 December
2017 2016
GBP000 GBP000
Revenue
Hospitality 47,395 43,961
Retail 6,135 7,141
------------- -------------
53,530 51,102
------------- -------------
Revenue
United Kingdom 24,016 26,207
Rest of Europe 17,688 14,605
North America 6,470 4,966
Rest of the
World 5,356 5,324
53,530 51,102
------------- -------------
2. Exceptional item
During the year the Group disposed of surplus property
at Whieldon Road, Stoke on Trent for a total consideration
of GBP1,100,000. The profit arising on this sale
has been treated as exceptional given its size
and nature. A deferred tax credit of GBP28,000
arising on the sale has also been treated as exceptional.
3. Finance income
and costs
Audited Audited
Year to Year to
31 December 31 December
2017 2016
GBP000 GBP000
Finance income
Interest income on cash and
cash equivalents 66 80
Finance income 66 80
---------------- ------------
Finance cost
Interest on pension
scheme (225) (119)
Other interest - (1)
Finance costs (225) (120)
---------------- ------------
The interest cost arising from pension
schemes is a non cash item.
4. Income
tax expense
Audited Audited
Year to Year to
31 December 31 December
2017 2016
GBP000 GBP000
Current taxation 1,177 1,086
Deferred taxation 184 144
Income tax
expense 1,361 1,230
---------------- ------------
5. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit on ordinary activities after income tax of GBP6,414,000 (2016: 5,285,000) and on 10,964,462 (2016: 10,972,257) ordinary shares, being the weighted average number of ordinary shares in issue during the year. Adjusted earnings per share is calculated after adjusting for the post tax effect of the exceptional profit on disposal of property of GBP343,000 (2016: nil) (Note 2).
Audited Audited
Year to Year to
31 December 31 December
2017 2016
Pence per share
Basic earnings per
share 58.4 48.2
Less: Exceptional (3.1) -
item - profit on disposal
Adjusted earnings
per share 55.3 48.2
------ -------------
Diluted basic earnings per ordinary share is based on the profit on ordinary activities after income tax of GBP6,414,000 (2016: GBP5,285,000) and on 11,062,013 (2016: 11,067,101) ordinary shares, being the weighted average number of ordinary shares in issue during the year of 10,964,462 (2016: 10,972,257) increased by 97,551 (2016: 94,844) shares, being the weighted average number of ordinary shares which would have been issued if the outstanding options to acquire shares in the Group had been exercised at the average price during the period. Adjusted diluted earnings per share is calculated after adjusting for the post tax effect of the exceptional profit on disposal of property of GBP343,000 (2016: GBPnil) (Note 2).
Audited Audited
Year to Year to
31 December 31 December
2017 2016
Pence per share
Basic earnings per
share 57.9 47.8
Less: Exceptional (3.1) -
item - profit on disposal
Adjusted earnings
per share 54.8 47.8
------------- -------------
6. Reconciliation of operating profit to net cash
inflow from continuing activities
Audited Audited
Year
Year to to
31 December 31 December
2017 2016
GBP000 GBP000
Cash flows from operating
activities
Operating profit 7,775 6,398
Adjustments for:
Depreciation 1,621 1,716
(Profit) / loss on disposal
of property, plant and equipment (317) (8)
Charge for share
based payment 187 160
Defined benefit pension cash
contribution (1,430) (1,430)
Changes in working
capital
Inventory (714) (742)
Trade and other
receivables 785 (750)
Trade and other
payables (164) 1,400
Net cash inflow from
operations 7,743 6,744
------------ ------------
7. Dividend
The final dividend, which has not been provided for, has been calculated on 10,962,323 (2016: 10,955,172) ordinary shares, being those in issue at 31 December 2017 qualifying for dividend and at a rate of 17.2p (2016: 14.8p) per 10p ordinary share. The dividend will be paid on 24 May 2018 to shareholders on the register at 27 April 2018, subject to approval at the Company's Annual General Meeting.
The total dividend paid and proposed in respect of the year is 24.6p (2016: 21.1p).
8. Share buybacks
The Company bought back 27,000 shares during the year and may consider making further similar sized, ad hoc share buybacks going forward at the discretion of the Board and subject to shareholder authorities being renewed at the forthcoming Annual General Meeting.
9. Basis of preparation and accounting policies
The financial information included in the preliminary announcement for year to 31 December 2017 has been audited and an unqualified audit report has been issued.
The preliminary financial statements represent extracts from those audited accounts but do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.
The Group's financial statements have been prepared in accordance with IFRS as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS, under the historical cost convention as modified by the revaluation of land and buildings, available for sale financial assets, and financial assets and liabilities (including derivative instruments) at fair value through the profit and loss account. The same accounting policies, presentation and methods of computation are followed in the preliminary financial statements as were applied in the Group's financial statements for the year ended 31 December 2017.
Statutory accounts for the year ended 31 December 2016 have been delivered to the Registrar of Companies. Statutory accounts for the year ended 31 December 2017 will be delivered to the Registrar of Companies after the Company's Annual General Meeting and will also be available on the Company's website (www.churchill1795.com) on or around 23 April 2018 and will be sent to shareholders on the same date.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUMCWUPRGMQ
(END) Dow Jones Newswires
March 27, 2018 02:00 ET (06:00 GMT)
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