Despite some currency translation issues and a drop in retail sales, Churchill China (CHH) recorded an excellent set of results for the first half of 2015. Key to an increase in margins and a 12 per cent boost in operating profit has been the demand for the recently launched Stonecast crockery range, which contributed £1.7m to sales in the period - a like-for-like increase of 260 per cent - and should generate £4m turnover this year.
Chief executive David O'Connor has "never seen anything like" the demand for the products, which have proved very popular with major hotel chains across Europe and North America, where the company continues to build distribution channels.
In fact, one of the biggest challenges for Churchill has been increasing supply to meet demand from its hospitality customers. Strong sales at the end of 2014 left stock levels low, forcing management to concentrate on rebuilding its inventory in time for the busy second half, when profits are expected to be twice those of the six months to June.
Broker N+1 Singer expects adjusted pre-tax profit of £4.8m and EPS of 34.6p this calendar year, up from £4.4m and 31.8p in 2014.
CHURCHILL CHINA (CHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 560p | MARKET VALUE: | £61.6m | |
| TOUCH: | 550-570p | 12-MONTH HIGH: | 620p | LOW: 483p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 259p | NET CASH: | £6.4m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 20.9 | 1.4 | 10.0 | 5.1 |
| 2015 | 21.4 | 1.6 | 11.4 | 5.6 |
| % change | +3 | +12 | +14 | +10 |
Ex-div: 10 Sep Payment: 1 Oct | ||||
