Years of ploughing money into sales, marketing and product innovations triggered operating profit growth of 16 per cent at Churchill China (CHH) in 2015, as the Aim-traded maker of crockery capitalised on robust demand for its tableware. Leading the way was the hospitality business, where customers lapped up its hand-crafted Stonecast range, popular for adding colour to an industry traditionally dominated by whiteware.
Management has long made clear its plan to develop in overseas markets and this year was no exception. Sales outside of the UK rose by double-digits for the third consecutive year, as Churchill bagged big contracts with household name hotel chains such as the Hilton and Marriott, and commenced projects everywhere from the Congo to the Maldives.
But the biggest success was found closer to home in Europe. Despite feeling the effects of a weak euro and economic uncertainty in Russia and Ukraine, the group prospered on the continent from product innovation, deepening customer relationships and anti-dumping duties on Chinese ceramics.
Trading in the more competitive retail arm was less impressive. Divisional revenue fell 6 per cent, although profit was maintained at £0.9m as the group cut costs and exited lower-margin license businesses. Broker N+1 Singer upgraded its forecasts and now expects adjusted pre-tax profit of £5.7m in 2016, giving EPS of 41p (from £5.2m and 38.1p in 2015).
| CHURCHILL CHINA (CHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 770p | MARKET VALUE: | £85m | |
| TOUCH: | 755-785p | 12-MONTH HIGH: | 853p | LOW: 515p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 281p | NET CASH: | £11.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 42.3 | 2.7 | 19.2 | 14.0 |
| 2012 | 41.4 | 2.7 | 19.6 | 14.2 |
| 2013 | 43.2 | 3.4 | 25.2 | 14.6 |
| 2014 | 44.5 | 4.3 | 31.2 | 16.1 |
| 2015 | 46.8 | 5.0 | 37.3 | 18.3 |
| % change | +5 | +16 | +20 | +14 |
Ex-div: 28 Apr Payment: 26 May | ||||
