Churchill China's full-year performance beat brokers' expectations as strong hospitality unit sales offset a continued retail decline. Although, adjust for the cash pile, and the shares trade on a not so cheap 11 times expected earnings – leaving that progress looking priced-in.
Crockery sales to hotels and restaurants in the hospitality business rose 6.5 per cent year-on-year to £29.2m and the operating profit here increased 16 per cent £4.1m. Sales in the UK rose 6 per cent and a growing overseas market saw sales there up 7 per cent - driven by demand from the Middle East, including a large order from the Qatar National Conference Centre. Still, the supermarket-focused, high-volume but low-margin retail side saw sales slip 20 per cent to £13.1m. Although efforts to push products through independent shops and garden centres at higher margins lifted divisional operating profit from £0.7m to £1m. Churchill also launched 250 new products in 2011, up from 88 in 2010, and chief executive Andrew Roper expects investment in new products to drive sales in 2012.
Broker N+1 Brewin has upped its 2012 pre-tax profit forecast by 3.5 per cent to £2.9m and boosted its EPS estimate by 10 per cent to 20.4p (from £2.7m and 19.2p in 2011).
CHURCHILL CHINA (CHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 283p | MARKET VALUE: | £31m | |
| TOUCH: | 275-290 | 12-MONTH HIGH: | 330p | LOW: 263p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 253p | NET CASH: | £6.9m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 46.9 | 4.84 | 33.8 | 13.7 |
| 2008 | 42.0 | 3.36 | 13.8 | 14.0 |
| 2009 | 41.7 | 2.07 | 14.3 | 14.0 |
| 2010 | 43.7 | 2.31 | 15.8 | 14.0 |
| 2011 | 42.3 | 2.69 | 19.2 | 14.0 |
| % change | -3 | +16 | +22 | - |
Ex-div: 24 Apr Payment: 24 May | ||||
