Churchill China (CHH) reported a solid half-year performance, led by robust growth at the group's main hospitality division - which sells crockery to hotels and restaurants. Moreover, Churchill's operating margin rose 1.5 percentage points to 5.8 per cent, helped by a better sales mix, increased manufacturing volumes and a more favourable sterling/euro exchange rate.
The hospitality business boosted operating profit by 27 per cent in the period to £2.01m, even though sales rose by a more modest 8 per cent up at £15m. Spain was a star market with sales there having risen 18 per cent thanks in part to some local rivals going bust. Churchill is now benefiting from having targeted Europe with new products that are more appropriate for that market - such as light-weight crockery, and more varied bowl shapes.
In contrast, however, the retail division continued to report falling sales and operating profit here fell 35 per cent to £314,000. Performance was significantly affected by November's introduction of the EU anti-dumping levy on imported Chinese crockery - that meant a £100,000 hit. Management expects sales here to remain subdued for the remainder of the year.
Broker N+1 Singer expects full-year pre-tax profit of £3.1m, giving EPS of 21.9p (2012: £3.1m/19.6p).
CHURCHILL CHINA (CHH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 380p | MARKET VALUE: | £41.8m | |
| TOUCH: | 370-380p | 12-MONTH HIGH: | 380p | LOW: 302.5p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 239p | NET CASH: | £4.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 19.2 | 686 | 4.80 | 4.80 |
| 2013 | 19.7 | 1,067 | 7.60 | 4.90 |
| % change | +3 | +56 | +58 | +2 |
Ex-div: 4 Sep Payment: 3 Oct | ||||
