Churchill China’s (CHH) has yet to reap the benefits of its acquisition of brand and intellectual property from fine china company Dudson, according to Churchill chief executive David O’Connor. The manufacturer and distributor of tabletop products, which agreed the deal in April 2019, bought some of Dudson’s printing, manufacturing and glazing machinery, along with a kiln, which could boost Churchill’s finished firing capacity by between 50 to 70 per cent in a couple years’ time. Churchill has since re-engineered and replicated some products, and the first round of re-launches took place in June, though this operational progress came too late to influence its half-year performance.
Churchill has also expanded storage capacity via its new European warehouse, which forms part of its Brexit planning strategy. “It was something that we were going to do anyway,” Mr O’Connor said, but Brexit brought the move forward by between 12-18 months, and the facility went live in early 2019. Churchill’s working capital requirements subsequently rose by 26 per cent on last year’s first half period, reflecting a corresponding inventory increase along with higher sales.
House broker N+1 Singer forecasts adjusted full-year pre-tax profits and EPS of £10.7m and 76.5p, rising to £11.7m and 84.6p in 2020.
| CHURCHILL CHINA (CHH) | ||||
| ORD PRICE: | 1,600p | MARKET VALUE: | £ 176m | |
| TOUCH: | 1,570-1,630p | 12-MONTH HIGH: | 1,635p | LOW: 935p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 358p | NET CASH: | £13.1m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 27.2 | 3.3 | 24.4 | 8.7 |
| 2019 | 31.9 | 4.3 | 31.3 | 10.3 |
| % change | +17 | +30 | +28 | +18 |
| Ex-div: | 12 Sep | |||
| Payment: | 04 Oct |
