REG - Churchill China PLC - Interim Results

Churchill ChinaAnnouncement

30/08/2018 07:05

RNS Number : 1959Z
Churchill China PLC
30 August 2018
 






For immediate release


30 August 2018




 
 
 
CHURCHILL CHINA plc
("Churchill China" or the "Company" or the "Group")
 
INTERIM RESULTS
For the six months ended 30 June 2018
 
Churchill China plc (AIM: CHH), the manufacturer of innovative performance ceramic products serving hospitality markets worldwide, is pleased to announce its interim results for the six months ended 30 June 2018.
 
Key Highlights:
·     Group revenue up 6% to £27.2m (H1 2017: £25.8m)
-      Constant currency growth 6% (H1 2017: 2%)
-      Hospitality revenue growth 9% (H1 2017: 8%)
-      Group export revenues up 17% (H1 2017: 19%)
-      Exports now represent 63% (H1 2017: 57%) of Group revenue
·     Operating profit up 22% to £3.3m (H1 2017: £2.7m)
·     Operating margin 11.9% (H1 2017: 10.3%)
-      Further conversion of standard to added value product
·     Profit before tax up 24% to £3.3m (H1 2017: £2.7m)
·     Earnings per share up 24% to 24.4p (H1 2017: 19.6p)
·     Interim dividend up 18% to 8.7p (H1 2017: 7.4p)
·     Cash generated from operations £1.7m (H1 2017: £1.1m)
·     Good progress against strategic objectives
 
Alan McWalter, Chairman of Churchill China, commented:
"I am pleased to report that Churchill has again delivered a strong performance in the first six months of the year with increased revenues and margins contributing to good profit growth and continued progress against our strategic targets."
 
For further information, please contact:
 




Churchill China plc


Tel: 01782 577566




David O'Connor / David Taylor


 




 


 




Buchanan


Tel: 020 7466 5000




Mark Court / Sophie Wills / Gemma Mostyn-Owen


 




 


 




N+1 Singer


Tel: 0207 496 3000




Richard Lindley / Rachel Hayes


 




 


 




This announcement contains information which, prior to its disclosure, was considered inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR)
 
 
CHAIRMAN'S STATEMENT
Introduction
 
I am pleased to report that Churchill has again delivered a strong performance in the first six months of the year with increased revenues and margins contributing to good profit growth and continued progress against our strategic targets. We have increased our sales into Hospitality and export markets and have again improved margins following further conversion of standard to added value products.
 
Churchill benefits from a strong position in attractive and growing markets. Our business supplies differentiated, technical performance products into markets that demonstrate a high level of repeat sales where we enjoy long term relationships with our customers. We have continued to both maintain a strong financial position and to deliver increased dividends to shareholders.
 
Financial Review
 
Total revenues increased by 6% to £27.2m (H1 2017: £25.8m). In constant currency, revenues increased by 6% (H1 2017: 2%). Export sales were £2.3m (16%) higher. UK sales reduced, as expected, across our business by £0.9m. Growth in Hospitality revenue has more than offset lower Retail sales as the balance of our business changes. Hospitality revenues now represent over 90% of our total sales.
 
Gross margins have improved as the proportion of our revenue from sales of added value product has increased.  This allows ongoing investment in sales, market and product development and enables us to deliver increased operating margins and return to shareholders. The gain in operating margin from 10.3% to 11.9% continues the improving trend established several years ago. Operating profit increased by 22% to £3.3m (H1 2017: £2.7m).
 
Earnings before interest, tax, depreciation and amortisation increased by 15% to £4.2m (H1 2017: £3.6m).
 
Profit before tax rose by 24% to £3.3m (H1 2017: £2.7m), mainly as a result of our improved operating profit.  The first half year is increasingly important within our overall annual performance as our business becomes more orientated towards export markets where demand is generally evenly split between the first and second half years.
 
Earnings per share improved by 24% to 24.4p (2016: 19.6p)
 
Cash flows have again been strong, operating cash generation was £1.7m (H1 2017: £1.1m). The seasonal increase in working capital in the first half year was in line with 2017 comparatives, with a small reduction in inventory levels. The cash spend on capital projects was £0.9m (H1 2017: £1.1m). We expect capital spend in the second half year to rise with the completion of a number of projects. At the end of the period, net cash and deposit balances were £13.7m (H1 2017: £10.3m, 2017: £15.6m).
 
Dividend
The Board is pleased to declare an 18% increase in the interim dividend to 8.7p per share (2017: 7.4p). This increase reflects the increasing importance of the first half year to our overall profitability. Our policy remains to raise dividends in line with growth in long term profit growth and we are pleased that we have once again been able to provide an increase in the cash return to shareholders. The interim dividend will be paid on 5 October 2018 to shareholders on the register on 14 September 2018, with the ex-dividend date being 13 September 2018.
 
Business
 
Overall revenues have continued to grow steadily in line with our strategic aims and were 6% ahead of the comparable period last year at £27.2m (2017 H1 £25.8m). Underlying growth before the impact of currency changes was higher at 6% (2017 H1: 2%) with continued progress in Hospitality more than offsetting a further anticipated contraction in Retail activity. Exports now represent 63% of Group revenues.
 
Total sales to our Hospitality customers increased by £2.0m (9%) and reached a new record of £24.8m (2017 H1: £22.8m). Hospitality sales now represent over 90% of Group revenue.
 
We have continued to make good progress in export markets. The positive momentum established in Europe over several years has delivered further strong growth with good penetration across major markets. We have also seen further progress in the Rest of the World area where we have invested additional senior management resource. Overall Hospitality export sales grew by 19% on both a reported and constant currency basis. Our success in export is driven by the continued introduction of innovative and differentiated added value products, which constitute a higher proportion of our sales outside the UK.
 
UK revenues continue to be relatively weak reflecting low levels of new investment by end users, although consumer spending on eating out remains at reasonable levels. Revenues in this market have reduced by 5%, a slightly improved rate than the reduction seen in the second half of 2017. We have also discontinued lower margin distribution arrangements in glassware. We continue to benefit from a high level of replacement sales from long established customer relationships.
 
The proportion of revenue represented by added value products has again increased following the successful launch of new products within our Stonecast and Studio Prints ranges, continuing the progress made in the last five years. Further carefully targeted new additions are planned in the second half year and again in 2019.
 
Retail continued to perform in line with our strategic targets. Revenues were £0.5m lower at £2.4m (2017 H1: £2.9m) with the majority of the reduction attributable to a weaker UK market. Export sales have continued to perform well.
 
Our strategy continues to be built around the core requirements of the growing hospitality market worldwide. Our products meet the high technical, shape and surface design requirements of professional end users and we provide a market leading level of service. There is further potential to increase the proportion of added value products within our overall revenues through continued innovation. Whilst we have made significant progress in growing our export sales, we still enjoy a relatively low market share outside of the UK, again giving us confidence that we can continue to improve our revenues. 
 
Operations
 
Our manufacturing and logistics operations have responded well to the challenge presented by the development of our business as a result of product range growth, innovation and the maintenance of high service levels across a wider geography.  Our manufacturing strategy is closely aligned to our sales and marketing plans.
 
As in 2017, capital expenditure has been relatively low in the first half year. A number of projects linked to our strategic objectives are expected to be completed in the second half year which will increase our ability to manufacture added value product, to provide additional kiln capacity and to improve the flexibility of our operations.
 
People
 
We have continued to target the improvement of skills and flexibility across our workforce and we have made significant progress in both enhancing current capabilities and in understanding the future manpower needs of our business. When we are focused on delivering sales and operational targets it is often easy to underestimate the contribution made by our employees as a whole to their achievement.  We value the skill and commitment shown by our workforce and I thank them for their continued support and effort. 
 
Prospects
 
The first half year's results show further strong progress against our strategic targets. We continue to invest in our business with the expectation that this will provide future revenue and profit growth.
 
The focus of our strategy remains continued innovation in added value products and further investment across the business to allow us to extend the breadth of the markets we serve and continue to grow our market share.  
 
We recognise that there is a considerable degree of uncertainty in the current business climate and we are reflecting this in our forward plans. We believe we have a sustainable, long term business model based on providing exceptional service to hospitality markets worldwide from a differentiated product range meeting high technical performance standards. These markets are characterised by high levels of replacement sales. We believe our core strategy remains robust and flexible enough to meet future challenges.
 
We remain confident in our performance against our targets both in relation to 2018 and in the longer term.
 
 
 
Alan McWalter
Chairman
30 August 2018
 
  
 
 
 




Churchill China plc


 


 


 


 


 


 


 




Consolidated Income Statement


 


 


 


 


 


 




for the six months ended 30 June 2018


 


 


 


 


 


 




 


 


 


 


Unaudited


 


Unaudited


 


Audited




 


 


 


 


Six months to


 


Six months to


 


Twelve months to




 


 


 


 


30 June 2018


 


30 June 2017


 


31 December 2017




 


 


 


 


£000


 


£000


 


£000




 


 


 


Note


 


 


 


 


 




Revenue


 


 


 


27,247


 


25,796


 


53,530




 


 


 


 


===========


 


===========


 


===========




 


 


 


 


 


 


 


 


 




Operating profit before exceptional item


 


 


1


3,254


 


2,668


 


7,460




Exceptional item - profit on disposal


 


 


 


-


 


-


 


315




Operating Profit


 


 


 


3,254


 


2,668


 


7,775




 


 


 


 


 


 


 


 


 




Share of results of associate company


 


92


 


82


 


159




Finance income


 


 


2


46


 


33


 


66




Finance costs


 


 


2


(90)


 


(123)


 


(225)




 


 


 


 


------------------


 


------------------


 


------------------




Profit before exceptional item and income tax


 


 


3,302


 


2,660


 


7,460




Exceptional item - profit on disposal


 


 


-


 


-


 


315




Profit before income tax


 


 


3,302


 


2,660


 


7,775




 


 


 


 


 


 


 


 


 




Income tax expense


 


3


(626)


 


(516)


 


(1,361)




 


 


 


 


------------------


 


------------------


 


------------------




Profit for the period


 


 


2,676


 


2,144


 


6,414




 


 


 


 


===========


 


===========


 


===========




 
 




 


 


 


 


 


Pence per


 


Pence per


 


Pence per




 


 


 


 


 


Share


 


share


 


share




 


 


 


 


 


 


 


 


 


 


 


 


 




Adjusted basic earnings per ordinary share


 


4


 


24.4


 


 


19.6


 


 


 


55.3




Adjusted diluted earnings per ordinary share


 


4


 


24.2


 


 


19.4


 


 


 


54.8




Basic earnings per ordinary share


 


4


 


24.4


 


 


19.6


 


 


 


58.4




Diluted earnings per ordinary share


4


 


24.2


 


 


19.4


 


 


 


57.9




 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 


 


 




  All the above figures relate to continuing operations


 


 


 


 


 


 


 


 


 



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 
 Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2018
 




 


 


 


 


 


 


 




 


 


 


 


Unaudited


 


Unaudited


 


Audited


 




 


 


 


 


Six months to


 


Six months to


 


Twelve months to


 




 


 


 


 


30 June 2018


 


30 June 2017


 


31 December 2017


 




 


 


 


 


£000


 


£000


 


£000


 




 


 


 


 


 


 


 


 


 


 




Other comprehensive income / (expense)


 


 


 


 


 


 


 




Items that will not be reclassified to profit and loss:


 


 


 


 


 


 




Actuarial gain on retirement benefit obligations


 


-


 


-


 


1,344


 




Items that may be reclassified subsequently to profit


 


 


 


 


 


 




and loss


 


 


 


 


 


 


 


 


 




Exchange differences


 


 


(11)


 


(19)


 


(33)


 




 


 


 


 


 ---------------


 


-------------- 


 


--------------- 


 




Other comprehensive income / (expense)


 


(11)


 


(19)


 


1,311


 




 


 


 


 


 


 


 


 




Profit for the period


 


 


 


2,676


 


2,144


 


6,414


 




 


 


 


 


 


 


 


 


 


 




 


 


 


 


---------------


 


---------------


 


----------------


 




Total comprehensive income for the period


 


2,665


 


2,125


 


7,725


 




 


 


 


 


==========


 


========== 


 


==========


 




Attributable to:


 


 


 


 


 


 


 


 


 




Equity holders of the Company


 


 


2,665


 


2,125


 


7,725


 




 


 


 


==========


 


==========


 


==========


 



 
 
 
 
 
 
 
 
 
 
 
 



 
All above figures relate to continuing operations
 
  




Churchill China plc


 


 


 


 


 


 


 


 




Consolidated Balance Sheets


 


 


 


 


 


 


 




as at 30 June 2018


 


 


 


 


 


 


 


 




 


 


 


 


Unaudited


 


Unaudited


 


Audited




 


 


 


 


30 June


 


30 June


 


31 December




 


 


 


 


2018


 


2017


 


2017




 


 


 


 


£000


 


£000


 


£000




Assets


 


 


 


 


 


 


 


 




Non Current assets


 


 


 


 


 


 


 




Property, plant and equipment


 


 


14,520


 


15,050


 


14,542




Intangible assets


 


 


 


93


 


59


 


101




Investment in associate


 


 


1,639


 


1,470


 


1,547




Deferred income tax assets


 


 


1,066


 


1,570


 


1,197




 


 


 


 


17,318


 


18,149


 


17,387




Current assets


 


 


 


 


 


 


 


 




Inventories


 


 


 


9,706


 


9,655


 


9,816




Trade and other receivables


 


 


9,220


 


9,589


 


8,650




Other financial assets


 


 


4,506


 


5,129


 


3,000




Cash and cash equivalents


 


 


9,230


 


5,226


 


12,577




 


 


 


 


32,662


 


29,599


 


34,043




 


 


 


 


 


 


 


 


 




Total assets


 


 


 


49,980


 


47,748


 


51,430




 


 


 


 


==========


 


==========


 


=============




Liabilities


 


 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 


 


 




Trade and other payables


 


 


(8,617)


 


(9,075)


 


(10,024)




Current income tax liabilities


 


 


(716)


 


(658)


 


(831)




 


 


 


 


-----------------


 


----------------


 


---------------------




Total current liabilities


 


 


(9,333)


 


(9,733)


 


(10,855)




 


 


 


 


-----------------


 


----------------


 


---------------------




Non current liabilities


 


 


 


 


 


 


 




Deferred income tax liabilities


 


 


(765)


 


(810)


 


(775)




Retirement benefit obligations


 


 


(5,282)


 


(8,139)


 


(5,907)




 


 


 


 


-----------------


 


----------------


 


---------------------




Total non current liabilities


 


 


 
(6,047)


 


(8,949)


 


(6,682)




 


 


 


 


-----------------


 


----------------


 


---------------------




Total liabilities


 


 


 


(15,380)


 


(18,682)


 


(17,537)




 


 


 


 


==========


 


==========


 


=============




Net assets


 


 


 


34,600


 


29,066


 


33,893




 


 


 


 


==========


 


==========


 


=============




 


 


 


 


 


 


 


 


 




Shareholders' equity


 


 


 


 


 


 


 




Issued share capital


 


 


1,103


 


1,103


 


1,103




Share premium account


 


 


2,348


 


2,348


 


2,348




Treasury shares


 


 


 


(530)


 


(484)


 


(579)




Other reserves


 


 


 


1,534


 


1,476


 


1,565




Retained earnings


 


 


 


30,145


 


24,623


 


29,456




 


 


 


 


34,600


 


29,066


 


33,893




 


 


 


 


===========


 


==========


 


=============




 




 


 


 


 


 


 


 


 


 


 




Churchill China plc


 


 


 


 


 


 


 




Consolidated Statement of Changes in Equity


 


 


 


 


 




as at 30 June 2018


 


 


 


 


 


 


 




 


 


 


Retained


Share


Share


Treasury


Other


 




 


 


 


earnings


capital


premium


shares


reserves


Total




 


 


 


£000


£000


£000


£000


£000


£000




Balance at 1 January 2017


 


24,205


1,103


2,348


(575)


1,544


28,625




Comprehensive income


 


 


 


 


 


 


 




Profit for the period


 


 


2,144


-


-


-


-


2,144




Other comprehensive income


 


 


 


 


 


 


 




Depreciation transfer - gross


 


5


-


-


-


(5)


-




Depreciation transfer - tax


 


(1)


-


-


-


1


-




Currency translation


 


-


-


-


-


(19)


(19)




Total comprehensive income


 


2,148


-


-


-


(23)


2,125




 


 


 


 


 


 


 


 


 




Transactions with owners


 


 


 


 


 


 


 




Dividends


 


 


(1,621)


-


-


-


-


(1,621)




Share based payment


 


123


-


-


-


(45)


78




Deferred Tax - Share based payment


 


32


-


-


-


-


32




Treasury shares


 


 


(264)


-


-


91


-


(173)




Total transactions with owners


 


(1,730)


-


-


91


(45)


(1,684)




 


 


 


 


 


 


 


 


 




Balance at 30 June 2017


 


24,623


1,103


2,348


(484)


1,476


29,066




Comprehensive income


 


 


 


 


 


 


 




Profit for the period


 


 


4,270


-


-


-


-


4,270




Other comprehensive income


 


 


 


 


 


 


 




Depreciation transfer - gross


 


7


-


-


-


(7)


-




Depreciation transfer - tax


 


 (1)


-


-


-


1


-




Remeasurements of post employment
benefit obligations - net of tax


           
         1,344


 


 


 


 


 
1,344




Currency translation


 


-


-


-


-


(14)


(14)




Total comprehensive income


 


5,620


-


-


-


20


5,600




 


 


 


 


 


 


 


 


 




Transactions with owners


 


 


 


 


 


 


 




Dividends


 


 


(812)


-


-


-


-


(812)




Proceeds of share issue


 


 


-


-


-


3


-


3




Share based payment


 


-


-


-


-


109


109




Deferred tax - Share based payment


25


-


-


-


-


25




Treasury shares


-


-


-


(98)


-


(98)




 


 


 


 


 


 


 


 


 




Total transactions with owners


 


(787)


-


-


(98)


109


(773)




 


 


 


 


 


 


 


 


 




Balance at 31 December 2017


 


29,456


1,103


2,348


(579)


1,565


33,893




Comprehensive income


 


 


 


 


 


 


 




Profit for the period


 


 


2,676


-


-


-


-


2,676




Other comprehensive income


 


 


 


 


 


 


 




Depreciation transfer - gross


 


5


-


-


-


(5)


-




Depreciation transfer - tax


 


(1)


-


-


-


1


-




Currency translation


 


-


-


-


-


(11)


(11)




Total comprehensive income


 


2,680


-


-


-


(15)


2,665




 


 


 


 


 


 


 


 


 




Transactions with owners


 


 


 


 


 


 


 




Dividends


 


 


(1,886)


-


-


-


-


(1,886)




Proceeds of share issue


 


 


-


-


-


3


-


3




Share based payment


 


137


-


-


-


(16)


121




Deferred tax - Share based payment


(8)


-


-


-


-


(8)




Treasury shares


 


 


(234)


-


-


46


-


(188)




 


 


 


 


 


 


 


 


 




Total transactions with owners


 


(1,991)


-


-


49


(16)


(1,958)




 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 




Balance at 30 June 2018


 


30,145


1,103


2,348


(530)


1,534


34,600



 
 
 
 
 
 
 
 
 
 
 
 



 




Churchill China plc


 


 


 


 


 


 




Consolidated Cash Flow Statement


 


 


 


 


 


 




for the six months ended 30 June 2018


 


 


 


 


 


 




 


 


 


 


Unaudited


 


Unaudited


 


Audited




 


 


 


 


Six months to


 


Six months to


 


Twelve months to




 


 


 


 


30 June 2018


 


30 June 2017


 


31 December 2017




 


 


 


 


£000


 


£000


 


£000




 


 


 


 


 


 


 


 


 




Cash flows from operating activities


 


 


 


 


 


 


 




Cash generated from operations (note 5)


 


1,686


 


1,089


 


7,743


 




Interest received


 


 


 


46


 


33


 


66




Interest paid


 


 


 


-


 


-


 


-




Income tax paid


 


 


 


(628)


 


(614)


 


(1,198)




 


 


 


 


-----------------


 


-----------------


 


------------------




Net cash generated from operating activities


1,104


 


508


 


6,611


 




 


 


 


 


-----------------


 


-----------------


 


-----------------




Investing activities


 


 


 


 


 


 


 


 




Purchases of property, plant and equipment


 


(867)


 


(1,105)


 


(2,155)


 




Proceeds on disposal of property, plant and equipment


47


 


25


 


1,139


 




Purchases of intangible assets


 


 


(53)


 


(17)


 


(54)


 




 


 


 


 


-----------------


 


-----------------


 


-----------------




Net cash used in investing activities


 


(873)


 


(1,097)


 


(1,070)


 




 


 


 


 


-----------------


 


-----------------


 


-----------------




Financing activities


 


 


 


 


 


 


 


 




Issue of ordinary shares


 


 


3


 


3


 


3


 




Purchase of treasury shares


 


 


(188)


 


(176)


 


(271)


 




Dividends paid


 


 


 


(1,886)


 


(1,621)


 


(2,433)




Net (purchase) / sale of other financial assets


 


(1,506)


 


(2,124)


 


5


 




 


 


 


 


-----------------


 


-----------------


 


-----------------




Net cash used in financing activities


 


(3,577)


 


(3,918)


 


(2,696)


 




 


 


 


 


-----------------


 


-----------------


 


-----------------




Net (decrease) /  increase in cash and cash equivalents


 


(3,346)


 


(4,507)


 


2,845


 




 


 


 


 


 


 


 


 


 




Cash and cash equivalents at the beginning of the year


12,577


 


9,734


 


9,734


 




 


 


 


 


 


 


 


 


 




Exchange loss on cash and cash equivalents


(1)


 


(1)


 


(2)


 




 


 


 


 


 


 


 


 


 




 


 


 


 


-----------------


 


-----------------


 


-----------------




Cash and cash equivalents at the end of the year


9,230


 


5,226


 


12,577


 




 


-----------------


 


-----------------


 


-----------------


 



 
 
 
 
 
 
 
 
 
 
 



 
 




 1. Segmental analysis


 


 


 


 




for the six months ended 30 June 2018


 


 


 




The figures given below analyse Group revenue between markets and geographic regions.




 




 


 


 


 


Unaudited


 


Unaudited


 


Audited




 


 


 


 


Six months to


 


Six months to


 


Twelve months to




 


 


 


 


30 June 2018


 


30 June 2017


 


31 December 2017




 


 


 


 


£000


 


£000


 


£000




Revenue


 


 


 


 


 


 


 


 




Hospitality


 


 


 


24,852


 


22,838


 


47,395




Retail


 


 


 


2,395


 


2,958


 


6,135




 


 


 


 


 --------------------------


 


 -------------------------


 


 -----------------------------------




 


 


 


 


27,247


 


25,796


 


53,530




Revenue


 


 


 


---------------------------


 


--------------------------


 


------------------------------------




United Kingdom


 


 


 


10,173


 


11,067


 


24,016




Rest of Europe


 


 


 


10,958


 


8,989


 


17,688




North America


 


 


 


3,071


 


2,897


 


6,470




Rest of the World


 


 


 


3,045


 


2,843


 


5,356




 


 


 


 


 --------------------------


 


 --------------------------


 


 -----------------------------------




 


 


 


 


27,247


 


25,796


 


53,530




 


 


 


 


---------------------------


 


--------------------------


 


------------------------------------




 
2. Finance income and costs




 


 


 


 


Unaudited


 


Unaudited


 


Audited




 


 


 


 


Six months to


 


Six months to


 


Twelve months to




 


 


 


 


30 June 2018


 


30 June 2017


 


31 December 2017




 


 


 


 


£000


 


£000


 


£000




Finance income


 


 


 


 


 


 


 


 




Other interest receivable


 


 


46


 


33


 


66




 


 


 


 


 


 


 


 


 




Finance income


 


 


 


46


 


33


 


66




 


 


 


 


 


 


 


 


 




Finance cost


 


 


 


 


 


 


 


 




Interest on pension scheme


 


 


(90)


 


(123)


 


(225)




 


 


 


 


 


 


 


 


 




Finance costs


 


 


 


(90)


 


(123)


 


(225)




 
The interest cost arising from pension schemes is a non cash item.
3. Income tax expense




 


 


Unaudited


 


Unaudited


 


Audited




 


 


Six months to


 


Six months to


 


Twelve months to




 


 


30 June 2018


 


30 June 2017


 


31 December 2017




 


 


£000


 


£000


 


£000




 


 


 


 


 


 


 




Current taxation


 


513


 


420


 


1,177




Deferred taxation


 


113


 


96


 


184




Income tax expense


626


 


516


 


1,361




 
4. Earnings per ordinary share                                                                                                                                                                                                                                                                 
Basic earnings per ordinary share is based on the profit after taxation of £2,676,000 (June 2017: £2,144,000; December 2017: £6,414,000) and on 10,964,570 (June 2017: 10,958,489; December 2017: 10,964,462) ordinary shares, being the weighted average number of ordinary shares in issue during the period. Adjusted earnings per ordinary share is calculated after adjusting for the post tax effect of the exceptional profit on disposal in 2017.
Diluted basic earnings per ordinary share is based on the profit after taxation of £2,676,000 (June 2017: £2,144,000; December 2017: £6,414,000) and on 11,066,621 (June 2017: 11,056,040; December 2017: 11,062,013) ordinary shares, being the weighted average number of ordinary shares in issue during the period of 10,964,570 (June 2017: 10,958,489; December 2017: 10,964,462) increased by 102,051 (June 2017: 97,551; December 2017: 97,551) shares, being the weighted average number of ordinary shares which would have been issued if the outstanding options to acquire shares in the Group had been exercised at the average price during the period. Adjusted diluted earnings per ordinary share is calculated after adjusting for the post tax effect of the exceptional profit on disposal in 2017.
 
5. Reconciliation of operating profit to net cash inflow from continuing activities




 


 


 


 


Unaudited


 


Unaudited


 


Audited




 


 


 


 


Six months to


 


Six months to


 


Twelve months to




 


 


 


 


30 June 2018


 


30 June 2017


 


31 December 2017




 


 


 


 


£000


 


£000


 


£000




Cash flow from operations


 


 


 


 


 


 




Operating profit


 


 


 


3,254


 


2,668


 


7,775




Adjustments for


 


 


 


 


 


 


 


 




Depreciation


 


 


 


913


 


945


 


1,621




(Profit) / loss on disposal of property, plant and equipment


(4)


 


3


 


(317)




Charge for share based payment


 


 


121


 


78


 


187




Decrease in retirement benefit obligations


 


(715)


 


(715)


 


(1,430)




Changes  in working capital


 


 


 


 


 


 


 




Inventory


 


 


 


110


 


(553)


 


(714)




Trade and other receivables


 


 


(585)


 


(127)


 


785




Trade and other payables


 


 


(1,408)


 


(1,210)


 


(164)




 


 


 


 


 


 


 


 


 




Cash inflow from operations


 


 


1,686


 


1,089


 


7,743




 
6. Basis of preparation and accounting policies                                                                                                                
The interim financial information for the period to 30 June 2018 has not been audited or reviewed and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The Company's statutory accounts for the year ended 31 December 2017, prepared in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards - IFRS), have been delivered to the Registrar of Companies; the report of the auditors on these accounts was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
The interim financial statements have been prepared in accordance with IFRS as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS, under the historical cost convention as modified by the revaluation of land and buildings, available for sale financial assets, and financial assets and liabilities (including derivative instruments) at fair value through the profit and loss account. The same accounting policies, presentation and methods of computation are followed in the interim financial statements as were applied in the Group's last audited financial statements, except in relation to the adoption of IFRS 15 'Revenue from Customers' and IFRS 9 'Financial Instruments', effective from 1 January 2018. The adoption of these standards has not led to any changes in the interim financial statements.         
7. Share buybacks                                                                                                                              
The Company bought back 20,000 shares during the first six months of the year and may consider making further ad hoc share buybacks going forward at the discretion of the Board and subject to the shareholder authorities approved at the 2018 Annual General Meeting.                                                                                                               
     
The half-yearly report and this announcement will be available shortly on the Company's website: www.churchill1795.com                                                    
 




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END
 
 
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