REG - Churchill China PLC - Final Results 2022
13/04/2023 07:00
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RNS Number : 0371W Churchill China PLC 13 April 2023
For immediate release 13 April 2023
CHURCHILL CHINA plc
("Churchill" or the "Company" or the "Group")
FINAL RESULTS
For the year ended 31 December 2022
Strong revenue and profit performance
Churchill China plc (AIM: CHH), the manufacturer of innovative performance
ceramic products serving hospitality markets worldwide, is pleased to announce
its Final Results for the year ended 31 December 2022.
Key Highlights:
Financial
· Operating profit before exceptional items up 49% to £9.2m (2021:
£6.1m)
· Profit before exceptional items and tax up 52% to £9.1m (2021:
£6.0m)
· Reported profit after exceptional items before tax up 61% to £9.6m
(2021: £6.0m)
· Adjusted* basic earnings per share up 77% to 66.9p (2021: 37.8p)
· Basic earnings per share 71.7p (2021: 37.8p)
· Final dividend of 21.0p per share, up 21% (2021: 17.3p). Total
dividend for the year 31.5p, up 76% (2021: 24.0p)
· Cash generated from operations £4.9m (2021: £10.6m) - substantial
investment into inventory to optimise service levels and efficiency
· Net cash and deposits of £14.7m (2021: £19.0m)
Business
· Total revenues of £82.5m up 36% (2021: £60.8m)
· Strong revenue performance
o Hospitality: +40%
o Materials: +37%
· Successful execution of strategy with further revenue growth across
key markets
· Good demand from distributors and end users
· Percentage margins affected by labour efficiency as anticipated,
absolute margins on target
· Manufacturing efficiency improving
· Continued investment targeting added value product capacity, process
automation and energy efficiency
· Significant development of Board succession plan
Outlook
· 2023 has started well, Q1 targets met
· Investment programme maintained
· We look forward to delivering an improved performance in 2023.
Alan McWalter, Chairman of Churchill China, commented:
"Churchill is a resilient, adaptable business that benefits from a clear focus
on delivering outstanding performance products, value and service to its
customers and prospers as a result. We have a clear strategy and a long term
approach to business which underpins our confidence in our future prospects."
Analyst meeting
An in-person meeting for analysts will be held at 10.00am today, 13 April 2023
at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. An online option
will also be provided for analysts who cannot attend in person. To register
for the meeting, analysts should contact Buchanan by email at
churchillchina@buchanan.uk.com (mailto:churchillchina@buchanan.uk.com) or
telephone 020 7466 5000.
For further information, please contact:
Churchill China plc Tel: 01782 577566
David O'Connor / James Roper
Buchanan Tel: 020 7466 5000
Mark Court / Abigail Gilchrist
ChurchillChina@buchanan.uk.com
Investec Tel: 020 7597 (Tel:020%207597) 5970
David Flin / Alex Wright / William Brinkley
*Adjusted basic earnings per share is calculated after adjusting for the post
tax effect of exceptional items.
CHAIRMAN'S STATEMENT
Introduction
We are pleased to report a strong performance in the year and have more than
achieved our initial targets despite considerable external impact on both our
markets and input costs. This performance, with a 36% increase in revenue and
an increase in profit before exceptional items and tax of over 50%, reflects
the strength of our market position and product offering, our geographic reach
and diversity and the resilience of our business model. Alongside these
achievements we have continued to develop and implement our longer term
strategy, building our presence in Hospitality export markets and investing in
the future of our business.
We continue to make good progress in growing our revenue and, as previously
reported, are addressing some of the production issues that have adversely
impacted margins as we increased manufacturing output during the year. Demand
levels remain satisfactory overall and we have substantially improved our
customer service performance as inventory has increased, reducing the
outstanding order book towards more normal levels.
Financial Review
Total revenues rose by 36% to £82.5m (2021: £60.8m). Revenues increased both
as a result of market share gain, resulting in increased volumes, and higher
price levels implemented to help mitigate the effect of input cost inflation
during the period.
Revenue (£m) 2022 2021 Change
Ceramics 75.3 55.6 35.5%
Materials 7.2 5.2 37.4%
Total 82.5 60.8 35.6%
UK 33.2 24.4 36.1%
Export 49.3 36.4 35.3%
Total 82.5 60.8 35.6%
As expected, overall gross margins remained lower than their long term average
with output and efficiency levels during the year affected by labour
availability issues, lower than optimal levels of experience within our
workforce and higher input prices for materials and energy. Margin levels
showed their normal increase in the second half of the year and we have seen
some improvement in efficiency in the first months of 2023 as we have both
reduced the amount of short term contract labour and improved overall
manufacturing yields. We expect to make further progress in the resolution of
these issues over the medium term.
Operating profit before exceptional items rose by £3.1m to £9.2m (2021:
£6.1m). Overhead cost levels increased principally as a result of further
long term investment in sales and marketing, supporting forward business
development. Operating profit margins before exceptional items rose by 1.0% to
11.1% (2021: 10.1%).
Profit before exceptional items and income tax was £9.1m (2021: £6.0m) with
the increase reflecting improved operating profit.
Net exceptional income: We have received two amounts of exceptional income
during the year, firstly in relation to a receipt in relation to the voluntary
winding up of a ceramic industry trade body of which the Company was a member*
and a further amount as a reduction to our rates charge covering the initial
impact of COVID in 2020. The latter sum was used to fund a one off payment
made to all our employees as cost of living support. These amounts have been
treated as exceptional given their size and nature.
Adjusted basic earnings per share before exceptional income was 66.9p (2021:
37.8p).
Reported profit after exceptional items but before income tax was £9.6m
(2021: £6.0m).
Basic earnings per share, after exceptional items, was 71.7p (2021: 37.8p).
Cash flows from operating activities of £4.9m (2021: £10.6m) were lower than
normally delivered, reflecting a substantial increase in overall inventory
levels of £5.4m to £15.9m. Stock levels within the Ceramic business had been
well below desirable levels for most of 2022, adversely affecting customer
service. These have been partially rebuilt during the final quarter of the
year giving increased security to customers through improved delivery and
better production efficiencies. Inventory levels within our Materials business
also increased substantially as we established higher safety stocks of raw
materials. Levels of receivables also increased as revenue grew, although the
cash effect of this rise was offset by higher levels of creditors. Capital
expenditure increased to £4.7m (2021: £3.7m) further details of which are
set out below. After total dividend payments of £3.1m (2021: £0.7m), cash
and deposits at 31 December 2022 were £14.7m (2021: £19.0m).
The funding position of our defined benefit pension scheme has improved
substantially over the year as a result of an increase in discount rates
applied to scheme liabilities following higher general interest rates. The
scheme's investment strategy has been adjusted to reflect revised market
conditions. The overall surplus at the year end was £6.9m (2021: deficit
£7.2m). The Company is reviewing its forward position in relation to future
scheme funding.
Dividend
We are pleased to propose a final dividend of 21.0p per share, giving a total
dividend of 31.5p per share for the year, a 31% increase on the 24.0p paid in
relation to 2021. This dividend will be payable on 23 June 2023 to
shareholders on the register on 19 May 2023. The dividend is in line with our
policy of growing returns to shareholders and reflects our ongoing confidence
in the progress of the business.
Business
The business has performed well against its objectives for 2022. This has been
possible through a continued focus on our core business principles of
providing excellent value, outstanding products and a high level of service to
our customers.
Ceramics
Hospitality sales in the year to 31 December 2022 increased by 40% against
2021. This increase reflected higher price levels, but importantly also higher
sales volumes which rose by 23% against the prior year.
Export development continues to be our main long term focus for revenue growth
and we have made good progress in all of our overseas regions. The best
performance was again from Europe, where revenues rose by £7.7m to £31.5m.
Progress continued to be made in the USA (+49%) and Rest of the World markets
(+64%). UK sales, which had recovered more slowly from COVID, grew more
strongly as larger hospitality customers recovered. Sales in the UK were more
than 40% ahead of 2021.
The early part of the year saw significant energy and material price rises
alongside the existing issue of reduced labour availability. More recently we
have seen some impact from uncertainty arising from the impact of higher costs
of living in certain markets. We were able to partially mitigate the impact of
higher costs with fair and balanced price rises reflecting the continued value
of our product and service offering to our customer base. Whilst we increased
prices twice last year we believe that more stability in input pricing will
allow a more measured approach in 2023. The business is currently benefitting
from the geographic diversity of our market spread with continued strong
growth in export markets offsetting the effect of consumer uncertainty in the
UK. We believe that we have now begun to resolve a number of the efficiency
issues that have constrained our performance in recent periods.
Added Value sales increased by over £10m during the year and were 34% ahead
of 2021, despite a lower level of new product introductions. Good progress was
made in all our major market sectors and Europe continues to be the market
reporting the highest level of added value product sales, supporting our
continued focus on that region. We expect to increase the level of new product
launches in 2023.
In line with our strategy to prioritise the manufacture of Hospitality
products, Retail sales were lower, down 33%,. Retail sales now represent less
than 5% of our Ceramics revenues.
Materials
Furlong Mills has performed extremely well during the year despite a number of
challenges. Material and energy cost rises were particularly evident in this
business, but again these have been largely reflected in higher price levels.
The business' performance improved following a substantial increase in demand
from Churchill and a general increase in business from the UK ceramic
tableware industry. Overall revenues rose by 54%, with the increase from
external customers being almost £2m (37%). The operational team worked
exceptionally hard to meet increased output requirements and to continue to
offer a leading service to their customers. As previously noted, we have taken
the decision to substantially increase holdings of raw materials to improve
supply chain security to both Churchill and our external customer base and
inventory levels are £2.1m higher than the end of 2021. While this has
required substantial investment by the business, we believe it is the right
decision to support both Churchill and Furlong's external customers.
Furlong Mills is also contributing significantly to the Group's long term plan
to reduce energy usage. We believe that substantial gains are available from
improved materials and processes and the capability and knowledge within the
Furlong business will support the realisation of these benefits.
Operations
As previously noted, 2022 has been a testing year for our manufacturing
operations and we are pleased that they have responded well to the challenges
presented to them. The success of our plan to secure additional sales volumes
was initially supported by higher inventory levels but as this was depleted
the requirement to expand production levels increased. Output levels rose by
over 30% in the year, a substantial achievement, central to our objective of
providing the best possible service to our customers. Labour availability and
experience remained an issue through the year leading to a number of
inefficiencies and higher than desirable unit costs.
Production levels have now stabilised and we have begun to see some of the
benefits of a number of projects and actions aimed at improving productivity
and efficiency. The numbers of temporary staff within the business is reducing
steadily and the skills and capability of our core workforce is improving
progressively as experience levels increase and our training programme
delivers returns. As inventory levels have grown we have been able to plan
longer production runs while also improving customer service. Finally a number
of the capital projects targeting improved productivity that were initiated
last year are now beginning to become operational. The effect of these will
not be significant in the short term, but will provide a longer term route to
increased efficiency.
Capital expenditure rose to £4.7m (2021: £3.7m) overall as we continued to
invest in equipment to support the development of Added Value revenues and in
projects improving our productivity and energy efficiency.
Our energy hedging position continues to reduce volatility within energy
pricing. Whilst we will see some benefit from currently lower prices earlier
in 2023, the principal benefit from this will be secured in the second half of
the year. We also have a smaller hedged position into the first months of
2024. We are mindful of the extended impact of volatile energy pricing and
will continue to monitor market movements carefully.
Environmental, Social and Governance ('ESG')
Our approach to ESG has moved forward substantially over the year. The senior
management focus outlined in last year's report has allowed the development of
our broad strategy and the identification of short, medium and long term
actions supporting our forward progress. As a major energy user and large
employer much of our work has focused on the Environment and Social pillars,
but we have made progress in all areas of our focus.
In relation to our energy footprint we have initiated a number of projects
which have given us a much clearer idea of how we may move towards Net Zero
over the longer term. These initiatives should deliver benefits that will
deliver steady progress towards our sustainability objectives. Our approach is
based on a combination of improved energy efficiency in the manufacture of our
product and increased sustainable generation. Importantly we believe that
significant improvements can be made through the reformulation of the
materials we use and changes in our production processes to allow manufacture
using substantially less energy input. We are working on a number of research
and development projects in this area utilising our own technical staff,
external experts and suppliers.
We have also implemented a number of initiatives in relation to our workforce
and our engagement with our local community. We have always prioritised
training and development of our workforce and we have continued to invest in
this area. Future plans emphasise the improvement of our employees working
environment.
We believe that our Governance procedures remain appropriate for a business of
our scale and structure but, in common with other areas of our business, they
must follow a process of continuous improvement. A substantial amount of work
has been carried out in relation to the development and implementation of a
succession plan for the Board and senior management, a summary of this is set
out below.
People
Before addressing changes to our Board, I would first like to thank our
workforce as a whole for their contribution to this year's performance and the
long term health and vitality of our business. As has been referred to above,
we have successfully addressed a number of difficult challenges during 2022
and continue to deal with changing economic, trading and operational
conditions. We have faced these issues not just with a well positioned and
well invested business, but most importantly with a talented and committed
workforce who deliver a consistent and high level of performance. The Board
once again offers its thanks to all our employees and we are extremely proud
of their achievements.
In relation to the composition of our Board, we have made significant progress
over the course of the year in planning its future development. The longer
term evolution of our Board had been given less priority in recent years as
the business faced a number of challenges from external events and it was felt
that the maintenance of an experienced senior team was in the best interests
of shareholders. However, we have implemented a number of changes in both
executive and non executive roles aimed at refreshing our Board and increasing
the level of independent oversight. As we have previously announced David
Taylor, who has been our Chief Financial Officer for over 31 years, will leave
the Board this month. As we announced on 20 December 2022 he will be succeeded
by Michael Cunningham, who will join from Surface Transforms plc on 1 June
this year. We have appointed two new independent non executive Directors,
Robin Williams in October 2022 and Caroline Stephens in February this year,
who together with Mark Moore, bring our complement of independent Directors to
three. I also wish to announce that I, Alan McWalter, will retire as Chairman
and a director with effect from the conclusion of the 2023 Annual General
Meeting. Robin Williams will assume the role of Chair from that date. The
Board will remain focused on the implementation of these transitional changes.
Outlook
We delivered a strong performance in 2022, growing both revenue and
profitability despite a number of challenges. This performance reflects not
just the attractiveness of our markets but the strength of our established
position and the long term approach that we will continue to follow. Churchill
is a resilient, adaptable business that benefits from a clear focus on
delivering outstanding performance products, value and service to its
customers and prospers as a result. We have a clear strategy and a long term
approach to business which underpins our confidence in our future prospects.
We believe that, despite some uncertainty in selected markets, that we are
well positioned to continue to grow our revenues in line with our established
strategy. We have invested in our European operations and continue to see good
opportunities for progress in that region alongside other export markets. The
output and efficiency issues affecting our manufacturing operations in 2022
are being addressed and we expect to demonstrate an improved performance in
this area as we move through the year. 2023 has started well with a
satisfactory level of activity across our markets and we have met our targets
in the first three months of the year. We expect to continue to maintain our
investment programme in support of our longer term aspirations.
We look forward to delivering an improved performance in 2023.
Alan McWalter
Chairman
13 April 2023
Churchill China plc
Consolidated Income Statement
for the year ended 31 December 2022
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Note
Revenue 1 82,528 60,839
Operating profit before exceptional items 9,142 6,122
Exceptional items 2 547 -
Operating profit 9,689 6,122
Finance income 3 60 5
Finance costs 3 (148) (164)
Profit before exceptional item and income tax 9,054 5,963
Exceptional item 2 547 -
Profit before income tax 9,601 5,963
Income tax expense 4 (1,706) (1,797)
Profit for the year 7,895 4,166
Profit for the year is attributable to: 7,895 4,166
Owners of the Company
Pence per Pence per
Share Share
Basic earnings per ordinary share 5 71.7p 37.8p
Adjusted basic earnings per ordinary share 5 66.9p 37.8p
Churchill China plc
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Other comprehensive income
Items that will not be reclassified to profit or loss:
Re-measurements of post-employment benefit obligations net of tax 9,332 1,499
Items that may be reclassified subsequently to profit or loss:
Impact of change in UK tax rate on deferred tax - 557
Currency translation differences 58 10
Other comprehensive income for the year 9,390 2,066
Profit for the year 7,895 4,166
Total comprehensive income for the year 17,285 6,232
Attributable to:
Owners of the Company 17,285 6,232
All the above figures relate to continuing operations
Churchill China plc
Consolidated Balance Sheet
as at 31 December 2022
Audited Audited
31 December 31 December
2022 2021
£000 £000
Assets
Non Current assets
Property, plant and equipment 23,039 21,021
Intangible assets 849 1,022
Deferred income tax assets 132 1,842
Retirement benefit asset 6,924 -
30,944 23,885
Current assets
Inventories 15,889 10,486
Trade and other receivables 14,380 10,877
Other financial assets 5,057 4,005
Cash and cash equivalents 9,604 15,046
44,930 40,414
Total assets 75,874 64,299
Liabilities
Current liabilities
Trade and other payables (14,291) (12,268)
Total current liabilities (14,291) (12,268)
Non-current liabilities
Lease liabilities (477) (217)
Deferred income tax liabilities (4,458) (1,975)
Retirement benefit obligations - (7,156)
Total non-current liabilities (4,935) (9,348)
Total liabilities (19,226) (21,616)
Net assets 56,648 42,683
Equity attributable to owners of the Company
Issued share capital 1,103 1,103
Share premium account 2,348 2,348
Treasury shares (431) (80)
Other reserves 1,344 1,195
Retained earnings 52,284 38,117
56,648 42,683
Churchill China plc
Consolidated Statement of Changes in Equity
as at 31 December 2022
Issued
Retained share Share Treasury Other Total
earnings capital premium shares Reserves equity
£000 £000 £000 £000 £000 £000
Balance at 1 January 2021 32,555 1,103 2,348 (80) 1,215 37,141
Comprehensive income
Profit for the period 4,166 - - - - 4,166
Other comprehensive income
Depreciation transfer - gross 12 - - - (12) -
Depreciation transfer - tax (3) - - - 3 -
Deferred tax - change in rate 623 - - - (66) 557
Remeasurement of post-employment benefit obligations - net of tax 1,499 - - - - 1,499
Currency translation - - - - 10 10
Total comprehensive income 6,297 - - - (65) 6,232
Transactions with owners
Dividends relating to 2021 (739) - - - - (739)
Share based payment - - - - 45 45
Deferred tax - share based payment 4 - - - - 4
Total transactions with owners (735) - - - 45 (690)
Balance at 31 December 2021 38,117 1,103 2,348 (80) 1,195 42,683
Churchill China plc
Consolidated Statement of Changes in Equity
as at 31 December 2022
Issued
Retained share Share Treasury Other Total
earnings capital premium shares Reserves equity
£000 £000 £000 £000 £000 £000
Balance at 1 January 2022 38,117 1,103 2,348 (80) 1,195 42,683
Comprehensive income
Profit for the period 7,895 - - - - 7,895
Other comprehensive income
Depreciation transfer - gross 12 - - - (12) -
Depreciation transfer - tax (3) - - - 3 -
Remeasurement of post-employment benefit obligations - net of tax 9,332 - - - - 9,332
Currency translation - - - - 58 58
Total comprehensive income 17,236 - - - 49 17,285
Transactions with owners
Dividends relating to 2022 (3,062) - - - - (3,062)
Treasury shares - - - (351) - (351)
Share based payment - - - - 100 100
Deferred tax - share based payment (7) - - - - (7)
Total transactions with owners (3,069) - - (351) 100 (3,320)
Balance at 31 December 2022 52,284 1,103 2,348 (431) 1,344 56,648
Churchill China plc
Consolidated Cash Flow Statement
for the year ended 31 December 2022
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Cash flows from operating activities
Cash generated from operations (note 6) 4,939 10,627
Interest received 60 5
Interest paid (35) (28)
Income tax paid (991) (854)
Net cash generated from operating activities 3,973 9,750
Cash flows from investing activities
Purchases of property, plant and equipment (4,618) (3,740)
Proceeds on disposal of property, plant and equipment 15 43
Purchases of intangible assets (86) (12)
Net purchase of other financial assets* (1,052) (747)
Net cash used in investing activities (5,741) (4,456)
Cash flows from financing activities
Dividends paid (3,062) (739)
Principal elements of leases (263) (247)
Purchase of treasury shares (351) -
Net cash used in financing activities* (3,676) (986)
Net (decrease) / increase in cash and cash equivalents (5,444) 4,308
Cash and cash equivalents at the beginning of the year 15,046 10,738
Exchange gain on cash and cash equivalents 2 -
Cash and cash equivalents at the end of the year 9,604 15,046
*During the year the net purchase of other financial assets has been
reclassified to be presented as a cash flow from investing rather than
financing activity.
1. Segmental analysis
for the year ended 31 December 2022
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Revenue - segment
Ceramics 75,335 55,605
Materials 13,500 8,773
88,835 64,378
Less: Inter segment revenue (6,307) (3,539)
82,528 60,839
Revenue - geographic
United Kingdom 33,244 24,424
Rest of Europe 31,888 24,241
USA 8,715 6,388
Rest of the World 8,681 5,786
82,528 60,839
Operating profit before exceptional items
Ceramics 7,932 5,628
Materials 1,210 494
9,142 6,122
Exceptional items
Ceramics 484 -
Materials 63 -
547 -
Operating profit after exceptional items
Ceramics 8,416 5,628
Materials 1,273 494
9,689 6,122
Unallocated items
Finance income 60 5
Finance costs (148) (164)
Profit before income tax 9,601 5,963
2. Net exceptional income
In the year ending 31 December 2022 Company treated the following items as
exceptional.
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Income
Disposal of assets 471 -
COVID Rate Relief Credit 550 -
Expenditure
Employee Cost of Living Support (415) -
Restructuring (59) -
Net exceptional income 547 -
There were no exceptional items in the year ending 31 December 2021.
3. Finance income and costs
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Finance income
Interest income on cash and cash equivalents 60 5
Finance income 60 5
Finance cost
Interest on pension scheme (113) (136)
Interest on lease liabilities (35) (23)
Other interest - (5)
Finance costs (148) (164)
The interest cost arising from pension schemes is a non cash item.
4. Income tax expense
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Current taxation 617 671
Current taxation - exceptional 14 -
Deferred taxation 1,075 1,126
Income tax expense 1,706 1,797
2. Net exceptional income
In the year ending 31 December 2022 Company treated the following items as
exceptional.
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Income
Disposal of assets 471 -
COVID Rate Relief Credit 550 -
Expenditure
Employee Cost of Living Support (415) -
Restructuring (59) -
Net exceptional income 547 -
There were no exceptional items in the year ending 31 December 2021.
3. Finance income and costs
Audited
Audited
Year to
Year to
31 December 2022
31 December 2021
£000
£000
Finance income
Interest income on cash and cash equivalents
60
5
Finance income
60
5
Finance cost
Interest on pension scheme
(113)
(136)
Interest on lease liabilities
(35)
(23)
Other interest
-
(5)
Finance costs
(148)
(164)
The interest cost arising from pension schemes is a non cash item.
4. Income tax expense
Audited
Audited
Year to
Year to
31 December 2022
31 December 2021
£000
£000
Current taxation
617
671
Current taxation - exceptional
14
-
Deferred taxation
1,075
1,126
Income tax expense
1,706
1,797
5. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit after income tax and
on 11,009,068 (2021: 11,022,835) ordinary shares, being the weighted average
number of ordinary shares in issue during the year. Adjusted basic earnings
per share is calculated after adjusting for the post tax effect of exceptional
items (see Note 2).
Audited Audited
Year to Year to
31 December 2022 31 December 2021
Pence per share
Basic earnings per share 71.7 37.8
Less Exceptional items (4.8) -
Adjusted basic earnings per share 66.9 37.8
6. Reconciliation of Operating profit to cash generated from operations
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Cash flows from operating activities
Operating profit 9,689 6,122
Adjustments for:
Depreciation and amortisation 2,983 2,838
Gain on disposal of property, plant and equipment (4) (5)
Charge for share based payment 100 45
Defined benefit pension cash contribution (1,750) (1,362)
Changes in working capital
Inventory (5,403) 2,337
Trade and other receivables (3,067) (6,396)
Trade and other payables 2,391 7,048
Cash generated from operations 4,939 10,627
7.
Dividend
The dividends paid in the year were as follows:
2022 2021
Ordinary £'000 £'000
Final dividend 2021 17.3p (2020: nil) per 10p ordinary share 1,907 -
Interim 2022 10.5p (2021: 6.7p) per 10p ordinary share paid 1,155 739
3,062 739
The Directors now recommend payment of the following dividend:
Ordinary dividend:
Final dividend 2022 21.0p (2021: 17.3p) per 10p ordinary share 2,315 1,907
Dividends on treasury shares held by the Company are waived.
8. Retirement benefit obligations
The position of the Company's Defined Benefit Pension Scheme has improved
substantially in the year, moving from a deficit of £7,156,000 at 31 December
2021 to a surplus of £6,924,000 at 31 December 2022. The Company has
recognised this surplus in accordance with international accounting standards
under IAS 19 and IFRIC 14. The principal reason for the change from deficit to
surplus was the effect of the increase in the discount rate applied to scheme
liabilities (2022: 4.9% (2021: 1.8%)) following the general increase in
interest rates, gilt and corporate bond yields during the latter part of
2022. Since this change in interest rates the Scheme Trustees have amended
the asset holdings within the Scheme increasing holdings of gilt investments
to secure a closer interest rate match between liabilities and assets.
Audited Audited
Year to Year to
31 December 2022 31 December 2021
£000 £000
Liability at 1 January (7,156) (10,382)
Interest cost (113) (136)
Experience (losses) / gains (3,652) 45
Re-measurement from change in assumptions 24,714 (211)
Re-measurement of return on plan assets (8,619) 2,166
Employer contributions 1,750 1,362
Asset/ (liability) at 31 December 6,924 (7,156)
9. Share buybacks
During the year the Group re-purchased 25,000 (2021: nil) 10p ordinary shares
and re-issued nil (2021: nil) under employee share option schemes. The Group
currently holds 32,337 shares (2021: 7,337) shares in Treasury. The Company
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 2022 Annual General Meeting.
10. Basis of preparation and accounting policies
The financial information included in the preliminary announcement for year to
31 December 2022 has been approved by the Board on 12 April 2023.
The final financial statements do not constitute the statutory accounts of the
Company within the meaning of section 434 of the Companies Act 2006, but are
derived from those accounts, which have been prepared in accordance with
international accounting standards in conformity with the requirements of the
Companies Act 2006
This information has been prepared under the historical cost 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 final financial
statements as were applied in the Group's financial statements for the year
ended 31 December 2021.
Statutory accounts for the year ended 31 December 2021 have been delivered to
the Registrar of Companies. The auditors have reported on those accounts.
Their report was not qualified, did not include a reference to any matters to
which the auditors drew attention by way of emphasis without qualifying their
report, and did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
Statutory accounts for the year ended 31 December 2022 will be delivered to
the Registrar of Companies after the Company's Annual General Meeting and will
also be available on the Company's website (www.churchill1795.com
(http://www.churchill1795.com) ) in May 2023.
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