REG - Churchill China PLC - Final Results
09/04/2025 07:00
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RNS Number : 2127E Churchill China PLC 09 April 2025
For immediate release 9 April 2025
CHURCHILL CHINA plc
("Churchill" or the "Company" or the "Group")
FINAL RESULTS
For the year ended 31 December 2024
Resilient 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 2024.
Financial Overview
2024 2023
Revenue £78.3m £82.3m
Profit before tax £8.5m £10.8m
Cash and cash equivalents £10.1m £13.9m
EBITDA £11.7m £13.8m
EPS 57.9p 70.2p
Interim dividend 11.5p 11.0p
Final dividend 26.5p 25.0p
Business Overview
· Resilient profit performance in difficult markets
· Customer service at 97% same or next day order delivery from stock
· Continuing improvement in yields and efficiency offsetting lower
production volumes
· Energy costs well controlled
· Capital investment programme continues apace with focus on factory
automation
· Significant new installation and project wins in UK and Rest of World
· Strong replacement business
· Investments in sales and marketing maintained
· Well-funded, strong balance sheet
· Dividend marginally improved, Board confidence in medium term
David O'Connor, Chief Executive of Churchill China commented:
"2024 was a challenging year with market contraction driving lower sales. We
continue to address those activities that are within our control. We have
accelerated our continuous improvement programme across the factory.
Correspondingly, yields have improved and we see further opportunities for
significant savings through this programme. In addition we are driving our
capital expenditure to focus on innovation and cost reduction through
automation and process control.
We continue to win new installations and projects across all our markets and
see strong replacement orders from our installed customer base, which
highlights the resilience of our business in this current market downturn. We
expect to see financial returns from our improvement activities over the
coming years as the underlying macro conditions and consumer sentiment
improves."
Analyst Meeting
An in-person meeting for analysts will be held at 10:00am today 9 April 2025
at the offices of Burson Buchanan, 107 Cheapside, London, EC2V 6DN. An online
facility is available for those unable to attend in person. To register for
either the in-person or online meeting please contact Burson Buchanan by email
at 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 / Michael Cunningham
Burson Buchanan Tel: 020 7466 5000
Mark Court / Abigail Gilchrist / Sophie Wills
ChurchillChina@buchanan.uk.com
Investec Bank plc (Nominated Adviser and Joint Broker) Tel: 020 7597 5970
David Flin / Oliver Cardigan
Panmure Liberum Limited (Joint Broker) Tel: 020 3100 2000
Edward Thomas / John Moore
Chairman's Statement
Operational and commercial performance
These results demonstrate the strength of our brand as we continued to
experience steady demand in weak markets both in the UK and export. We
continued to deliver new product into the market with those introduced in the
last two years delivering £7m of sales. Our performance in our core markets
was strong with the UK showing good resilience and we performed comparatively
well in northern Europe.
2024 was however, a challenging year for the Company. Waning consumer
confidence and political uncertainty dominated both at home and in our major
overseas markets, meaning that even our strong performance was against a
backdrop of decline. Furthermore, the October UK Budget created further
financial challenges for our UK hospitality customer base and added
considerably to our costs of employment.
As a result, revenue in the year reduced to £78.3m, down from £82.3m in
2023, a reduction of 4.9% year-on-year. The profit impact of reduced volumes
and a difficult pricing environment was partially offset by improved
operational performance, leaving profit before tax at £8.5m for the year
(2023: £10.8m) representing a return on sales of 10.9% (2023: 13.1%).
Across all of our key markets, the year was characterised by a lower number of
new installations and replacements. In our core UK market, we believe that we
have continued to grow market share, albeit within a contracting market. While
growth opportunities remain in our key export markets, economic conditions
have held back share gains.
Operationally, the Company continues to have a long-term perspective and is
addressing those factors that are within our control. Efficiencies and yields
continued to improve in the year, and we have now surpassed the already
impressive pre COVID yields achieved in 2019. We now believe ourselves to be
sector leading in terms of our waste levels through our manufacturing process,
but encouragingly our continuous improvement activities give us confidence
that there is more to come.
The strength of our unencumbered balance sheet and our strong cash position
has allowed us to maintain healthy capital expenditure and dividend payments
during the year, meaning the Company had an outflow of £3.8m (2023: inflow
£4.3m). This left our year end cash balance at £10.1m (2023: £13.9m).
Overall, business performance has been resilient given the headwinds faced,
and we continue to look forward to an improving economic situation for which
we are well positioned.
Dividend
We are pleased to propose a final dividend of 26.5p per share giving a total
dividend of 38.0p per share for the year. Whilst profitability is down for the
year, the level of dividend highlights the Board's belief that the Company can
continue to make sustainable cash flows, and that the underlying performance
of the business has the potential for sustainable growth.
Consolidating Growth
Outside the UK, the Company continues to have low market share in large
fragmented markets where we invest in sales and marketing to increase market
share and support our move from whiteware to value added product. A focus on
overcoming the cost pressures on the business through improving yield and
productivity on the factory floor have been ongoing and have, to date, been
successful. This has allowed the Company to maintain a competitive price point
within the market and hold market share.
The Company expects export growth to continue once market conditions improve,
and we continue to see significant opportunities for sales expansion medium
term in these overseas markets.
The Company is firmly committed to maintaining an active capital expenditure
program to facilitate our long-term focus on cost reduction, productivity and
yield. In addition, we continue to investigate the opportunities from
alternative energy and reduced carbon processes to achieve both net zero and
reduced cost.
Board changes
As communicated in last year's report, in January we welcomed Martin Payne as
our Senior Independent Director and Audit Committee Chair. We also bade
farewell to Brendan Hynes in June, who had served the Company as Audit
Committee Chair for almost 11 years.
Employees
I would like to take this opportunity to thank the hard work and dedication of
all our employees on delivering the Company's result under challenging
conditions, including those who left us as a result of our actions on costs
within the year.
Environmental, Social and Governance ('ESG')
We continue to focus on ESG within the business, with energy projects
continuing to make up the bulk of our focus in this area. Following trials of
electrification of our glazing lines, we have seen significant yield
improvements through process consistency and control. This has moved projects
that were seen as trials into mainstream and further iterations of these
projects are now ongoing. This project will reduce the energy footprint of
glazing by 80%, a process that pre-electrification would have consumed circa
12% of the factory's gas.
We have also refreshed the governance aspect of the board by complying ahead
of adoption dates with the QCA code, revisiting and reviewing our terms of
reference for our various committees and undergoing a board evaluation process
during the year.
Outlook
The Company continues to deliver differentiated performance products that are
highly regarded in the marketplace. We continue to have a business that has a
strong installed customer base leading to healthy replacement business which
we expect to continue through 2025. The area that is currently more uncertain
is the number of new installations however, as always, with our market leading
delivery times and stock levels we are always well placed to service new
installations rapidly.
A more robust hospitality market is required for a step forward in our market
penetration and profitability. We will continue to focus on improving
efficiencies within the business and invest strategically to ensure we are in
the best position to capitalise on future opportunities, as underlying macro
conditions and consumer sentiment improves.
Robin G.W. Williams
Chairman
8 April 2025
Strategic report
for the year ended 31 December 2024
The Directors present their Strategic Report for the Group for the year ended
31 December 2024.
Principal activities
Churchill China is a UK based manufacturer of performance tableware primarily
supplying into the hospitality sector. Utilising a high-performance vitreous
body, the Company leverages its technical advantages to deliver superb value
in use and value for money to its end users.
In addition to the supply of tableware, the Group supplies the majority of the
UK pottery industry with materials for the manufacture of ceramics. The Group
utilises its extensive technical abilities to supply high quality body
materials, glaze and colour.
Business model
The Group supplies customers worldwide with a range of high-performance
tabletop products, primarily ceramic tableware. Most of these revenues come
from our UK manufacturing facilities although we do supplement these with some
outsourced products.
We focus primarily on the hospitality sector which generates most of our
revenues. This focus is driven by the attractiveness of the sector, with
revenues seen as long term, recurring and, whilst vulnerable to short term
economic fluctuations, reasonably stable.
The market is highly fragmented and so our strategy of identifying strong,
in-territory distributors to work with, allows us to deliver to a wide range
of customers. From large chains through to small independent restaurants we
are perfectly placed to offer innovative product and design to give a
competitive, differentiated advantage to our customers.
The growth strategy for the Company is to focus on those areas currently
underserved by our competitors with regards to customer service. Our ability
to fulfil customer orders, in the vast majority of cases, in under 48 hours
gives us a significant competitive advantage.
Culture and Values
As a company with a long history, our values are well defined. Innovation,
cooperation, uncompromising customer service, trust and honesty are the core
values that drive our behaviours on a day-to-day basis.
Our decision making is based on taking decisions that are aligned with adding
long term value to our shareholders, whilst being mindful of our
responsibilities to our wider stakeholders.
The business culture is driven by the executive leadership team and hinges on
openness and giving our colleagues the space to develop and grow. While there
are controls in place to protect the business, colleagues are given the space
to make decisions without fear of failure. The average term of service of our
staff is 11.8 years, which is a key KPI for the business and we believe this
highlights our ability to create a good working environment for our
colleagues.
The Board believe that this approach allows our colleagues to become the
leaders of the future by developing their skills and abilities.
Finally, the Company engages on multiple levels with our customers, engaging
at an early stage of the design process to get the market view of proposed
products, and delivering on our promise of "performance delivered".
Business environment
The Company always expected 2024 to be a challenging year which would be
highly dependent on a recovery in H2. Unfortunately, this recovery never
materialised, and trading was broadly flat from H2 2023 through to the end of
2024.
The well documented macro-economic factors at play have impacted both our own
cost base and that of our end market, whilst the cost of living pressures on
consumers have meant that opportunities to pass cost increases on in full are
more limited.
Regardless of this, the Company put through a price increase in the early part
of the year and this was accepted by our customers. Our differentiated,
performance offering still delivers a level of pricing power and this can be
seen by us retaining, and in some markets, growing our market share, albeit in
declining markets.
The Company continues to have a strong installed base which allows a high
level of replacement business where customers will continue using Churchill
products to replace breakages. What we are seeing however is a reduction in
the number of new openings in our more established markets. That said our
current pipeline for installation business in our export markets remains
strong.
Evidence from our end users suggests that the hospitality trade is still
healthy, and consumers continue to eat out. What is happening however is that
profitability within establishments is being compressed and it is this dynamic
that is restricting the growth in sales that the company has seen for the last
15 years.
Promoting the success of the Company
It is the duty of the Directors under s172 of the Companies Act 2006 to
promote the long-term success of the Company to the benefit of members as a
whole and acting fairly with regard for the interests of other stakeholders in
the business.
Other stakeholders include employees, customers, suppliers, our pension fund
members, our local and the wider community, government, and other regulatory
bodies.
Churchill has been in existence since 1795 and always taken a long-term
approach to business, particularly in relation to investment and in
understanding the opportunities open to us and the risks to which we are
exposed. To operate a successful and sustainable business model it is
necessary to ensure that all the contributors to the success of the business
understand their place within it and feel that the Company operates ethically
and fairly in its dealings with them.
The Board has regard to the interests of all stakeholders in its discussions
and reaches balanced decisions with the sustainability of the business
uppermost in its considerations. Churchill maintains a financial model that is
aligned with this objective such that capital allocation decisions, where
possible, do not unfairly prioritise the interests of one group of
stakeholders over others. The Board is aware of the need to support regular
revenue and capital investment in the development of our business, and we
orientate our operations accordingly.
We aim to deliver well designed, performance products and outstanding service
at appropriate price levels to our customers. At the same time, we acknowledge
that to meet these levels of customer service, we are reliant upon good
relationships with a well-motivated workforce and fair and balanced
relationships with a range of suppliers. We understand that we have a
responsibility to pay appropriate levels of taxation and to support the future
pensions of our scheme members. We consider our dividend policy carefully in
light of the overall needs of the business and the interests of other
stakeholders. Our policy is formulated to ensure that dividend payments are
not excessive in relation to profits, and do not introduce excessive levels of
risk in relation to the sustainability of the business.
Churchill aims to manage its effect on our local community and the
environment. We have engaged with the community on an ongoing basis through
charitable and educational support. The business operates several initiatives
aimed at minimising our waste products, recycling waste where possible and in
the reduction of our energy usage and carbon footprint. We have made several
investments and process changes to reduce our use of energy. These investments
continue and have had significant impacts on process stability and yield,
allowing us to improve efficiencies in the factory.
The business has regular contact with our workforce through both formal and
informal mechanisms. The scale of our business and our open culture allows the
Board and management to engage with our employees on a day-to-day basis and
employees are encouraged to raise issues. We have a recognised trade union
representing most of our weekly paid employees and we meet regularly with
their representatives. However, we believe that other initiatives including on
site briefings, communication boards and regular news updates provide the most
important means of engaging with our workforce. We believe that our workforce
is engaged and motivated.
We meet with suppliers on a regular basis to provide information in relation
to our forward plans and review performance. As in other elements of our
business we enjoy long standing relationships with most of our suppliers. On
average we pay suppliers within 36 days (2023: 35 days) of invoice. We believe
our suppliers regard Churchill as a good customer.
The Board consults regularly with shareholders through formal meetings,
company visits and informal discussions.
Voting on resolutions at the 2024 Annual General Meeting was positive with
over 99% of votes cast being in favour of the resolutions put to the meeting.
The Board reviews voting carefully after each Annual General Meeting.
Resources and relationships
Our key resources remain our employees and customers, our technical and
business skills, our long heritage of manufacturing and willingness to embrace
new methods to deliver an outstanding service.
One of the key elements of our sustainable market advantage is the success of
our innovation process. We have developed this process to research and
identify market trends and design new products to satisfy these trends.
Churchill, along with other UK manufacturers, has a significant technical
advantage in the nature of the product we offer to our markets. Our product
offers significant benefits in terms of durability and overall lifetime cost
to users. This technical advantage has been developed over many years and we
hold significant intellectual property in our materials and processes.
The Group operates from two sites in Stoke on Trent, England, a leading centre
for ceramic excellence worldwide. This gives us access to key suppliers,
technical support and experienced staff. Our main manufacturing plant and
logistics facilities have benefitted from significant and regular long-term
investment to improve our business's efficiency and effectiveness. We also
operate from several smaller locations and representative offices around the
world.
Our employees also give us significant advantage. We believe we recruit,
retain, and develop high quality individuals at all levels within the business
who contribute towards the success and growth of the Company and maintain our
core values. We have maintained our investment in training and development to
provide more fulfilling roles for our staff and improve the effectiveness and
productivity of our workforce. The Company invests in robotics and
mechanisation in areas that allow the removal of repetitive and unfulfilling
tasks. We have continued to implement a number of initiatives to both
develop and reward our colleagues to the benefit of both them and the business
and this approach is something that is ingrained in the Company culture.
We have long standing relationships with our customers. Whilst many of these
are not contractual, we continue to supply the same customers year after year
with products that meet their requirements. Our customers value our technical
ability, our service and our commitment to high quality design and innovation.
Churchill has long enjoyed a market leading reputation for service. Our
operational plans are geared towards meeting high levels of on time delivery
both in the UK and overseas. We hold extensive inventories to meet these
service requirements and have emphasised flexibility and responsiveness within
our manufacturing process.
Strategy
The Group's objective is to generate long term benefits to all stakeholders in
the business by the efficient provision of value to customers through
excellence in design, quality and service.
We aim to increase the value we provide to our stakeholders through steady
increments to sales and margins, through alignment of our cost base with
profit opportunities and a focus on cash generation.
Our long-term aim is to build our presence in markets offering sustainable
levels of revenue and profitability. For several years this has led us towards
development of our position in hospitality markets worldwide.
Innovation remains important to support our ambition to develop our business.
We have invested significant resources in new staff and flexible technology to
increase our capability in this area. It is a key strategic aim to design
products that meet our end users' requirements in terms of performance, shape
and surface design. Our target markets require products that are aesthetically
appealing whilst also performing to appropriate customer and technical
standards.
We understand that quality must exist throughout our business process. Quality
is reflected not only in the appearance of our product but in its design, its
technical performance and in the systems which support the fulfilment of our
contract with our customers. We invest to maintain the performance of our
products and to extend our capabilities.
Customer service remains a major part of our strategy, and the fulfilment of
customer expectations is critical to the maintenance of good relationships.
Our production and logistics facilities have been designed to balance
efficiency and flexibility within manufacturing to ensure that we can respond
quickly to unexpected demand levels and to meet ambitious on time, in full,
delivery targets. We invest regularly in these facilities to maintain a market
leading position in customer service.
Business model
Our business model is designed to allow us to identify markets where we may
profitably grow our revenues on a sustainable long-term basis. We research
customer product requirements and distribution structures in new markets and,
if they offer profit opportunities, invest to generate revenue, margin and
ultimately a return for the business and our stakeholders.
We continue to expect short to medium term growth to be weighted towards
export markets and particularly Europe, where we have a developing
distribution structure.
Our target remains to deliver progressive increases in the proportion of added
value products within our business. We invest steadily in increasing our
production capability and in improving our ability to offer added value to our
customers. This involves investment in new product development as well as
capital expenditure on productive capacity. We expect to continue to invest
for the long term in our UK manufacturing facilities.
As a major energy user, we have recognised and acknowledged the importance to
our future operations of reducing our energy consumption substantially. We
have commenced a long-term process to develop several initiatives to meet
forward energy targets. A number of these initiatives are underway. We are
pleased with the potential impact from these actions but recognise that this
is a long-term process requiring continuing focus.
As our business develops, we need different skills and a core part of our
model is to train, develop and recruit staff to meet these requirements.
Operationally the business has performed very well, driving efficiencies into
the production process, and improving underlying gross margin. Unfortunately,
the reduced volumes and increased costs in the year have resulted in the
Company delivering a reduction in contribution margin albeit of only 1.2%.
Revenue in the year fell from £82.3m in 2023 to £78.3m, with the shortfall
mainly in the first half of the year. This was compounded in Q4 when,
predominately in the EU, macro-economic situation reduced business confidence
within the hospitality sector.
The Company has however continued to maintain a good level of sales in the UK
given our strong market position in the pub chain sector, which tends to be
less impacted by economic sentiment compared with independents.
The focus of the business in 2024 was to continue our exemplary customer
service offering along with driving down costs of production within the
factory. Significant continuous improvement programmes have been ongoing
throughout the year, and this has led to a significant improvement in yields
which we now believe are industry leading and surpass even those achieved
before the pandemic.
We have continued to introduce new products with a focus on our new inkjet
capabilities where we combine both our historic hand decoration techniques
alongside new technology.
We believe this continues with our core competence of delivering innovative
products that are difficult to replicate.
As previously mentioned, the eating out market continues to be buoyant but has
been suffering from reduced profitability and the recent budget announcement
on National Insurance contributions and the above inflation increase in
minimum wage has caused some outlets to pause and review their offerings.
Fundamentally though the consumer appears to still want to eat out and to
favour experiences over possessions. We expect that in the longer term the
customer base will improve its profitability and that investment will
recommence.
Our Materials business, Furlong Mills, has performed well during the year,
however the general retail ceramics market, where most of our customers
operate, has also been under pressure during the year with many of Furlong's
customers on reduced working in Q4. This has resulted in a reduction in sales
of £1.0m and, given the fixed nature of Furlong's cost base, a reduction in
profitability.
Overall cash has decreased in the year by £3.8m driven primarily by increased
stock of £1.4m and increased debtors of £1.2m. The debt position was
primarily driven by the timing of the year end which resulted in a short month
for collection and by a stronger position than usual at the end of 2023.
The Group's defined benefit pension scheme position continued to improve
during the year and the trustees have taken action to protect this position by
hedging for inflation and interest rates. The Group has assessed the
recoverability of the net asset arising from the scheme surplus and considers
that, based on the Trust Deed and Scheme rules, the surplus would be
recoverable on cessation of the scheme.
Environmental, Social and Governance (ESG)
Following the framework established in 2022 our ESG committee, comprised of
Executive Directors and Senior Management, have continued to develop our
approach and further embed the ESG objectives and actions into our business
planning. The ESG Committee and subcommittee working parties have continued to
make good progress against the areas identified.
The ESG Committee has been focussing on the identification of the longer-term
pressures that will affect the business in both the medium term through to
2030 and trying to identify potential longer-term issues through to 2050.
Whilst these timeframes naturally mean that there is a significant level of
uncertainty in any issues identified, this strategy aligns with the Company's
long-term approach to business.
We use a significant amount of energy in our processes, and this is an area of
strategic focus of the business. Substantial progress has been made in
identifying efficiency, recovery, and generation initiatives across our
operations. We have researched proven and emerging technologies to assess how
these can potentially combine to a path to Net Zero, whilst maintaining the
performance characteristics of the technically differentiated and durable
product that we manufacture. This process has included the initiation of
several research projects in relation to our materials and processes,
contribution to industry initiatives and use of specialist advice from
suppliers and other experts.
The business employs over 700 people across two manufacturing sites who work
predominantly in an industrial environment. Our Health and Safety procedures
and systems have continued to manage what is an important area for the
business. Of particular focus has been our Furlong Mills site which we
acquired in 2019.
Our Governance procedures have been subject to ongoing review and particularly
in supporting the demonstrable independence of our Non-Executive Directors
under the QCA Code. The latest appointment made in January 2024 means that all
non-Executive Directors are independent, and that Board Committees are
properly constituted. In addition, following the publishing of the new QCA
code in late 2023, the Board have decided to early adopt one of the changes
and as a result all directors were put forward for election at the 2024 AGM.
We have continued to develop and implement the Board succession planning
process, and this will remain under constant review.
During 2024 the Board carried out an internal evaluation of its effectiveness.
The minor issues identified in the 2023 review were reviewed and no
significant issues were highlighted, again the Board will continue with this
process in the coming years.
The Company continues to operate a business model which is focused on long
term sustainable success, delivering returns to all stakeholders. We will
continue to develop and evolve our ESG agenda and over time, will translate
our goals and objectives into a published reporting framework, with
benchmarks, key performance indicators and our progress against them. The
following tables identify and update our goals and actions to achieve them.
Consolidated Income Statement
for the year ended 31 December 2024
2024 2023
£'000 £'000
Revenue 78,279 82,339
Operating profit 7,995 10,252
Finance income 631 611
Finance costs (90) (75)
Profit before income tax 8,536 10,788
Income tax expense (2,171) (3,071)
Profit for the year 6,365 7,717
Basic earnings per ordinary share 57.9p 70.2p
All of the above figures relate to continuing operations.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
£'000 £'000
Profit for the year 6,365 7,717
Other comprehensive (expense)/income
Items that will not be reclassified to profit and loss:
Remeasurements of post-employment benefit obligations net of tax (835) (900)
Items that may be reclassified subsequently to profit and loss:
Currency translation differences 4 (25)
Other comprehensive (expense) for the year (831) (925)
Total comprehensive income for the year 5,534 6,792
Amounts in the statement above are disclosed net of tax.
Consolidated Statement of Financial Position
as at 31 December 2024
2024 2023
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 24,578 25,085
Intangible assets 616 663
Deferred income tax assets 131 82
Retirement benefit assets 8,179 7,855
33,504 33,685
Current assets
Inventories 23,318 21,896
Trade and other receivables 12,191 11,036
Cash and cash equivalents 10,100 13,933
45,609 46,865
Total assets 79,113 80,550
Liabilities
Current liabilities
Trade and other payables (11,508) (14,355)
(11,508) (14,355)
Non-current liabilities
Lease liabilities (550) (677)
Deferred income tax liabilities (5,792) (5,577)
Non-current liabilities (6,342) (6,254)
Total liabilities (17,850) (20,609)
Net assets 61,263 59,941
Equity attributable to owners of the Company
Issued share capital 1,103 1,103
Share premium account 2,348 2,348
Treasury shares (431) (431)
Other reserves 1,160 1,363
Retained earnings 57,083 55,558
Total equity 61,263 59,941
Consolidated statement of changes in equity
for the year ended 31 December 2024
Retained earnings Issued share capital Share premium account Treasury shares Other Total equity
£'000 £'000 £'000 £'000 reserves £'000
£'000
Balance at 1 January 2023 52,284 1,103 2,348 (431) 1,344 56,648
Comprehensive Income/(expense):
Profit for the year 7,717 - - - - 7,717
Other comprehensive income/(expense):
Depreciation transfer - gross 12 - - - (12) -
Depreciation transfer - tax (3) - - - 3 -
Re-measurement of post-employment benefit obligations - net of tax (900) - - - - (900)
Currency translation - - - - (25) (25)
Total comprehensive income 6,826 - - - (34) 6,792
Transactions with owners
Dividends (3,519) - - - - (3,519)
Share based payment - - - - 53 53
Deferred tax - share based payments (33) - - - - (33)
Total transactions with owners (3,552) - - - 53 (3,499)
Balance at 31 December 2023 55,558 1,103 2,348 (431) 1,363 59,941
Balance at 1 January 2024 55,558 1,103 2,348 (431) 1,363 59,941
Comprehensive Income/(expense):
Profit for the year 6,365 - - - - 6,365
Other comprehensive income/(expense):
Depreciation transfer - gross 12 - - - (12) -
Depreciation transfer - tax (3) - - - 3 -
Re-measurement of post-employment benefit obligations - net of tax (835) - - - - (835)
Currency translation - - - - 4 4
Total comprehensive income 5,539 - - - (5) 5,534
Transactions with owners
Dividends (4,014) - - - - (4,014)
Share based payment - - - - (198) (198)
Total transactions with owners (4,014) - - - (198) (4,212)
Balance at 31 December 2024 57,083 1,103 2,348 (431) 1,160 61,263
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
2024 2023
£'000 £'000
Cash flows from operating activities
Cash generated from operations 5,085 8,321
Interest received 227 229
Interest paid (90) (75)
Income taxes paid (1,574) -
Net cash generated from operating activities 3,648 8,475
Cash flows from investing activities
Purchases of property, plant and equipment (3,003) (5,334)
Proceeds on disposal of property, plant and equipment 39 54
Purchases of intangible assets (135) (73)
Repayment of other financial assets - 5,057
Net cash used in investing activities (3,099) (296)
Cash flows from financing activities
Dividends paid (4,014) (3,519)
Principal elements of leases (368) (330)
Net cash generated used in in financing activities (4,382) (3,849)
Net (decrease)/increase in cash and cash equivalents (3,833) 4,330
Cash and cash equivalents at the beginning of the year 13,933 9,604
Effects of exchange rate changes on cash and cash equivalents - (1)
Cash and cash equivalents at the end of the year 10,100 13,933
Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities
2024 2023
£'000 £'000
Continuing operating activities
Operating profit 7,995 10,252
Adjustments for:
Depreciation and amortisation 3,666 3,510
Gain on disposal of property, plant and equipment (13) (16)
(Reversal) / charge for share-based payments (198) 53
Defined benefit pension cash contribution (1,167) (1,750)
Pension administrative costs 94 -
Changes in working capital:
Inventory (1,422) (6,007)
Trade and other receivables (1,150) 2,346
Trade and other payables (2,720) (67)
Net cash inflow from operations 5,085 8,321
1. Segmental Analysis
The Group reports to the Chief Operating Decision Maker, the Board, on two
distinct segments of revenue. The Group's reportable segments are as follows;
Ceramics, the sale of ceramic tableware and complementary items and;
Materials, the sale of materials for the production of ceramics, predominantly
to the tableware industry.
2024 2023
£'000 £'000
Market segment - Revenue
Ceramics 71,097 74,159
Materials 13,059 14,687
84,156 88,846
Intra group revenue (5,877) (6,507)
78,279 82,339
2024 2023
£'000 £'000
Geographical segment - Revenue
United Kingdom 32,790 34,004
Rest of Europe 30,790 32,949
USA 7,232 8,399
Rest of the World 7,467 6,987
78,279 82,339
The profits of the business are allocated as follows:
2024 2023
Operating profit £'000 £'000
Ceramics 6,999 9,106
Materials 996 1,146
7,995 10,252
2024 2023
Unallocated items £'000 £'000
Finance Income 631 611
Finance costs (90) (75)
Profit before income tax 8,536 10,788
2. Finance income and costs
2024 2023
£'000 £'000
Interest income on cash and cash equivalents 227 229
Interest on defined benefit schemes 404 382
Finance income 631 611
Interest on lease liabilities (74) (64)
Other interest (16) (11)
Finance costs (90) (75)
Net finance income/(costs) 541 536
3. Income tax expense
2024 2023
Group £'000 £'000
Current tax - current year 1,679 1,507
Current tax - adjustment in respect of prior periods 9 128
Current tax 1,688 1,635
Deferred tax
Current year 489 1,144
Current year - adjustment in respect of prior periods (6) 292
Deferred tax 483 1,436
Income tax expense 2,171 3,071
4. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit after income tax and
on 10,997,835 (2023: 10,997,835) ordinary shares, being the weighted average
number of ordinary shares in issue during the year.
2024 2023
Pence per Pence per
share
share
Basic earnings per share 57.9 70.2
(Based on earnings £6,365,000 (2023: £7,717,000))
5. Dividends
The dividends paid in the year were as follows:
Group and Company 2024 2023
Ordinary £'000 £'000
Final dividend 2023 25.0p (2022: 21.0p) per 10p ordinary share 2,749 2,309
Interim 2024 11.5p (2023: 11.0p) per 10p ordinary share paid 1,265 1,210
4,014 3,519
The Directors now recommend payment of the following dividend:
Ordinary dividend:
Final dividend 2024 26.5p (2023: 25.0p) per 10p ordinary share 2,914 2,749
Dividends on treasury shares held by the Company are waived.
6. Retirement benefit asset
2024 2023
£'000 £'000
Statement of financial position asset / (obligations)
Pension benefits 8,179 7,855
Income statement charge
Pension benefits 1,029 902
Administrative costs 94 -
Finance costs (404) (382)
The amounts recognised in the statement of financial position are determined
as follows:
2024 2023
£'000 £'000
Present value of funded obligations (37,144) (40,741)
Fair value of plan assets 45,323 48,596
Asset in statement of financial position 8,179 7,855
7. Basis of preparation and accounting policies
The financial information included in the preliminary announcement for year to
31 December 2024 has been approved by the Board on 8 April 2025.
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 2023.
Statutory accounts for the year ended 31 December 2023 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 2024 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 2025.
8. Statement of Directors' responsibilities in respect of the financial
statements
We confirm to the best of our knowledge that:
· The Group Financial Statements, which have been prepared in
accordance with UK-adopted International Accounting Statements, give a true
and fair view of the assets, liabilities, financial position and profit of the
Group; and ·
· The announcement includes a fair review of the development and
performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties that it faces.
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