REG - Churchill China PLC - Preliminary Results
21/04/2022 07:00
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RNS Number : 8189I Churchill China PLC 21 April 2022
For immediate release 21 April 2022
CHURCHILL CHINA plc
("Churchill" or the "Company" or the "Group")
PRELIMINARY RESULTS
For the year ended 31 December 2021
Strong demand delivers sustainable market share growth
Churchill China plc (AIM: CHH), the manufacturer of innovative performance
ceramic products serving hospitality markets worldwide, is pleased to announce
its Preliminary Results for the year ended 31 December 2021.
Key Highlights:
Financial
· Operating profit before exceptional items £6.1m (2020: £0.9m)
· Profit before exceptional items and tax £6.0m (2020: £0.8m)
· Reported profit before tax after exceptional items £6.0m (2020:
£0.1m)
· Adjusted* basic earnings per share 37.8p (2020: 6.5p)
· Basic earnings per share 37.8p (2020: 1.0p)
· Re-instated final dividend of 17.3p per share (2020: nil)
· Total dividend for the year 24.0p (2020: nil)
· Net cash and deposits of £19.0m (2020: £14.0m)
· Cash generated from operations £10.6m (2020: £1.8m)
o Working capital controlled as revenues grow
Business
· Total revenues £60.8m (2020: £36.4m)
· Strong performance following lifting of COVID restrictions
o Group H2: +111% on 2020, +4% on 2019
o Hospitality H2: +132% on 2020, +7% on 2019
· Continued market share gains across key markets
· Strong demand from customers and end users
· Input cost rises offset by sustainable sales price increases
· Further investment in UK manufacturing
· Continued progress on implementation of strategic plans
Alan McWalter, Chairman of Churchill China, commented:
"The second half of 2021 saw a strong recovery in our sales to the Hospitality
market such that the full year results are ahead of our expectations. We
continue to benefit from record levels of demand and, while we are mindful of
the potential impact of external factors on our markets and manufacturing
operations, we remain confident in our ability to deliver an improved
performance in 2022."
An online meeting for analysts will be held at 10.00am today 21 April 2022.
Analysts who require further details should contact Buchanan
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 / David Taylor / James Roper
Buchanan Tel: 020 7466 5000
Mark Court / Sophie Wills
Investec Tel: 020 7597 (Tel:020%207597) 5970
David Flin / Alex Wright / Ben Farrow
*Adjusted basic earnings per share is calculated after the adjusting for the
post tax effect of exceptional items.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report that Churchill's trading performance has continued to
improve with strong growth in orders from all our markets and progress on
improving our ability to satisfy this demand efficiently following the
disruption of COVID. The plans we implemented over the last two years have
allowed us to improve our competitive position and also to respond to the
impact of the changes to the business environment later in 2021. We continue
to make progress against our long term plans.
Our core strategy is to build our worldwide market share for the long term and
market conditions currently give us an opportunity to accelerate this growth.
The acquisition of market share is normally the most difficult element of our
strategy to deliver as we operate in a market where customers change suppliers
infrequently. Our decision to maintain a higher level of production during
2020 and to scale this up in the second half of 2021 has allowed us to take
and retain an increased share of recovering Hospitality markets in both the UK
and overseas.
The sharp increase in production output required to satisfy demand, together
with elevated levels of input price inflation, have in the short term
constrained the improvement in overall business performance. However, we have
still made satisfactory progress, exceeding our expectations for the year.
Current revenue performance is strong and at levels well ahead of comparable
periods. We believe that we continue to gain sustainable market share and
provide a best in class service to our customers, maintaining deliveries to a
market generally experiencing long lead times.
Financial Review
Total revenues rose to £60.8m (2020: £36.4m) as the effects of COVID-related
market restrictions were reduced through the year. As a comparison H2 sales
were higher than those achieved in the comparable period in 2019. Growth has
continued into the first months of 2022. Ceramics revenues were £55.6m (2020:
£33.1m). External revenue from Materials was £5.2m (2020: £3.3m). UK
revenues increased by £10.5m to £24.4m (2020: £13.9m). Export revenues also
grew, reaching £36.4m for the year (2020: £22.5m).
Overall gross margins were lower than in previous periods. Reduced output
levels in the first half of the year were followed by higher costs as output
and manpower levels increased quickly and input prices for materials and
energy rose. We expect to see an improvement in efficiency across 2022. Our
strong competitive position has allowed us to pass on higher input cost levels
through increased prices while continuing to offer customers a market leading
service.
Operating profit before exceptional items rose to £6.1m (2020: £0.9m).
Overhead cost levels continued to be carefully managed, supporting strategic
developments and maintaining our forward capability. Operating profit margins
before exceptional items were 10.1% (2020: 2.5%).
Profit before exceptional items and income tax was £6.0m (2020: £0.8m) with
the increase entirely reflecting improved operating profit.
The reported tax charge in the period includes the requirement to re-state the
deferred tax balances to reflect the increase in Corporation Tax rates to 25%
in 2023.
Adjusted basic earnings per share before exceptional items was 37.8p (2020:
6.5p).
Reported profit after exceptional items before tax was £6.0m (2020: £0.1m).
Basic earnings per share, after exceptional items, was 37.8p (2020: 1.0p)
Cash generation continues to be a strength of the business, with operating
profit levels of £6.1m (2020: £0.2m) being substantially exceeded by cash
generation of £10.6m (2020 £1.8m). We had anticipated a requirement to fund
additional working capital levels as the business recovered during the second
half of the year but delivered an improved position, aided by a reduction in
inventory levels as revenues grew ahead of output. Capital expenditure
increased to £3.7m (2020: £2.4m) further details of which are set out below.
We expect to increase our rate of investment in 2022 to support investments
targeting our energy footprint, additional value added product capacity and
improved productivity. Cash and deposits at the start of the year were £14.0m
and had increased to £19.0m by the year end.
Our record of cash generation and level of reserves allow us to accelerate
investment where we believe it will support the development of the business.
We continue to enjoy a strong, ungeared, balance sheet with net assets of
£42.7m. Our assets are largely tangible and also give us a high degree of
short term liquidity, if required.
Dividend
Following the re-instatement of dividend payments in September 2021 we are
pleased to propose a final dividend of 17.3p (2020: nil) per ordinary share.
This gives a total for the year of 24.0p (2020: nil) per ordinary share. This
dividend will be payable on 27 June 2022 to shareholders on the register on 31
May 2022 and reflects our confidence in the progress of the business and the
maintenance of our strong financial position. As previously announced all CJRS
support in relation to 2021 has been repaid. Once again, the Board would like
to express its thanks for the support of shareholders.
Business
Our overall performance in 2021 has reflected the considerable upheavals in
the general business environment through the year. We dealt well with the
hospitality market restrictions that affected much of the first half of 2021
and, as supply side issues impacted the later months of the year, we once
again responded quickly. We have been guided in this by our core principles,
firstly to continue to offer our customers a market leading service when our
competitors have struggled to maintain deliveries and, secondly, to build our
market share in profitable and repeat orientated markets. Both of these
reflect our continued belief that we should always plan and operate for the
longer term. The blend of our market, product and operational strategies has
allowed us to continue to perform well. As a result we are now benefiting from
exceptional demand from customers across all our markets and continue to build
long term market share.
Ceramics
Overall Hospitality sales in the year to 31 December 2021 were 90% of the
comparable period in 2019, with the shortfall entirely attributable to the
COVID affected first four months of the year where sales were approximately
half their 2019 levels. Sales in the second half year were 7% above 2019's
comparative. This growth rate has increased in the first months of 2022.
Export revenues continue to be our main focus for growth and we have made
progress in all of our overseas regions. The best performance was again from
Europe, where revenues rose by £9.9m and recovered to 2019 levels despite the
restricted start to the year. Sales in the second half year were 30% ahead of
the comparable period in 2019. Good progress continued to be made in the USA
and Rest of the World markets. UK sales have performed well with progress in
fragmented regional sales channels being supplemented by a later strong
recovery in national account business.
We have further increased the proportion of added value products within our
sales with the proportion of sales attributable to our differentiated
portfolio rising to 59%. We continue to develop and launch new products.
Retail revenues increased slightly during the period as we adjusted UK
production capacity on a tactical basis. In line with our strategy we expect
revenue to reduce in this area in 2022.
Materials
Furlong Mills has performed well during the year with strong demand both from
retail focused customers and from Churchill. Sales in the second half year
exceeded those made in the comparable period of 2019.
Operations
2021 has been a year of significant challenge for our manufacturing and
logistics operations. During the first half of the year output was maintained
at lower levels, but the business' desire to quickly scale output to meet
sharply rising demand has, as previously announced, introduced a number of
inefficiencies within our operations. We increased our manufacturing staff
numbers substantially over the course of the year in a difficult labour market
and this has inevitably led to productivity issues as new staff entered the
workplace. We have worked intensively to increase training and are pleased
that output levels and efficiency are now starting to improve. Additionally
the inflationary pressures more generally evident within the global economy
have also impacted both our material and energy costs. While we have
ultimately raised our prices to reflect these rises we have absorbed some of
the increases in the short term. Our energy price hedging through 2022 and
2023 is now at higher levels.
We have invested further in projects to support the forward development of our
operations. During the early part of the year we completed a number of
investments. We completed our third factory extension in the last eighteen
months which will aid flexibility and improve efficiency. We have also
installed additional added value product capacity and a further kiln to
support its use. Our forward plans now emphasise investment in reducing our
energy footprint and, importantly, in improving our productivity.
Alongside capital investment we have identified increased training of our
workforce as a key forward target. Alongside the high training requirement
associated with a rapidly growing workforce, we have re-invigorated our
Continuous Improvement 'Masterclass' programme and introduced other
initiatives aimed at developing skills and capabilities across our business.
Environmental, Social and Governance ('ESG')
Churchill has made good progress in relation to the definition and
implementation of ESG processes at strategic and operational levels across our
business. We believe that many of the elements of a sound approach to ESG are
already present within Churchill: We manufacture a product that is highly
sustainable given that it may be used several thousand times and our programme
of capital investment has given us a modern production facility ahead of those
of many of our competitors. We have always recognised the need to develop our
workforce and have ongoing research projects to both lower our energy usage
and reduce waste. However the work we have done to benchmark our operations
and to build an approach that embeds an ESG process within Churchill has
identified many other opportunities to improve our performance. We are in the
early stages of a project that will extend for several years, but we are clear
that it will bring many benefits to all the stakeholders in the Churchill
business.
Highlights for this year would include the investment of over £1.2m in
generating solar power at our main Stoke on Trent site, substantially reducing
our forward net electricity demand and the research into and subsequent
development of a ceramic body to reduce waste. We have many other initiatives
underway.
People
It is clear from the above report on the Company's operations and the
challenges faced during the year that our employees have once again had to
perform to a very high level to deliver a solid result. It would be invidious
to single out any particular group for praise, they have all performed well
and I thank them for their efforts, their initiative and above all, for their
commitment to their colleagues and the Company.
Outlook
The second half of 2021 saw a strong recovery in our sales to the Hospitality
market enabling us to deliver against our targets despite a less than
predictable business environment. Some of the issues arising from the
challenges we face continue to impact on our operations, but we are making
progress in resolving them and we continue to benefit from growing revenues.
Churchill has a long term approach to business and we believe that the
fundamentals of our strategic position remain strong. The Hospitality market
continues to be an attractive market characterised by a high level of repeat
business. We have a leading position within the market supported by a
technically differentiated product, a well invested operational base and a
robust financial position.
We continue to benefit from record levels of demand. Whilst there may be
concerns in relation to the effect of increased costs of living on
discretionary spending we are not as yet experiencing any impact from this on
order volumes. Our margin level remains affected by lower than desired levels
of productivity, but we expect to improve this progressively as the year
unfolds. While we are mindful of the potential impact of further COVID-related
restrictions and geopolitical developments on our markets and manufacturing
operations, we remain confident in our ability to deliver an improved
performance in 2022.
Alan McWalter
Chairman
21 April 2022
Churchill China plc
Consolidated Income Statement
for the year ended 31 December 2021
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Note
Revenue 1 60,839 36,362
Operating profit before exceptional items 6,122 922
Exceptional items 2 - (757)
Operating profit 6,122 165
Finance income 3 5 60
Finance costs 3 (164) (134)
Profit before exceptional item and income tax 5,963 848
Exceptional item 2 - (757)
Profit before income tax 5,963 91
Income tax (expense) / credit 4 (1,797) 22
Profit for the year 4,166 113
Profit for the year is attributable to: 4,166 113
Owners of the Company
Pence per Pence per
Share share
Basic earnings per ordinary share 5 37.8 1.0
Adjusted basic earnings per ordinary share 5 37.8 6.5
Diluted earnings per ordinary shares 5 37.8 1.0
Adjusted diluted earnings per ordinary share 5 37.8 6.5
Churchill China plc
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Other comprehensive income / (expense)
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations net of tax 1,499 (4,571)
Items that may be reclassified subsequently to profit or loss:
Impact of change in UK tax rate on deferred tax 557 84
Currency translation differences 10 (13)
Other comprehensive income / (expense) for the year 2,066 (4,500)
Profit for the year 4,166 113
Total comprehensive income / (expense) for the year 6,232 (4,387)
Attributable to:
Owners of the Company 6,232 (4,387)
All the above figures relate to continuing operations
Churchill China plc
Consolidated Balance Sheet
as at 31 December 2021
Audited Audited
31 December 31 December
2021 2020
£000 £000
Assets
Non Current assets
Property, plant and equipment 21,021 20,058
Intangible assets 1,022 1,306
Deferred income tax assets 1,842 2,082
23,885 23,446
Current assets
Inventories 10,486 12,823
Trade and other receivables 10,877 4,309
Other financial assets 4,005 3,258
Cash and cash equivalents 15,046 10,738
40,414 31,128
Total assets 64,299 54,574
Liabilities
Current liabilities
Trade and other payables (12,268) (5,663)
Current income tax liabilities - (24)
Total current liabilities (12,268) (5,687)
Non-current liabilities
Lease liabilities (217) (215)
Deferred income tax liabilities (1,975) (1,149)
Retirement benefit obligations (7,156) (10,382)
Total non-current liabilities (9,348) (11,746)
Total liabilities (21,616) (17,433)
Net assets 42,683 37,141
Equity attributable to owners of the Company
Issued share capital 1,103 1,103
Share premium account 2,348 2,348
Treasury shares (80) (80)
Other reserves 1,195 1,215
Retained earnings 38,117 32,555
42,683 37,141
Churchill China plc
Consolidated Statement of Changes in Equity
as at 31 December 2021
Issued
Retained share Share Treasury Other Total
earnings capital premium shares Reserves equity
£000 £000 £000 £000 £000 £000
Balance at 1 January 2020 37,034 1,103 2,348 (446) 1,802 41,841
Comprehensive income
Profit for the period 113 - - - - 113
Other comprehensive income
Depreciation transfer - gross 12 - - - (12) -
Depreciation transfer - tax (2) - - - 2 -
Deferred tax - change in rate 107 - - - (23) 84
Remeasurement of post-employment benefit obligations - net of tax (4,571) - - - - (4,571)
Currency translation - - - - (13) (13)
Total comprehensive income (4,341) - - - (46) (4,387)
Transactions with owners
Proceeds of share issue - - - 4 - 4
Share based payment 310 - - - (541) (231)
Deferred tax - share based payment (86) - - - - (86)
Treasury shares (362) - - 362 - -
Total transactions with owners (138) - - 366 (541) (313)
Balance at 31 December 2020 32,555 1,103 2,348 (80) 1,215 37,141
Churchill China plc
Consolidated Statement of Changes in Equity
as at 31 December 2021
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 Cash Flow Statement
for the year ended 31 December 2021
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Cash flows from operating activities
Cash generated from operations (note 6) 10,627 1,803
Interest received 5 60
Interest paid (28) (29)
Income tax paid (854) (847)
Net cash generated from operating activities 9,750 987
Cash flows from investing activities
Purchases of property, plant and equipment (3,740) (2,403)
Proceeds on disposal of property, plant and equipment 43 44
Purchases of intangible assets (12) (50)
Net cash used in investing activities (3,709) (2,409)
Cash flows from financing activities
Issue of ordinary shares - 4
Dividends paid (739) -
Principal elements of leases (247) (163)
Net purchase of other financial assets (747) (252)
Net cash used in financing activities (1,733) (411)
Net increase / (decrease) in cash and cash equivalents 4,308 (1,833)
Cash and cash equivalents at the beginning of the year 10,738 12,572
Exchange loss on cash and cash equivalents - (1)
Cash and cash equivalents at the end of the year 15,046 10,738
1. Segmental analysis
for the year ended 31 December 2021
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Revenue - segment
Ceramics 55,605 33,092
Materials 8,773 5,453
64,378 38,545
Less: Inter segment revenue (3,539) (2,183)
60,839 36,362
Revenue - geographic
United Kingdom 24,424 13,868
Rest of Europe 24,241 14,681
USA 6,388 4,145
Rest of the World 5,786 3,668
60,839 36,362
Operating profit / (loss) before exceptional items
Ceramics 5,628 1,104
Materials 494 (182)
6,122 922
Exceptional items
Ceramics - (666)
Materials - (91)
- (757)
Operating profit / (loss) after exceptional items
Ceramics 5,628 438
Materials 494 (273)
6,122 165
Unallocated items
Finance income 5 60
Finance costs (164) (134)
Profit before income tax 5,963 91
2. Exceptional items
In the year ending 31 December 2020 exceptional costs totalling £757,000 were recognised relating to expenses incurred directly in relation to the effect of COVID-19 and the restructuring of the business to reflect lower demand and output levels. This is largely composed of severance costs of £863,000 and further costs of £227,000, offset by the release of share based payment and related provisions of £333,000.
In the year ending 31 December 2021 no costs have been incurred directly in relation to COVID-19.
3. Finance income and costs
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Finance income
Interest income on cash and cash equivalents 5 60
Finance income 5 60
Finance cost
Interest on pension scheme (136) (105)
Interest on lease liabilities (23) (20)
Other interest (5) (9)
Finance costs (164) (134)
The interest cost arising from pension schemes is a non cash item.
4. Income tax expense /(credit)
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Current taxation 671 (15)
Current taxation - exceptional - (207)
Deferred taxation 1,126 143
Deferred taxation - exceptional - 57
Income tax expense / (credit) 1,797 (22)
2. Exceptional items
In the year ending 31 December 2020 exceptional costs totalling £757,000 were recognised relating to expenses incurred directly in relation to the effect of COVID-19 and the restructuring of the business to reflect lower demand and output levels. This is largely composed of severance costs of £863,000 and further costs of £227,000, offset by the release of share based payment and related provisions of £333,000.
In the year ending 31 December 2021 no costs have been incurred directly in relation to COVID-19.
3. Finance income and costs
Audited
Audited
Year to
Year to
31 December 2021
31 December 2020
£000
£000
Finance income
Interest income on cash and cash equivalents
5
60
Finance income
5
60
Finance cost
Interest on pension scheme
(136)
(105)
Interest on lease liabilities
(23)
(20)
Other interest
(5)
(9)
Finance costs
(164)
(134)
The interest cost arising from pension schemes is a non cash item.
4. Income tax expense /(credit)
Audited
Audited
Year to
Year to
31 December 2021
31 December 2020
£000
£000
Current taxation
671
(15)
Current taxation - exceptional
-
(207)
Deferred taxation
1,126
143
Deferred taxation - exceptional
-
57
Income tax expense / (credit)
1,797
(22)
5. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit after income tax and
on 11,022,835 (2020: 10,996,835) 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 2021 31 December 2020
Pence per share
Basic earnings per share 37.8 1.0
Add: Exceptional items - 5.5
Adjusted basic earnings per share 37.8 6.5
Diluted earnings per ordinary share is based on the profit after income tax
and on 11,022,835 (2020: 11,028,486) ordinary shares, being the weighted
average number of ordinary shares in issue during the year of 11,022,835
(2020: 10,996,835) increased by nil (2020: 31,651) 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 share price during the year. There has been no impact of diluted
earning per share on the shares that were granted during the year. Adjusted
diluted 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 2021 31 December 2020
Pence per share
Diluted earnings per share 37.8 1.0
Add: Exceptional items - 5.5
Adjusted diluted adjusted earnings per share 37.8 6.5
6. Reconciliation of operating profit to net cash inflow from continuing
activities
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Cash flows from operating activities
Operating profit 6,122 165
Adjustments for:
Depreciation and amortisation 2,838 2,586
(Gain)/ Loss on disposal of property, plant and equipment (5) 3
Charge/ (credit) for share based payment 45 (231)
Defined benefit pension cash contribution (1,362) (749)
Pension current service charge - non cash - 40
Changes in working capital
Inventory 2,337 (1,176)
Trade and other receivables (6,396) 6,696
Trade and other payables 7,048 (5,531)
Net cash inflow from operations 10,627 1,803
7.
Dividend
The dividends paid in the year were as follows:
2021 2020
Ordinary £'000 £'000
Final dividend 2020 £nil (2020: nil) per 10p ordinary share - -
Interim 2021 6.7p (2020: nil) per 10p ordinary share paid 739 -
739 -
The Directors now recommend payment of the following dividend:
Ordinary dividend:
Final dividend 2021 17.3p (2020: nil) per 10p ordinary share 1,907 -
Dividends on treasury shares held by the Company are waived.
8. Retirement benefit obligations
The liability recognised by the Company in relation to its Defined Benefit
Pension Scheme under IAS 19 has decreased by £3,226,000 to £7,156,000 (2020:
increased by £5,039,000). This decrease is as a result of changes in market
derived assumptions in relation to the discount rate used to assess the
present value of Scheme liabilities of 1.8% (2020: 1.4%) and an increase in
forecast future CPI inflation to 2.9% (2020: 2.3%). Together with other more
minor variations in assumptions these changes have decreased liabilities by
£221,000, and increased anticipated investment returns. The Scheme was closed
to new entrants in 1999 and to future accrual in 2006.
Audited Audited
Year to Year to
31 December 2021 31 December 2020
£000 £000
Liability at 1 January (10,382) (5,343)
Past service cost - (40)
Interest cost (136) (105)
Experience gains / (losses) 45 121
Re-measurement from change in assumptions (211) (8,381)
Re-measurement of return on plan assets 2,166 2,617
Employer contributions 1,362 749
Liability at 31 December (7,156) (10,382)
9. Share buybacks
The Company did not buy back any shares during the year, but may consider
making ad hoc share buybacks going forward at the discretion of the Board and
subject to shareholder authorities being renewed at the forthcoming Annual
General Meeting.
10. Basis of preparation and accounting policies
The financial information included in the preliminary announcement for year to
31 December 2021 has been approved by the Board on 21 April 2022.
The preliminary 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 UK-adopted International Accounting Standards and with the requirements
of the Companies Act 2006 as applicable to companies reporting under those
standards.
This information has been prepared under the historical cost convention as
modified by the revaluation of land and buildings 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 preliminary financial statements as
were applied in the Group's financial statements for the year ended 31
December 2020 with the impact of transition to UK-adopted International
Accounting Standards having no impact on recognition, measurement or
disclosure in the period as a result of the change in framework.. Statutory
accounts for the year ended 31 December 2020 have been delivered to the
Registrar of Companies. Statutory accounts for the year ended 31 December 2021
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 2022. 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.
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