TIDMCHH
RNS Number : 2996K
Churchill China PLC
01 September 2021
For immediate release 1 September 2021
CHURCHILL CHINA plc
("Churchill" or the "Company" or the "Group")
INTERIM RESULTS
For the six months ended 30 June 2021
Recovery well established with market share gains
Churchill China plc (AIM: CHH), the manufacturer of innovative
performance ceramic products serving hospitality markets worldwide,
is pleased to announce its Interim Results for the six months ended
30 June 2021.
Key Highlights:
Financial
-- Operating profit before exceptional items GBP1.1m (2020 H1: GBP0.5m, FY2020: GBP0.9m)
-- Profit before exceptional items and tax GBP1.0m (2020 H1: GBP0.5m, FY2020: GBP0.8m)
-- Reported profit / (loss) before tax after exceptional items
GBP1.0m (2020 H1: (GBP0.4m), FY2020: GBP0.1m)
-- Adjusted basic earnings per share 4.5p (2020 H1: 3.5p, FY2020: 6.5p)
-- Basic earnings / (loss) per share 4.5p (2020 H1: (2.9p), FY2020: 1.0p)
-- Re-instated interim dividend of 6.7p per share declared July 2021 (2020 H1: nil)
-- Net cash and deposits of GBP13.4m (2020 H1: GBP16.3m FY2020: GBP14.0m)
-- Cash generated from operations GBP0.9m (2020 H1: GBP3.4m, FY2020: GBP1.8m)
o Working capital increase as revenues rebuild
Business
-- Total revenues GBP23.9m (2020 H1: GBP18.9m FY2020: GBP36.4m)
o 74% of 2019 H1 (2020 H1: 59%, FY2020: 54%)
-- Strong performance following lifting of COVID restrictions
o Group: May / June 2021 recovered to 2019 levels
o Hospitality: May / June 2021 105% of 2019
-- Continued market share gains across key markets
-- Service levels maintained
-- Further investment in UK manufacturing
-- Continued progress on implementation of strategic plans
Alan McWalter, Chairman of Churchill China, commented:
'We remain confident that we will make good progress against our
business and financial targets in both the short and long
term.'
A conference call for analysts will be held at 10.00am today 1
September 2021. Analysts who require dial-in details please contact
Buchanan at 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 5970
David Flin / Alex Wright / Ben Farrow
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report that Churchill's trading has continued to
recover strongly following the easing of COVID related market
restrictions in the UK, Europe and other export markets in the
second quarter of 2021. Our decision to maintain operational levels
when many of our markets were dormant has allowed us to secure a
swift recovery as market demand has increased.
Current trading is at levels ahead of the comparable period in
2019 and whilst market activity has not yet fully returned, we
believe we have secured further gains in market share across our
key markets in line with our long term growth objectives. Our
commitment to maintaining customer service levels led us to build
inventory during 2020 and the early part of 2021 and this has
allowed us to meet increasing order levels in the second quarter
and into the third quarter of the year. We are now raising
manufacturing output to maintain customer service in support of the
recovery in demand.
We have continued to develop and implement our forward strategy
in respect of extending export distribution and developing our
range of differentiated added value products. We have completed a
number of capital projects in support of this strategy and have
approved further expenditure to improve the efficiency and
sustainability of our business.
Financial Review
Total revenues rose by 27% to GBP23.9m (2020 H1: GBP18.9m,
FY2020: GBP36.4m). Sales in the first four months of the year were
well below the comparable periods for both 2019 and 2020 as a
result of COVID related lockdowns. However revenues have recovered
well following the relaxation of market restrictions beginning in
April and were at 2019 levels in May and June. This trend has
continued into the second half year. Ceramics revenues were
GBP21.5m (2020 H1: GBP17.0m, FY2020: GBP33.1m). External revenue
from Materials was GBP2.4m (2020 H1: GBP1.9m, FY2020: GBP3.3m). UK
revenues increased by GBP2.0m to GBP8.9m (2020 H1: GBP6.8m, FY2020:
GBP13.9m). Export revenues also improved by 25% to GBP15.0m (2020
H1: GBP12.0m, FY2020: GBP22.5m).
Overall gross margins improved on the comparable period in 2020,
but were still affected by lower sales levels in the COVID affected
first four months of the year and a consequent reduced coverage of
fixed operational costs. We expect to see some improvement in this
across the second half of the year as output levels increase.
Operating profit before exceptional items rose to GBP1.1m (2020
H1: GBP0.5m, FY2020: GBP0.9m). Overhead cost levels continued to be
carefully managed, supporting strategic developments and
maintaining our forward capability. No net furlough support was
received in H1 2021. Operating profit margins before exceptional
items were 4.4% (2020 H1: 2.6%, FY2020: 2.5%).
Profit before exceptional items and income tax was GBP1.0m (2020
H1: GBP0.5m, FY2020: GBP0.8m) with the increase entirely reflecting
improved operating profit.
The reported tax charge in the period reflects the requirement
to re-state the deferred tax charge to reflect the forthcoming
increase in Corporation Tax rates to 25%. The impact of this is an
additional charge of GBP0.3m, which, whilst material in relation to
the first half, has not been treated as exceptional. The underlying
tax rate was 19%.
Adjusted basic earnings per share before exceptional items was
4.5p (2020 H1: 3.5p, FY2020: 6.5p).
Reported profit / (loss) before tax after exceptional items was
GBP1.0m (2020 H1: (GBP0.4m), FY2020: GBP0.1m).
Basic earnings / (loss) per share, after exceptional items, was
4.5p (2020 H1 (2.9p), FY2020: 1.0p)
We have continued to generate satisfactory levels of cash,
despite a considerable requirement to rebuild working capital
levels as our markets re-opened. This was partially offset by a
reduction in inventory as we maintained our high customer service
levels. Operating cash flow remained positive at GBP0.9m (2020 H1:
GBP3.3m, FY2020: GBP1.8m). Capital expenditure at GBP1.3m (2020 H1:
GBP2.0m) was lower than historic levels with the largest spend in
relation to new building projects. We expect to increase our rate
of investment in the second half of the year with projects
targeting our energy footprint, additional value added product
capacity and improved productivity. Cash and deposits at the start
of the year were GBP14.0m and we are pleased that we still retained
GBP13.4m at the end of the period.
We continue to enjoy a strong, ungeared, balance sheet with net
assets of GBP38.2m. Our assets are largely tangible and also give
us a high degree of short term liquidity, if required.
Dividend
In our market update on 6 July 2021 we declared an interim
dividend of 6.7p (2020 H1: nil) per ordinary share, payable on 3
September 2021. This dividend reflects increased confidence in the
strength of the recovery in Hospitality markets in the UK and
overseas, the progress made by the business over the past months
and maintenance of our strong financial position. As previously
announced all CJRS support in relation to 2021 has been repaid.
The Board will continue to review its dividend policy but
expects to re-institute the progressive policy in place prior to
the emergence of COVID. Once again, the Board would like to express
its thanks for the support of shareholders.
Business
Our performance in the first half of 2021 has reflected the
impact of market restrictions on the operation of hospitality
businesses in the first four months of the year and the progressive
relaxation of restrictions in the second quarter. Early sales were
below expectations as extensive lockdowns in the UK, Europe and the
USA affected end user demand. As these restrictions were relaxed,
at first in the UK and USA, we saw a strong increase in order
levels. While European countries were slower to re-open their
markets, the trend of market recovery seen in the UK has now been
replicated. European revenues have also been supported by continued
market share growth and it is currently our best performing
regional market.
Profitability in the first four months of the year was
restricted by the impact of lower sales and disruption from the
impact of COVID on our operations. Overall manufacturing output
levels at 70% of their 2019 equivalent gave reduced coverage of
fixed costs within our operations. As sales levels have recovered
later in the period we have generated improved margins and are now
progressively increasing output towards 2019 levels to meet
customer demand.
Ceramics
Overall Hospitality sales in the six months to 30 June 2021 were
71% 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 May
and June were 6% above 2019's comparative.
Export revenues continue to provide our main focus for growth
with good progress in both Europe and the USA. We believe that we
are taking an increasing share of the available market in Europe,
supported by a strong service offering from our Rotterdam warehouse
and continued introduction of new products. We have also performed
well in the USA serviced from our warehouse in Chicago. The Rest of
the World region remains mixed with recovery in some markets offset
by continued COVID disruption in less developed countries. UK sales
have performed creditably with an early recovery in regional sales
channels being followed by increasing national account business
later in the period.
We have further increased the proportion of added value products
within our revenue with the percentage of sales attributable to our
differentiated portfolio rising to 60%. In the first half of 2019
the comparable figure was 47% demonstrating further progress
against this key target. We continue to develop and launch new
products.
Retail revenues have increased during the period as we
redirected UK production capacity on a tactical basis to secure
additional manufacturing volumes, albeit at lower margins. We
expect this business to reduce across the second half of the
year.
Materials
Furlong Mills has performed creditably during the first six
months of the year despite the continued effects of COVID on its
main hospitality focused customers. Demand from retail orientated
customers has supported a good revenue performance.
Operations
Our manufacturing and logistics operations have once again
responded to the challenges raised by COVID. Output levels in the
first half year were maintained despite disruption from the
pandemic and a significant amount of work has been completed in
support of our forward plans. We are now in the process of building
output and efficiency back towards 2019 levels to meet anticipated
demand. This has required the recruitment of over one hundred new
roles across manufacturing and logistics, together with the
associated training requirement.
Further investment has been made in projects related to the
forward development of our operations. We have completed our third
factory extension in the last eighteen months, which will allow us
to hold work in progress more efficiently, aiding flexibility and
improving efficiency. The manufacturing floor space released by
this extension will be used to install a further kiln, extending
our added value product capacity, and to allow the automation of
certain processes, raising productivity levels. We have also
invested further in solar power generation and other projects aimed
at improving sustainability.
We have continued to work on projects related to reducing our
energy usage and waste. As we have previously indicated, we believe
our product is highly sustainable once manufactured, given its
durability and long life. However we use energy in its production
and we are assessing how this may be progressively reduced. We
believe the nearest opportunity is to continue to improve our
manufacturing yields to reduce waste and we have been addressing
this for several years through capital investment, materials
development and our continuous improvement programme. There is also
a considerable opportunity to reduce our energy usage through
investment in more fuel efficient equipment and waste heat
recovery. We are working in this area both as a Company and within
industry bodies.
The challenges raised for our operations team by our strategic
plans will require further development of our workforce as a whole.
We have continued to invest in the development of our employees and
continue to supplement this with recruitment in key areas.
People
The extended impact of COVID has meant that our employees at all
levels have been required to demonstrate adaptability and
determination in the face of the regular changes in our operations
as we respond to the changing circumstances of the pandemic and
recovery. They can be extremely proud of their achievements over
the past eighteen months and we are very grateful to them.
Outlook
In our Preliminary Results announcement on 19 April 2021, we
noted the first signs of recovery in our markets as restrictions on
Hospitality began to be removed. I am pleased to report that the
increased market activity in Hospitality seen at that time has
continued to build and that the performance above 2019 levels seen
in May and June has been maintained into the second half year. It
is not yet clear to what extent Hospitality markets have fully
recovered to previous levels, but it appears that we can now be
more certain that we can maintain and improve our competitive
position in our core markets.
A central theme of our response to COVID has been that we have
endeavoured to reinforce Churchill's brand values in relation to
service, performance and a long term approach to business for the
benefit of all our stakeholders. A number of the choices made in
2020 and 2021, particularly in relation to building capability in
several areas, have proved to be sound and we are well placed to
continue to execute our long term plans in what remains a resilient
market.
It is not yet clear which course the pandemic and associated
market restrictions may take over the coming months and we have
retained both flexibility and a strong financial position in order
to be able to respond to any renewed issues. The Company continues
to trade in line with the Board's expectations and we remain
confident that we will make good progress against our business and
financial targets in both the short and long term.
Alan McWalter
Chairman
1 September 2021
Churchill China plc
Consolidated Income Statement
for the six months ended 30 June 2021
Unaudited Unaudited Audited
Six months to Six months to Twelve months to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Note
Revenue 1 23,922 18,853 36,362
=========== =========== ===========
Operating profit before exceptional
item 1 1,055 498 922
Exceptional items 2 - (869) (757)
---------------------------------------- ----- ------------------- ------------------- -------------------
Operating Profit 1 1,055 (371) 165
Finance income 3 2 56 60
Finance costs 3 (80) (67) (134)
------------------ ------------------ ------------------
-------------------------------------- ----- ------------------- ------------------- -------------------
Profit before exceptional item and
income tax 977 487 848
Exceptional items 2 - (869) (757)
--------------------------------------- ----- ------------------- ------------------- -------------------
Profit / (loss) before income tax 977 (382) 91
Income tax (expense) / credit 4 (480) 66 22
------------------ ------------------ ------------------
Profit / (loss) for the period 497 (316) 113
=========== =========== ===========
Profit / (loss) for the period is
attributable to:
Owners of the Company 497 (316) 113
=========== =========== ===========
Pence
per Pence per Pence per
Share Share Share
Adjusted earnings per
ordinary share 5 4.5 3.5 6.5
Diluted adjusted earnings
per ordinary share 5 4.5 3.5 6.5
Basic earnings / (loss)
per ordinary share 5 4.5 (2.9) 1.0
Diluted earnings / (loss)
per ordinary share 5 4.5 (2.9) 1.0
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2021
Unaudited Unaudited Audited
Six months to Six months to Twelve months to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Other comprehensive income / (expense)
Items that will not be reclassified to profit and
loss:
Actuarial (loss) / gain on retirement
benefit obligations (net) - - (4,571)
Items that may be reclassified subsequently to
profit
and loss
Impact of change in UK tax rate on
deferred tax 558 84 84
Exchange differences 2 29 (13)
--------------- -------------- ---------------
Other comprehensive income / (expense) 560 113 (4,500)
Profit / (loss) for the period 497 (316) 113
--------------- --------------- ----------------
Total comprehensive income / (expense) for
the period 1,057 (203) (4,387)
========== ========== ==========
Attributable to:
Owners of the Company 1,057 (203) (4,387)
========== ========== ==========
All above figures relate to continuing operations
Churchill China
plc
Consolidated Balance
Sheets
as at 30 June
2021
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP000 GBP000 GBP000
Assets
Non-current assets
Property, plant
and equipment 20,074 20.531 20,058
Intangible assets 1,152 1,434 1,306
Deferred income
tax assets 2,539 1,092 2,082
------------------ ----------------- ----------------------
23,765 23,057 23,446
------------------ ----------------- ----------------------
Current assets
Inventories 11,600 11,866 12,823
Trade and other
receivables 10,908 3,965 4,309
Other financial
assets 1,000 1,504 3,258
Cash and cash equivalents 12,437 14,833 10,738
------------------ ----------------- ----------------------
35,945 32,168 31,128
------------------ ----------------- ----------------------
Total assets 59,710 55,225 54,574
========== ========== =============
Liabilities
Current liabilities
Trade and other
payables (10,037) (7,130) (5,663)
Current income tax
liabilities (41) (93) (24)
----------------- ---------------- ---------------------
Total current liabilities (10,078) (7,223) (5,687)
----------------- ---------------- ---------------------
Non-current liabilities
Lease liabilities
payables (164) (250) (215)
Deferred income
tax liabilities (1,449) (1,137) (1,149)
Retirement benefit
obligations (9,812) (5,296) (10,382)
----------------- ---------------- ---------------------
Total non-current
liabilities (11,425) (6,683) (11,746)
----------------- ---------------- ---------------------
Total liabilities (21,503) (13,906) (17,433)
========== ========== =============
Net assets 38,207 41,319 37,141
========== ========== =============
Equity
Issued share capital 1,103 1,103 1,103
Share premium account 2,348 2,348 2,348
Treasury shares (80) (446) (80)
Other reserves 1,154 1,573 1,215
Retained earnings 33,682 36,741 32,555
----------------- ---------------- ---------------------
Total equity 38,207 41,319 37,141
=========== ========== =============
Churchill China plc
Consolidated Statement of Changes in Equity
as at 30 June Issued
2021
Retained share Share Treasury Other Total
earnings capital premium shares reserves Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2020 37,034 1,103 2,348 (446) 1,802 41,841
Comprehensive
income
(Loss) / profit for the period (316) - - - - (316)
Other comprehensive
income
Depreciation transfer
- gross 5 - - - (5) -
Depreciation transfer
- tax (1) - - - 1 -
Re-measurement
of retirement
benefit obligations
- net of tax 107 107
Deferred tax -
change in rate - - - - (23) (23)
Currency translation - - - - 29 29
------------------------------------- --------- -------- -------- --------- --------- --------
Total comprehensive
income (205) - - - 2 (203)
------------------------------------- --------- -------- -------- --------- --------- --------
Transactions with
owners
Share based payment - - - - (231) (231)
Deferred tax -
share based payment (88) - - - - (88)
Total transactions
with owners (88) - - - (231) (319)
------------------------------------- --------- -------- -------- --------- --------- --------
Balance at 30
June 2020 36,741 1,103 2,348 (446) 1,573 41,319
------------------------------------- --------- -------- -------- --------- --------- --------
Comprehensive
income
Profit for the period 429 - - - - 429
Other comprehensive
income
Depreciation transfer
- gross 7 - - - (7) -
Depreciation transfer
- tax (1) - - - 1 -
Re-measurement of retirement
benefit obligations - net of tax (4,571) - - - - (4,571)
Currency translation - - - - (42) (42)
------------------------------------- --------- -------- -------- --------- --------- --------
Total comprehensive income (4,136) - - - (48) (4,184)
------------------------------------- --------- -------- -------- --------- --------- --------
Transactions with owners
Proceeds of share issue - - - 4 - 4
Share based payment 310 - - - (310) -
Deferred tax - share based payment 2 - - - - 2
Treasury shares (362) - - 362 - -
Total transactions with owners (50) - - 366 (310) 6
------------------------------------- --------- -------- -------- --------- --------- --------
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 30 June 2021 Issued
Retained share Share Treasury Other Total
earnings capital premium shares reserves Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31 December 2020 32,555 1,103 2,348 (80) 1,215 37,141
Comprehensive income
Profit for the period 497 - - - - 497
Other comprehensive income
Depreciation transfer - gross 6 - - - (6) -
Depreciation transfer - tax (2) - - - 2 -
Deferred tax - change in rate 623 - - - (65) 558
Currency translation - - - - 2 2
------------------------------------- --------- -------- -------- --------- --------- -------
Total comprehensive income 1,124 - - - (67) 1,057
------------------------------------- --------- -------- -------- --------- --------- -------
Transactions with owners
Share based payment - - - - 6 6
Deferred tax - share based payment 3 - - - - 3
Total transactions with owners 3 - - - 6 9
------------------------------------- --------- -------- -------- --------- --------- -------
Balance at 30 June 2021 33,682 1,103 2,348 (80) 1,154 38,207
------------------------------------- --------- -------- -------- --------- --------- -------
Churchill China plc
Consolidated Cash Flow Statement
for the six months ended 30 June 2021
Unaudited Unaudited Audited
Six months to Six months to Twelve months to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Cash flows from operating activities
Cash generated from operations (note 6) 884 3,545 1,803
Interest received 2 56 60
Interest paid (8) (7) (29)
Income tax paid (30) (759) (847)
----------------- ----------------- ------------------
Net cash generated from operating activities 848 2,835 987
----------------- ----------------- -----------------
Investing activities
Purchases of property, plant and equipment (1,307) (2,015) (2,403)
Proceeds on disposal of property, plant and
equipment 31 8 44
Purchases of intangible assets (13) (8) (50)
----------------- ----------------- -----------------
Net cash used in investing activities (1,289) (2,015) (2,409)
----------------- ----------------- -----------------
Financing activities
Issue of ordinary shares - - 4
Principal element of finance lease payments (118) (65) (163)
Net sale / (purchase) of other financial
assets 2,258 1,503 (252)
----------------- ----------------- -----------------
Net cash generated by / (used in) financing
activities 2,140 1,438 (411)
----------------- ----------------- -----------------
Net increase / (decrease) in cash and cash
equivalents 1,699 2,258 (1,833)
Cash and cash equivalents at the beginning of the
period 10,738 12,572 12,572
Exchange gain / (loss) on cash and cash
equivalents - 3 (1)
----------------- ----------------- -----------------
Cash and cash equivalents at the end of the period 12,437 14,833 10,738
----------------- ----------------- -----------------
1. Segmental analysis
for the six months ended 30 June 2021
Unaudited Unaudited Audited
Six months Six months Twelve months
to to to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Revenue
by class
of business
Ceramics 21,461 16,985 33,092
Materials 3,966 2,901 5,453
-------------------------- ------------------------- -----------------------------------
25,427 19,886 38,545
Inter segment (1,505) (1,033) (2,183)
-------------------------- ------------------------- -----------------------------------
23,922 18,853 36,362
--------------------------- -------------------------- ------------------------------------
Revenue
by
destination
United Kingdom 8,884 6,844 13,868
Rest of
Europe 9,833 7,553 14,681
USA 2,651 2,442 4,145
Rest of
the World 2,554 2,014 3,668
-------------------------- -------------------------- -----------------------------------
23,922 18,853 36,362
--------------------------- -------------------------- ------------------------------------
1. Segmental analysis (continued)
for the six months ended 30 June 2021
Unaudited Unaudited Audited
Six months Six months Twelve months
to to to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Operating
profit
before
exceptional
items
Ceramics 825 460 1,104
Materials 230 38 (182)
-------------------------- ------------------------- -----------------------------------
1,055 498 922
--------------------------- -------------------------- ------------------------------------
Exceptional
items
Ceramics - (832) (666)
Materials - (37) (91)
-------------------------- ------------------------- -----------------------------------
- (869) (757)
--------------------------- -------------------------- ------------------------------------
Operating
profit
/ (loss)
after
exceptional
items
Ceramics 825 (372) 438
Materials 230 1 (273)
-------------------------- ------------------------- -----------------------------------
1,055 (371) 165
Unallocated
items
Finance income 2 56 60
Finance costs (80) (67) (134)
--------------------------- -------------------------- ------------------------------------
Profit / (loss)
before income
tax 977 (382) 91
--------------------------- -------------------------- ------------------------------------
2. Exceptional items
Costs associated with the restructuring of the Group's
operations during 2020 following the impact of COVID-19 were
charged to the Income Statement as an exceptional item. A related
income tax credit was provided for.
3. Finance income and costs
Unaudited Unaudited Audited
Six months to Six months to Twelve months to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Finance income
Other interest receivable 2 56 60
Finance income 2 56 60
-------------- -------------- -----------------
Finance costs
Interest paid (8) (12) (29)
Interest on pension scheme (72) (55) (105)
Finance costs (80) (67) (134)
-------------- -------------- -----------------
The interest cost arising from pension schemes is a non cash
item.
4. Income tax expense / (credit)
Unaudited Unaudited Audited
Six months to Six months to Twelve months to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Current taxation 75 (170) (222)
Deferred taxation 106 104 200
Deferred taxation - increase in rate 298 - -
Income tax expense 479 (66) (22)
-------------- -------------- -----------------
Following the announcement of the UK Government's intention to
increase Corporation Tax rates from 19% to 25% with effect from
2023, deferred tax balances have been provided for at a rate of
25%. Given the materiality of this change in relation to the Income
tax expense in the six months to 30 June 2021 it has been
identified separately above, but not treated as exceptional.
5. Earnings per ordinary share
Basic earnings / (loss) per ordinary share is based on the
profit / (loss) after taxation attributable to owners of the
Company of GBP497,000 (June 2020: loss of GBP316,000; December
2020: GBP113,000) and on 11,022,835 (June 2020: 10,986,234;
December 2020: 10,996,835) ordinary shares, being the weighted
average number of ordinary shares in issue during the period.
Adjusted earnings per ordinary share is calculated after adjusting
for the post tax effect of exceptional items (see note 2).
Unaudited Unaudited Audited
Six months Six months Twelve months
to to to
30 June 30 June 31 December
2021 2020 2020
Pence per Pence Pence per
share per share share
Basic earnings / (loss)
per share 4.5 (2.9) 1.0
Add exceptional items - 6.4 5.5
----------- ----------- --------------
Adjusted earnings per share 4.5 3.5 6.5
----------- ----------- --------------
Diluted basic earnings / (loss) per ordinary share is based on
the profit / (loss) after taxation attributable to owners of the
Company of GBP497,000 (June 2020: loss of GBP316,000; December
2020: GBP113,000) and on 11,099,293 (June 2020: 11,089,136;
December 2020: 11,028,486) ordinary shares, being the weighted
average number of ordinary shares in issue during the period of
11,022,835 (June 2020: 10,986,234; December 2020: 10,996,835)
increased by 76,458 (June 2020: 102,902; December 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 price during the
period. Diluted adjusted earnings per ordinary share is calculated
after adjusting for the post tax effect of exceptional items (see
note 2).
Unaudited Unaudited Audited
Six months Six months Twelve months
to to to
30 June 30 June 31 December
2021 2020 2020
Pence per Pence Pence per
share per share share
Diluted basic earnings
/ (loss) per share 4.5 (2.9) 1.0
Add exceptional items - 6.4 5.5
----------- ----------- --------------
Diluted adjusted earnings per share 4.5 3.5 6.5
----------- ----------- --------------
6. Reconciliation of operating profit to net cash inflow from
continuing activities
Unaudited Unaudited Audited
Six months to Six months to Twelve months to
30 June 2021 30 June 2020 31 December 2020
GBP000 GBP000 GBP000
Cash flow from operations
Operating profit / (loss) 1,055 (371) 165
Adjustments for
Depreciation and amortisation 1,464 1,289 2,586
Profit on disposal of property, plant and equipment (2) (8) 3
Charge / (credit) for share based payment 6 (231) (231)
Decrease in retirement benefit obligations (642) (107) (749)
Pension past service charge - non cash - - 40
Changes in working capital
Inventory 1,223 (219) (1,176)
Trade and other receivables (6,597) 7,025 6,696
Trade and other payables 4,377 (3,833) (5,531)
Cash inflow from operations 884 3,545 1,803
-------------- -------------- -----------------
7. Basis of preparation and accounting policies
The financial information included in the interim results
announcement for the six months to 30 June 2021 was approved by the
Board on 31 August 2021.
The interim financial information for the six months to 30 June
2021 has not been audited or reviewed and does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The Company's statutory accounts for the year
ended 31 December 2020, prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006.
The interim financial statements have 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 interim financial statements as
were applied in the Group's last audited financial statements for
the year ended 31 December 2020.
Statutory accounts for the year ended 31 December 2020 have been
delivered to the Registrar of Companies.
8. Share buybacks
The Company did not buy back any ordinary shares during the
first six months of the year, but 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 2021 Annual
General Meeting.
The half-yearly report and this announcement will be available
shortly on the Company's website www.churchill1795.com
, the news service of the London Stock Exchange. RNS is approved by
the Financial Conduct Authority to act as a Primary Information
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END
IR VFLFXFVLXBBX
(END) Dow Jones Newswires
September 01, 2021 02:00 ET (06:00 GMT)
Churchill China (LSE:CHH)
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