Stoke-on-Trent ceramics manufacturer Churchill China has reported a fall in profits as tough trading conditions continue to hit the global hospitality sector.
In its interim results for the six months to June 30, which were released yesterday (September 3), the company said revenue fell by 5.2 per cent to £38.5 million while operating profit dropped 37.8 per cent to £2.8 million.
Profit before tax was down 35.4 per cent to £3.1 million and profit after tax decreased by 36.1 per cent to £2.3 million. Basic earnings per share fell 35.9 per cent to 21.0p and the interim dividend was cut by 39.1 per cent to 7.0p per share.
Performance was said to be ‘strong’ in the USA and UK hospitality markets, but ‘weaker’ in Europe, Rest of World and the materials business, Furlong Mills, which Churchill acquired in 2019.
The company said it had seen ‘stable market share in a contracting market’ and was investing in automation ‘to negate increased labour costs in anticipation of market recovery’.
Despite underperformance against expectations earlier in the year, the board said Churchill was ‘performing well within what is currently a difficult trading environment’ and reiterated confidence in the medium-term recovery of its markets.
Chairman Robin Williams said: “Global hospitality markets remain depressed by weak consumer sentiment and rising employment costs. We believe we are maintaining share in key territories, and in the UK and USA we have performed better than the market.
“Our focus internally is on reducing our cost base without damaging core skills and on employing capital spend to bring down cost of production and enable new product launches at competitive price points.”
