News blog
Churchill China
- BY: Andrew Hore |
- POSTED: 07/09/2008 |
Churchill China reported a fall in interim profits.
Churchill had warned that this year’s figures wouldn’t live up to the 2007 figures which included a bumper contribution from the hospitality business, which supplies plates and cups to hotels and restaurants.
Sales to new customers were lower but replacement business held up. Overall group sales were lower and the hospitality division made a much small contribution to profit. The retail side made a much larger positive contribution to profits even though revenues fell. The products sold via retail outlets are all made overseas and this has helped margins.
Churchill’s overall profit fell from £1.4m to £1.2m. It still increased the dividend from 4.5p to 4.8p a share. Full year profits are likely to fall from £3.9m to £3.7m.
The balance sheet remains strong even though there was a cash outflow due to investment in centralising manufacturing and higher stocks. Net cash fell from £11.4m to £8.4m. There will be further investment in the new warehouse so the cash pile is likely to fall again in the second half.
Longer-term Russia is seen as a strong potential market for the hospitality business.
At 220p a share, Churchill is valued at £24m. The company’s net asset value is £29.5m.
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