CHURCHILL CHINA plc
(“Churchill China” or the “Company”)
FULL YEAR TRADING UPDATE
Churchill China plc (AIM: CHH), the manufacturer of innovative performance ceramic products serving hospitality markets worldwide, announces the following trading update for the year ended 31 December 2021.
The Board expects to meet market expectations* for profit before taxation for the year ended 31 December 2021. Churchill has continued to address the issues set by the COVID pandemic whilst maintaining our focus on securing long term market share gains. We have exceeded our earlier revenue estimates but have experienced higher production cost levels as we have quickly scaled output to meet demand and cost inflation has risen.
Revenue has continued to grow strongly and H2 sales, particularly in Hospitality, have shown growth against 2019 comparatives. Order levels have been high as overall supply into the market from our competitors has remained constrained. We have chosen to meet this demand given our objective to support our customers in a replacement orientated sector. We have performed particularly well in Europe where sales have exceeded 2019 levels across the year as a whole. Our market leading position has allowed us to bring forward our normal price rise and implement a higher than normal increase to offset some of the effects of higher cost inflation.
The necessity to scale production quickly in order to meet this increased demand has created additional pressure on our operations alongside cost inflation, leading to some inefficiencies within our manufacturing unit. We expect these effects to continue into 2022, but to show progressive improvement over the year as a whole. We believe that profitability in 2022 will show further substantial growth on 2021's outfall.
We have also accelerated our investment plans to reflect the need to reduce energy costs and to improve productivity. Our financial position remains robust and cash and deposit levels have increased from the half year position.
The current business environment has created both opportunities and challenges, we remain clear that we will continue to make progress against our strategic objectives across 2022. Churchill is a resilient business with a model that emphasises the long term in respect of both customer service and the creation of shareholder value.
The Company intends to announce its Preliminary Results for the year ended 31 December 2021 in April this year.
* Company compiled consensus market expectations for profit before taxation for the financial year to 31 December 2021 is £5.6m.