TIDMCHH
RNS Number : 0371W
Churchill China PLC
13 April 2023
For immediate release 13 April 2023
CHURCHILL CHINA plc
("Churchill" or the "Company" or the "Group")
FINAL RESULTS
For the year ended 31 December 2022
Strong revenue and profit performance
Churchill China plc (AIM: CHH), the manufacturer of innovative
performance ceramic products serving hospitality markets worldwide,
is pleased to announce its Final Results for the year ended 31
December 2022.
Key Highlights:
Financial
-- Operating profit before exceptional items up 49% to GBP9.2m (2021: GBP6.1m)
-- Profit before exceptional items and tax up 52% to GBP9.1m (2021: GBP6.0m)
-- Reported profit after exceptional items before tax up 61% to GBP9.6m (2021: GBP6.0m)
-- Adjusted* basic earnings per share up 77% to 66.9p (2021: 37.8p)
-- Basic earnings per share 71.7p (2021: 37.8p)
-- Final dividend of 21.0p per share, up 21% (2021: 17.3p).
Total dividend for the year 31.5p, up 76% (2021: 24.0p)
-- Cash generated from operations GBP4.9m (2021: GBP10.6m) -
substantial investment into inventory to optimise service levels
and efficiency
-- Net cash and deposits of GBP14.7m (2021: GBP19.0m)
Business
-- Total revenues of GBP82.5m up 36% (2021: GBP60.8m)
-- Strong revenue performance
o Hospitality: +40%
o Materials: +37%
-- Successful execution of strategy with further revenue growth across key markets
-- Good demand from distributors and end users
-- Percentage margins affected by labour efficiency as anticipated, absolute margins on target
-- Manufacturing efficiency improving
-- Continued investment targeting added value product capacity,
process automation and energy efficiency
-- Significant development of Board succession plan
Outlook
-- 2023 has started well, Q1 targets met
-- Investment programme maintained
-- We look forward to delivering an improved performance in 2023.
Alan McWalter, Chairman of Churchill China, commented:
"Churchill is a resilient, adaptable business that benefits from
a clear focus on delivering outstanding performance products, value
and service to its customers and prospers as a result. We have a
clear strategy and a long term approach to business which underpins
our confidence in our future prospects."
Analyst meeting
An in-person meeting for analysts will be held at 10.00am today,
13 April 2023 at the offices of Buchanan, 107 Cheapside, London
EC2V 6DN. An online option will also be provided for analysts who
cannot attend in person. To register for the meeting, analysts
should contact Buchanan by email at churchillchina@buchanan.uk.com
or telephone 020 7466 5000.
For further information, please contact:
Churchill China plc Tel: 01782 577566
David O'Connor / James Roper
Buchanan Tel: 020 7466 5000
Mark Court / Abigail Gilchrist
ChurchillChina@buchanan.uk.com
Investec Tel: 020 7597 5970
David Flin / Alex Wright / William
Brinkley
*Adjusted basic earnings per share is calculated after adjusting
for the post tax effect of exceptional items.
CHAIRMAN'S STATEMENT
Introduction
We are pleased to report a strong performance in the year and
have more than achieved our initial targets despite considerable
external impact on both our markets and input costs. This
performance, with a 36% increase in revenue and an increase in
profit before exceptional items and tax of over 50%, reflects the
strength of our market position and product offering, our
geographic reach and diversity and the resilience of our business
model. Alongside these achievements we have continued to develop
and implement our longer term strategy, building our presence in
Hospitality export markets and investing in the future of our
business.
We continue to make good progress in growing our revenue and, as
previously reported, are addressing some of the production issues
that have adversely impacted margins as we increased manufacturing
output during the year. Demand levels remain satisfactory overall
and we have substantially improved our customer service performance
as inventory has increased, reducing the outstanding order book
towards more normal levels.
Financial Review
Total revenues rose by 36% to GBP82.5m (2021: GBP60.8m).
Revenues increased both as a result of market share gain, resulting
in increased volumes, and higher price levels implemented to help
mitigate the effect of input cost inflation during the period.
Revenue
(GBPm) 2022 2021 Change
Ceramics 75.3 55.6 35.5%
----- ----- -------
Materials 7.2 5.2 37.4%
----- ----- -------
Total 82.5 60.8 35.6%
----- ----- -------
UK 33.2 24.4 36.1%
----- ----- -------
Export 49.3 36.4 35.3%
----- ----- -------
Total 82.5 60.8 35.6%
----- ----- -------
As expected, overall gross margins remained lower than their
long term average with output and efficiency levels during the year
affected by labour availability issues, lower than optimal levels
of experience within our workforce and higher input prices for
materials and energy. Margin levels showed their normal increase in
the second half of the year and we have seen some improvement in
efficiency in the first months of 2023 as we have both reduced the
amount of short term contract labour and improved overall
manufacturing yields. We expect to make further progress in the
resolution of these issues over the medium term.
Operating profit before exceptional items rose by GBP3.1m to
GBP9.2m (2021: GBP6.1m). Overhead cost levels increased principally
as a result of further long term investment in sales and marketing,
supporting forward business development. Operating profit margins
before exceptional items rose by 1.0% to 11.1% (2021: 10.1%).
Profit before exceptional items and income tax was GBP9.1m
(2021: GBP6.0m) with the increase reflecting improved operating
profit.
Net exceptional income: We have received two amounts of
exceptional income during the year, firstly in relation to a
receipt in relation to the voluntary winding up of a ceramic
industry trade body of which the Company was a member* and a
further amount as a reduction to our rates charge covering the
initial impact of COVID in 2020. The latter sum was used to fund a
one off payment made to all our employees as cost of living
support. These amounts have been treated as exceptional given their
size and nature.
Adjusted basic earnings per share before exceptional income was
66.9p (2021: 37.8p).
Reported profit after exceptional items but before income tax
was GBP9.6m (2021: GBP6.0m).
Basic earnings per share, after exceptional items, was 71.7p
(2021: 37.8p).
Cash flows from operating activities of GBP4.9m (2021: GBP10.6m)
were lower than normally delivered, reflecting a substantial
increase in overall inventory levels of GBP5.4m to GBP15.9m. Stock
levels within the Ceramic business had been well below desirable
levels for most of 2022, adversely affecting customer service.
These have been partially rebuilt during the final quarter of the
year giving increased security to customers through improved
delivery and better production efficiencies. Inventory levels
within our Materials business also increased substantially as we
established higher safety stocks of raw materials. Levels of
receivables also increased as revenue grew, although the cash
effect of this rise was offset by higher levels of creditors.
Capital expenditure increased to GBP4.7m (2021: GBP3.7m) further
details of which are set out below. After total dividend payments
of GBP3.1m (2021: GBP0.7m), cash and deposits at 31 December 2022
were GBP14.7m (2021: GBP19.0m).
The funding position of our defined benefit pension scheme has
improved substantially over the year as a result of an increase in
discount rates applied to scheme liabilities following higher
general interest rates. The scheme's investment strategy has been
adjusted to reflect revised market conditions. The overall surplus
at the year end was GBP6.9m (2021: deficit GBP7.2m). The Company is
reviewing its forward position in relation to future scheme
funding.
Dividend
We are pleased to propose a final dividend of 21.0p per share,
giving a total dividend of 31.5p per share for the year, a 31%
increase on the 24.0p paid in relation to 2021. This dividend will
be payable on 23 June 2023 to shareholders on the register on 19
May 2023. The dividend is in line with our policy of growing
returns to shareholders and reflects our ongoing confidence in the
progress of the business.
Business
The business has performed well against its objectives for 2022.
This has been possible through a continued focus on our core
business principles of providing excellent value, outstanding
products and a high level of service to our customers.
Ceramics
Hospitality sales in the year to 31 December 2022 increased by
40% against 2021. This increase reflected higher price levels, but
importantly also higher sales volumes which rose by 23% against the
prior year.
Export development continues to be our main long term focus for
revenue growth and we have made good progress in all of our
overseas regions. The best performance was again from Europe, where
revenues rose by GBP7.7m to GBP31.5m. Progress continued to be made
in the USA (+49%) and Rest of the World markets (+64%). UK sales,
which had recovered more slowly from COVID, grew more strongly as
larger hospitality customers recovered. Sales in the UK were more
than 40% ahead of 2021.
The early part of the year saw significant energy and material
price rises alongside the existing issue of reduced labour
availability. More recently we have seen some impact from
uncertainty arising from the impact of higher costs of living in
certain markets. We were able to partially mitigate the impact of
higher costs with fair and balanced price rises reflecting the
continued value of our product and service offering to our customer
base. Whilst we increased prices twice last year we believe that
more stability in input pricing will allow a more measured approach
in 2023. The business is currently benefitting from the geographic
diversity of our market spread with continued strong growth in
export markets offsetting the effect of consumer uncertainty in the
UK. We believe that we have now begun to resolve a number of the
efficiency issues that have constrained our performance in recent
periods.
Added Value sales increased by over GBP10m during the year and
were 34% ahead of 2021, despite a lower level of new product
introductions. Good progress was made in all our major market
sectors and Europe continues to be the market reporting the highest
level of added value product sales, supporting our continued focus
on that region. We expect to increase the level of new product
launches in 2023.
In line with our strategy to prioritise the manufacture of
Hospitality products, Retail sales were lower, down 33%,. Retail
sales now represent less than 5% of our Ceramics revenues.
Materials
Furlong Mills has performed extremely well during the year
despite a number of challenges. Material and energy cost rises were
particularly evident in this business, but again these have been
largely reflected in higher price levels. The business' performance
improved following a substantial increase in demand from Churchill
and a general increase in business from the UK ceramic tableware
industry. Overall revenues rose by 54%, with the increase from
external customers being almost GBP2m (37%). The operational team
worked exceptionally hard to meet increased output requirements and
to continue to offer a leading service to their customers. As
previously noted, we have taken the decision to substantially
increase holdings of raw materials to improve supply chain security
to both Churchill and our external customer base and inventory
levels are GBP2.1m higher than the end of 2021. While this has
required substantial investment by the business, we believe it is
the right decision to support both Churchill and Furlong's external
customers.
Furlong Mills is also contributing significantly to the Group's
long term plan to reduce energy usage. We believe that substantial
gains are available from improved materials and processes and the
capability and knowledge within the Furlong business will support
the realisation of these benefits.
Operations
As previously noted, 2022 has been a testing year for our
manufacturing operations and we are pleased that they have
responded well to the challenges presented to them. The success of
our plan to secure additional sales volumes was initially supported
by higher inventory levels but as this was depleted the requirement
to expand production levels increased. Output levels rose by over
30% in the year, a substantial achievement, central to our
objective of providing the best possible service to our customers.
Labour availability and experience remained an issue through the
year leading to a number of inefficiencies and higher than
desirable unit costs.
Production levels have now stabilised and we have begun to see
some of the benefits of a number of projects and actions aimed at
improving productivity and efficiency. The numbers of temporary
staff within the business is reducing steadily and the skills and
capability of our core workforce is improving progressively as
experience levels increase and our training programme delivers
returns. As inventory levels have grown we have been able to plan
longer production runs while also improving customer service.
Finally a number of the capital projects targeting improved
productivity that were initiated last year are now beginning to
become operational. The effect of these will not be significant in
the short term, but will provide a longer term route to increased
efficiency.
Capital expenditure rose to GBP4.7m (2021: GBP3.7m) overall as
we continued to invest in equipment to support the development of
Added Value revenues and in projects improving our productivity and
energy efficiency.
Our energy hedging position continues to reduce volatility
within energy pricing. Whilst we will see some benefit from
currently lower prices earlier in 2023, the principal benefit from
this will be secured in the second half of the year. We also have a
smaller hedged position into the first months of 2024. We are
mindful of the extended impact of volatile energy pricing and will
continue to monitor market movements carefully.
Environmental, Social and Governance ('ESG')
Our approach to ESG has moved forward substantially over the
year. The senior management focus outlined in last year's report
has allowed the development of our broad strategy and the
identification of short, medium and long term actions supporting
our forward progress. As a major energy user and large employer
much of our work has focused on the Environment and Social pillars,
but we have made progress in all areas of our focus.
In relation to our energy footprint we have initiated a number
of projects which have given us a much clearer idea of how we may
move towards Net Zero over the longer term. These initiatives
should deliver benefits that will deliver steady progress towards
our sustainability objectives. Our approach is based on a
combination of improved energy efficiency in the manufacture of our
product and increased sustainable generation. Importantly we
believe that significant improvements can be made through the
reformulation of the materials we use and changes in our production
processes to allow manufacture using substantially less energy
input. We are working on a number of research and development
projects in this area utilising our own technical staff, external
experts and suppliers.
We have also implemented a number of initiatives in relation to
our workforce and our engagement with our local community. We have
always prioritised training and development of our workforce and we
have continued to invest in this area. Future plans emphasise the
improvement of our employees working environment.
We believe that our Governance procedures remain appropriate for
a business of our scale and structure but, in common with other
areas of our business, they must follow a process of continuous
improvement. A substantial amount of work has been carried out in
relation to the development and implementation of a succession plan
for the Board and senior management, a summary of this is set out
below.
People
Before addressing changes to our Board, I would first like to
thank our workforce as a whole for their contribution to this
year's performance and the long term health and vitality of our
business. As has been referred to above, we have successfully
addressed a number of difficult challenges during 2022 and continue
to deal with changing economic, trading and operational conditions.
We have faced these issues not just with a well positioned and well
invested business, but most importantly with a talented and
committed workforce who deliver a consistent and high level of
performance. The Board once again offers its thanks to all our
employees and we are extremely proud of their achievements.
In relation to the composition of our Board, we have made
significant progress over the course of the year in planning its
future development. The longer term evolution of our Board had been
given less priority in recent years as the business faced a number
of challenges from external events and it was felt that the
maintenance of an experienced senior team was in the best interests
of shareholders. However, we have implemented a number of changes
in both executive and non executive roles aimed at refreshing our
Board and increasing the level of independent oversight. As we have
previously announced David Taylor, who has been our Chief Financial
Officer for over 31 years, will leave the Board this month. As we
announced on 20 December 2022 he will be succeeded by Michael
Cunningham, who will join from Surface Transforms plc on 1 June
this year. We have appointed two new independent non executive
Directors, Robin Williams in October 2022 and Caroline Stephens in
February this year, who together with Mark Moore, bring our
complement of independent Directors to three. I also wish to
announce that I, Alan McWalter, will retire as Chairman and a
director with effect from the conclusion of the 2023 Annual General
Meeting. Robin Williams will assume the role of Chair from that
date. The Board will remain focused on the implementation of these
transitional changes.
Outlook
We delivered a strong performance in 2022, growing both revenue
and profitability despite a number of challenges. This performance
reflects not just the attractiveness of our markets but the
strength of our established position and the long term approach
that we will continue to follow. Churchill is a resilient,
adaptable business that benefits from a clear focus on delivering
outstanding performance products, value and service to its
customers and prospers as a result. We have a clear strategy and a
long term approach to business which underpins our confidence in
our future prospects.
We believe that, despite some uncertainty in selected markets,
that we are well positioned to continue to grow our revenues in
line with our established strategy. We have invested in our
European operations and continue to see good opportunities for
progress in that region alongside other export markets. The output
and efficiency issues affecting our manufacturing operations in
2022 are being addressed and we expect to demonstrate an improved
performance in this area as we move through the year. 2023 has
started well with a satisfactory level of activity across our
markets and we have met our targets in the first three months of
the year. We expect to continue to maintain our investment
programme in support of our longer term aspirations.
We look forward to delivering an improved performance in
2023.
Alan McWalter
Chairman
13 April 2023
Churchill China plc
Consolidated Income Statement
for the year ended 31 December 2022
Audited Audited
Year to Year to
31 December 31 December
2022 2021
GBP000 GBP000
Note
Revenue 1 82,528 60,839
============ ============
Operating profit before
exceptional items 9,142 6,122
Exceptional items 2 547 -
------------ ------------
Operating profit 9,689 6,122
Finance income 3 60 5
Finance costs 3 (148) (164)
------------ ------------
Profit before exceptional item
and income tax 9,054 5,963
Exceptional item 2 547 -
------------ ------------
Profit before income tax 9,601 5,963
Income tax expense 4 (1,706) (1,797)
------------ ------------
Profit for the year 7,895 4,166
============ ============
Profit for the year is
attributable to:
Owners of the Company 7,895 4,166
------------ ------------
Pence per Pence per
Share Share
Basic earnings per ordinary share 5 71.7p 37.8p
Adjusted basic earnings per ordinary
share 5 66.9p 37.8p
Churchill
China plc
Consolidated Statement of Comprehensive
Income
for the year ended 31 December 2022
Audited Audited
Year to Year to
31 December 31 December
2022 2021
GBP000 GBP000
Other comprehensive income
Items that will not be reclassified
to profit or loss:
Re-measurements of post-employment benefit
obligations net of tax 9,332 1,499
Items that may be reclassified subsequently to
profit or loss:
Impact of change in
UK tax rate on deferred
tax - 557
Currency translation
differences 58 10
------------ ------------
Other comprehensive income for the year 9,390 2,066
Profit for
the year 7,895 4,166
Total comprehensive income for the year 17,285 6,232
============ ============
Attributable
to:
Owners of the Company 17,285 6,232
------------ ------------
All the above figures relate to continuing
operations
Churchill China
plc
Consolidated Balance
Sheet
as at 31 December
2022
Audited Audited
31 December 31 December
2022 2021
GBP000 GBP000
Assets
Non Current assets
Property, plant and
equipment 23,039 21,021
Intangible assets 849 1,022
Deferred income tax
assets 132 1,842
Retirement benefit
asset 6,924 -
30,944 23,885
Current assets
Inventories 15,889 10,486
Trade and other receivables 14,380 10,877
Other financial
assets 5,057 4,005
Cash and cash equivalents 9,604 15,046
------------ ------------
44,930 40,414
------------ ------------
Total assets 75,874 64,299
============ ============
Liabilities
Current liabilities
Trade and other
payables (14,291) (12,268)
------------ ------------
Total current liabilities (14,291) (12,268)
------------ ------------
Non-current liabilities
Lease liabilities (477) (217)
Deferred income tax
liabilities (4,458) (1,975)
Retirement benefit
obligations - (7,156)
Total non-current
liabilities (4,935) (9,348)
------------ ------------
Total liabilities (19,226) (21,616)
============ ============
Net assets 56,648 42,683
============ ============
Equity attributable to owners of the
Company
Issued share capital 1,103 1,103
Share premium account 2,348 2,348
Treasury shares (431) (80)
Other reserves 1,344 1,195
Retained earnings 52,284 38,117
------------ ------------
56,648 42,683
============ ============
Churchill China plc
Consolidated Statement of Changes in Equity
as at 31 December 2022
Issued
Retained share Share Treasury Other Total
earnings capital premium shares Reserves equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
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 Statement of Changes in
Equity
as at 31 December 2022
Issued
Retained share Share Treasury Other Total
earnings capital premium shares Reserves equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January 2022 38,117 1,103 2,348 (80) 1,195 42,683
--------------------------------------- ---- ------------- -------- -------- --------- --------- --------
Comprehensive income
Profit for the period 7,895 - - - - 7,895
Other comprehensive income
Depreciation transfer - gross 12 - - - (12) -
Depreciation transfer - tax (3) - - - 3 -
Remeasurement of post-employment
benefit obligations - net of
tax 9,332 - - - - 9,332
Currency translation - - - - 58 58
--------------------------------------- ---- ------------- -------- -------- --------- --------- --------
Total comprehensive income 17,236 - - - 49 17,285
--------------------------------------- ---- ------------- -------- -------- --------- --------- --------
Transactions with owners
Dividends relating to 2022 (3,062) - - - - (3,062)
Treasury shares - - - (351) - (351)
Share based payment - - - - 100 100
Deferred tax - share based payment (7) - - - - (7)
Total transactions with owners (3,069) - - (351) 100 (3,320)
--------------------------------------- ---- ------------- -------- -------- --------- --------- --------
Balance at 31 December 2022 52,284 1,103 2,348 (431) 1,344 56,648
--------------------------------------- ---- ------------- -------- -------- --------- --------- --------
Churchill China
plc
Consolidated Cash Flow
Statement
for the year ended 31 December 2022
Audited Audited
Year to Year to
31 December 31 December
2022 2021
GBP000 GBP000
Cash flows from operating
activities
Cash generated from operations
(note 6) 4,939 10,627
Interest received 60 5
Interest paid (35) (28)
Income tax paid (991) (854)
Net cash generated from operating activities 3,973 9,750
------------ ------------
Cash flows from investing
activities
Purchases of property, plant and equipment (4,618) (3,740)
Proceeds on disposal of property, plant
and equipment 15 43
Purchases of intangible assets (86) (12)
Net purchase of other financial
assets* (1,052) (747)
Net cash used in investing
activities (5,741) (4,456)
------------ ------------
Cash flows from financing
activities
Dividends paid (3,062) (739)
Principal elements of leases (263) (247)
Purchase of treasury shares (351) -
------------ ------------
Net cash used in financing
activities* (3,676) (986)
------------ ------------
Net (decrease) / increase in cash and
cash equivalents (5,444) 4,308
Cash and cash equivalents at the beginning
of the year 15,046 10,738
Exchange gain on cash and cash equivalents 2 -
Cash and cash equivalents at the end of
the year 9,604 15,046
------------ ------------
*During the year the net purchase of other financial assets has
been reclassified to be presented as a cash flow from investing
rather than financing activity.
1. Segmental
analysis
for the year ended 31 December
2022
Audited Audited
Year to Year to
31 December 31 December
2022 2021
GBP000 GBP000
Revenue - segment
Ceramics 75,335 55,605
Materials 13,500 8,773
------------- -------------
88,835 64,378
Less: Inter segment revenue (6,307) (3,539)
------------- -------------
82,528 60,839
------------- -------------
Revenue - geographic
United Kingdom 33,244 24,424
Rest of Europe 31,888 24,241
USA 8,715 6,388
Rest of the World 8,681 5,786
82,528 60,839
------------- -------------
Operating profit before exceptional
items
Ceramics 7,932 5,628
Materials 1,210 494
9,142 6,122
------------- -------------
Exceptional items
Ceramics 484 -
Materials 63 -
547 -
------------- -------------
Operating profit after exceptional
items
Ceramics 8,416 5,628
Materials 1,273 494
9,689 6,122
Unallocated items
Finance income 60 5
Finance costs (148) (164)
Profit before income tax 9,601 5,963
------------- -------------
2. Net exceptional income
In the year ending 31 December 2022 Company treated the following
items as exceptional. Audited Audited
Year to Year to
31 December 31 December
2022 2021
GBP000 GBP000
Income
Disposal of assets 471 -
COVID Rate Relief Credit 550 -
Expenditure
Employee Cost of Living Support (415) -
Restructuring (59) -
Net exceptional income 547 -
------------- -------------
There were no exceptional items in the year ending 31 December 2021.
3. Finance income and
costs
Audited Audited
Year to Year to
31 December 31 December
2022 2021
GBP000 GBP000
Finance income
Interest income on cash and cash equivalents 60 5
Finance income 60 5
------------- ----------------
Finance cost
Interest on pension scheme (113) (136)
Interest on lease
liabilities (35) (23)
Other interest - (5)
Finance costs (148) (164)
------------- ----------------
The interest cost arising from pension schemes is
a non cash item.
4. Income tax expense
Audited Audited
Year to Year to
31 December 31 December
2022 2021
GBP000 GBP000
Current taxation 617 671
Current taxation -
exceptional 14 -
Deferred taxation 1,075 1,126
Income tax expense 1,706 1,797
------------- ----------------
5. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit after
income tax and on 11,009,068 (2021: 11,022,835) 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 31 December
2022 2021
Pence per share
Basic earnings per share 71.7 37.8
Less Exceptional items (4.8) -
Adjusted basic earnings per share 66.9 37.8
------------- -------------
6. Reconciliation of Operating profit to cash generated from operations
Audited Audited
Year to Year to
31 December
2022 31 December 2021
GBP000 GBP000
Cash flows from operating
activities
Operating profit 9,689 6,122
Adjustments for:
Depreciation and amortisation 2,983 2,838
Gain on disposal of property, plant
and equipment (4) (5)
Charge for share based
payment 100 45
Defined benefit pension cash contribution (1,750) (1,362)
Changes in working capital
Inventory (5,403) 2,337
Trade and other receivables (3,067) (6,396)
Trade and other payables 2,391 7,048
Cash generated from operations 4,939 10,627
------------ -----------------
7. Dividend
The dividends paid in the year were as follows:
2022 2021
Ordinary GBP'000 GBP'000
Final dividend 2021 17.3p (2020: nil)
per 10p ordinary share 1,907 -
Interim 2022 10.5p (2021: 6.7p) per 10p
ordinary share paid 1,155 739
---------------------------------------- ------- -------
3,062 739
---------------------------------------- ------- -------
The Directors now recommend payment of the following
dividend:
Ordinary dividend:
Final dividend 2022 21.0p (2021: 17.3p)
per 10p ordinary share 2,315 1,907
---------------------------------------- ----- -----
Dividends on treasury shares held by the Company are waived.
8. Retirement benefit obligations
The position of the Company's Defined Benefit Pension Scheme has
improved substantially in the year, moving from a deficit of
GBP7,156,000 at 31 December 2021 to a surplus of GBP6,924,000 at 31
December 2022. The Company has recognised this surplus in
accordance with international accounting standards under IAS 19 and
IFRIC 14. The principal reason for the change from deficit to
surplus was the effect of the increase in the discount rate applied
to scheme liabilities (2022: 4.9% (2021: 1.8%)) following the
general increase in interest rates, gilt and corporate bond yields
during the latter part of 2022. Since this change in interest rates
the Scheme Trustees have amended the asset holdings within the
Scheme increasing holdings of gilt investments to secure a closer
interest rate match between liabilities and assets.
Audited Audited
Year to Year to
31 December
2022 31 December 2021
GBP000 GBP000
Liability at 1 January (7,156) (10,382)
Interest cost (113) (136)
Experience (losses) / gains (3,652) 45
Re-measurement from change in
assumptions 24,714 (211)
Re-measurement of return on plan assets (8,619) 2,166
Employer contributions 1,750 1,362
Asset/ (liability) at 31 December 6,924 (7,156)
------------ -----------------
9. Share buybacks
During the year the Group re-purchased 25,000 (2021: nil) 10p
ordinary shares and re-issued nil (2021: nil) under employee share
option schemes. The Group currently holds 32,337 shares (2021:
7,337) shares in Treasury. The Company 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 2022
Annual General Meeting.
10. Basis of preparation and accounting policies
The financial information included in the preliminary
announcement for year to 31 December 2022 has been approved by the
Board on 12 April 2023.
The final 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 international accounting standards
in conformity with the requirements of the Companies Act 2006
This information has been prepared under the historical cost 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 final financial statements as were applied in the
Group's financial statements for the year ended 31 December
2021.
Statutory accounts for the year ended 31 December 2021 have been
delivered to the Registrar of Companies. 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.
Statutory accounts for the year ended 31 December 2022 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 ) in May 2023.
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END
FR GPUBPCUPWGRP
(END) Dow Jones Newswires
April 13, 2023 02:00 ET (06:00 GMT)
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