TIDMCHH
RNS Number : 1507J
Churchill China PLC
25 March 2010
+--------------------------------+------------------------------------+
| For Immediate Release | 25 March 2010 |
+--------------------------------+------------------------------------+
PRELIMINARY RESULTS
for the year ended 31 December 2009
Churchill China plc, the manufacturer and global distributor of ceramic
tableware and household goods to the hospitality and retail markets, is pleased
to announce its preliminary results for the year ended 31 December 2009.
Key Points:
Ø Group turnover GBP41.7m (2008: GBP42.0m)
Ø Operating profit GBP2.3m (2008: GBP2.8m)
Ø Profit before tax GBP2.1m (2008: GBP3.4m)
Ø Basic earnings per share including exceptional items 14.3p (2008: 13.8p)
Ø Adjusted earnings per share before exceptional items 14.3p (2008: 22.2p)
Ø Year end net cash GBP6.9m (2008: GBP7.7m)
Ø Acceleration of final dividend payment to March at 9.2p per ordinary share
(2008: 9.2p)
Ø Compound return in excess of 11% per annum delivered to shareholders over last
5 years
Jonathan Sparey, Chairman said:
"2009 was an unpredictable year characterised by global recession, uneven
demand, a weakening UK currency and very challenging operating conditions. In
the circumstances, we demonstrated the resilience of the Churchill business.
Our Group revenues were flat against last year but pre-tax profit of GBP2.1m was
lower largely due to the impact of reduced interest received on our c. GBP7m
cash balance. The second half showed a pronounced improvement in operating
profitability and this positive trend is continuing."
For further information, please contact:
+----------------------------------------+----------------------------+
| Churchill China plc | Today on: 020 7466 5000 |
+----------------------------------------+----------------------------+
| Andrew Roper/David Taylor | thereafter on: 01782 |
| | 577566 |
+----------------------------------------+----------------------------+
| | |
+----------------------------------------+----------------------------+
| Buchanan Communications | Tel No: 020 7466 5000 |
+----------------------------------------+----------------------------+
| Tim Anderson/Lisa Baderoon/Stasa | |
| Filiplic | |
+----------------------------------------+----------------------------+
| | |
+----------------------------------------+----------------------------+
| Brewin Dolphin Investment Banking | Tel No: 0845 213 4730 |
+----------------------------------------+----------------------------+
| Andrew Emmott | |
+----------------------------------------+----------------------------+
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report a solid performance for Churchill China in 2009,
achieving the key objectives we set out at the beginning of the year. These
included a sustained level of investment, reduction in stock levels, tight
working capital management and preservation of a strong balance sheet with good
cash position.
2009 was an unpredictable year characterised by global recession, uneven demand,
a weakening UK currency and very challenging operating conditions. In the
circumstances, we demonstrated the resilience of the Churchill business. Our
Group revenues were flat against last year but pre-tax profit of GBP2.1m was
lower largely due to the impact of reduced interest received on our c. GBP7m
cash balance. The second half showed a pronounced improvement in operating
profitability and this positive trend is continuing.
FINANCIAL REVIEW
Group revenues fell by 0.6% to GBP41.7m (2008: GBP42.0m) reflecting lower demand
in many of our export markets largely offset by good sales levels in the UK in
both hospitality and retail markets.
Group operating profit was GBP2.3m (2008: GBP2.8m) and our pre-tax profit was
39% lower at GBP2.1m (2008: GBP3.4m).
Overall margins were lower than the corresponding period in 2008, reflecting a
strategic decision to adjust output to reduce inventory levels in a period of
lower demand. We recognised that this would lead to a less than optimal
manufacturing position in 2009 but will give us increased operational
flexibility in 2010.
Last year our results benefited from GBP0.6m of net interest receipts. In 2009
this figure fell substantially to a net cost of GBP0.2m, an adverse effect on
profit before tax of GBP0.8m. Cash interest receipts were reduced at GBP0.1m
(2008: GBP0.4m) as rates remained low. Additionally a significant notional
charge of GBP0.3m (2008: credit GBP0.2m) arose from our pension fund as higher
discount rates in 2008 reversed. We currently expect this latter effect to be
mitigated in 2010.
Adjusted earnings per share decreased by 36% to 14.3p (2008: 22.2p) whilst basic
earnings per share including exceptional items, were 14.3p (2008: 13.8p).
We continued to show good cash generation from operations, especially in the
second half. Cash balances remain strong at GBP6.9m (2008: GBP7.7m) reflecting
excellent management of working capital, particularly inventories which were
reduced from GBP8.5m in 2008 to GBP7.1m. We incurred capital expenditure of
GBP2.4m (2008: GBP4.6m) as we completed our major new warehouse project and
continued to invest selectively in our UK manufacturing base to improve
efficiency.
PENSION FUND
In common with most other UK companies the deficit on the Churchill China final
salary scheme has widened from GBP2.1m to GBP7.7m attributable to an unusual
combination of factors: depressed economic conditions, the impact of
quantitative easing on discount rates and increasing inflation expectations.
Churchill increased its annual cash payments to GBP0.5m from GBP0.2m and can
make further payments given our balance sheet strength should this be required.
We view the 2009 outcome as anomalous and expect the deficit to reduce during
2010 but the position will be reviewed further later this year.
DIVIDEND AND SHAREHOLDER RETURN
We again delivered a respectable performance in a demanding year and the Board
decided to accelerate payment of the final dividend of 9.2p per share (2008:
9.2p) from May to March to preserve net value to shareholders. The Directors
recommend no further dividend in respect of 2009 leaving the total paid for the
year unchanged at 14.0p per share.
Churchill's share price increased by 47% during 2009, which coupled with our
maintained dividend, delivered strong returns to shareholders. We have continued
to target long term shareholder return and are pleased that we have delivered a
compound return to shareholders in excess of 11% per annum over the last five
years.
OPERATIONAL REVIEW
HOSPITALITY
After a mixed performance in the first half of 2009, our hospitality business
made a good recovery in the second half with sales up 6% on the second half of
last year, leaving overall sales for the full year down 2% at GBP24.6m (2008:
GBP25.0m).
Despite relatively weak demand from consumers eating out, our UK hospitality
revenues were up slightly, as we worked hard to gain market share and maintained
our position as the clear market leader in the UK. The British consumer has
become more selective and price conscious when dining out and this has been
reflected in substantial variations in activity in restaurants and pubs. There
is firm evidence of promotional activity and it is pleasing to note that after a
period of destocking there is now clear willingness by our end customers, both
independents and chains, to refurbish premises, refresh menus and create new
themes to attract consumers.
Export sales at GBP8.2m (2008: GBP8.7m) reflected a weaker performance from
Europe in general and Spain and Eire in particular, where we experienced
difficult trading conditions. This was offset to some extent by a resilient
North American performance and good activity levels in smaller export markets,
notably Russia and the Middle East. We have increased the quality and coverage
of our export sales staff and anticipate some recovery in 2010.
Demand strengthened noticeably in the last quarter of 2009 and this has
continued. We have focused on key distributor and end user relationships and
this effort will be sustained in 2010.
The net contribution to Group was down GBP0.4m at GBP3.3m as margins were
affected adversely by lower production efficiencies arising from reduced
volumes.
Our hospitality product ranges deliver superior performance and Churchill is
determined to build upon its reputation for innovative new product development
and the ability to invest in fresh concepts whilst enjoying high levels of
recurring replacement revenues from regular hospitality customers. The bulk of
our sales are generated from Churchill Supervit and Alchemy Fine China; the key
features and benefits of these UK manufactured ranges being unrivalled product
performance and service. We have introduced new stoneware and porcelain ranges
to enable our sales team to meet end user demand for a different look or
performance criteria. We are also delighted to be working with Riedel on the
distribution of their fine glassware to the upper end of the hotel and
restaurant sector.
RETAIL
Sales to our retail customers were marginally higher at GBP17.1m (2008:
GBP17.0m). This performance reflected good progress in our strategy to build
sales in middle market accounts whilst managing the transition from volume
channel business. We increased sales in both department stores and independent
retailers by almost 50% in 2009 through the provision of impressive array of
branded and licensed new products. The Jamie Oliver, Cath Kidston, Disney, Alex
Clark, Sanderson, Ella Doran and other licences are key to our success in both
the middle market and high volume sectors. We continue to invest in the
development of our business to optimise our performance over the long term.
Sales to our promotional customers slowed in the second half after a strong
first half performance.
The UK, North America and Australasia all performed well but export sales to
Europe were disappointing reflecting weak consumer demand.
The net contribution to Group was stable at GBP1.7m (2008: GBP1.7m) as margins
were supported by growth in middle market business despite price pressure in
volume channels. We continue to invest in support of profitable opportunities
across the market and expect further progress in the distribution of our
licensed product ranges to the independent sector although this will be offset
by competitive pricing pressure in the volume sector.
MANUFACTURING, SOURCING AND LOGISTICS
With the prevailing economic climate it was important to continue to implement
cost reduction and manufacturing initiatives but it was challenging to optimise
production levels. For the majority of 2009, our UK factory was operating at
well below optimum capacity and the manufacturing team were working under strict
guidelines to ensure that working capital requirements and inventory levels were
not exceeded. These objectives were successfully realised.
Our new GBP4m distribution centre became fully operational in June 2009,
ensuring all our UK operations are now consolidated on our freehold site in
Stoke on Trent, eliminating the requirement for inter-site transport and extra
warehousing which had incurred costs in 2008.
We remain committed to maintaining and improving our UK technical ceramic
expertise whilst driving down costs The next stage of this plan is a
significant investment in a new energy efficient "once fire" kiln with robotic
product handling devices. The installation of this equipment will be completed
in the middle of 2010. For our sourcing operations, we continue to support our
manufacturing partners (mainly in Asia) with direct support on ceramic quality,
ethical standards, delivery and packaging matters from both from the UK and our
Shanghai office.
PEOPLE
I have commented before that Churchill is very fortunate to have a dedicated
work force and a strong skill base. I believe that there is an excellent team
spirit and a tangible will to "get things done" at Churchill. We are fortunate
to not only have the capacity to retain our existing skills and talent, but also
the ability to attract well qualified graduates and more experienced senior
staff to the business and this team is key to our continuing success.
Rodney Kettel retires this year after eleven years as a Non-Executive Director
and before that for several years as Churchill's appointed auditor. Rodney's
contribution has been invaluable on many dimensions and we wish him well for the
future.
PROSPECTS
We have started the new year relatively well and have reason to expect an
improvement in our overall performance in 2010, particularly given recent
evidence of enhanced demand in our Hospitality business. Demand for our
Hospitality products has been firm and we are confident that our strategy of
targeted new product development will deliver sales growth.
In our Retail business, volume channel sales are well behind the corresponding
period in 2009 but we expect our increased sales to independents and department
stores will more than compensate with improved returns over the year as a whole.
Overall, Churchill is well positioned to respond to changes in the market place,
however the strength of our recovery will be influence by continued economic
improvement. We have maintained our investment in the business in both revenue
and capital terms for the long term benefit of shareholders and have
demonstrated the strength of the Churchill business through a difficult period.
We are confident in our ability to deliver future growth.
Jonathan Sparey
Chairman
24 March 2010
Churchill China plc
Consolidated Income Statement
for the year ended 31 December 2009
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | Audited Year to | | Audited Year to |
+------------------+------+--------------------------+----------+-------------------------------------+
| | | 31 December 2009 | | 31 December 2008 |
+------------------+------+--------------------------+----------+-------------------------------------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | Before | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | Exceptional | Exceptional | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | Total | | items | Items | Total |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | Note | | | GBP000 | | GBP000 | GBP000 | GBP000 |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Revenue | | | | 41,705 | | 41,969 | - | 41,969 |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Operating profit | 2 | | | 2,288 | | 2,804 | - | 2,804 |
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Share of results | | | | (18) | | (71) | - | (71) |
| of associated | | | | | | | | |
| company | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Finance income | 4 | | | 119 | | 658 | - | 658 |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Finance cost | | | | (320) | | (29) | - | (29) |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Profit before | | | | 2,069 | | 3,362 | - | 3,362 |
| income tax | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Income tax | 5 | | | (513) | | (938) | (919) | (1,857) |
| expense | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Profit for the | | | | 1,556 | | 2,424 | (919) | 1,505 |
| year | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Attributable to: | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Equity holders | | | | 1,556 | | 2,424 | (919) | 1,505 |
| of the Company | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | Pence | | | | Pence |
| | | | | per | | | | per |
| | | | | share | | | | share |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Basic earnings | 6 | | | 14.3p | | | | 13.8p |
| per ordinary | | | | | | | | |
| share | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Diluted basic | 6 | | | 14.2p | | | | 13.7p |
| earnings per | | | | | | | | |
| ordinary share | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| Adjusted earnings per share figures excluding the effect of exceptional | |
| items are shown in notes 3 & 5 | |
+-------------------------------------------------------------------------------------------+---------+
| | | | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
| All the above figures relate | | | | | | |
| to continuing operations | | | | | | |
+------------------+------+--------+--------+--------+----------+-------------+-------------+---------+
Churchill China plc
Consolidated Statement of Comprehensive Income for the year ended 31 December
2009
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | Audited Year to | | Audited Year to |
+------------------+---------------------------+----------+---------------------------+
| | December 2009 | | December 2008 |
+------------------+---------------------------+----------+---------------------------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | Total | | | | Total |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | GBP000 | | | | GBP000 |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Net of tax | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Actuarial loss | | | (4,136) | | | | (1,022) |
| on retirement | | | | | | | |
| benefit | | | | | | | |
| obligations | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Exchange | | | (14) | | | | 43 |
| differences | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Other | | | 2 | | | | - |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Net loss | | | (4,148) | | | | (979) |
| recognised | | | | | | | |
| directly in | | | | | | | |
| equity | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Profit for the | | | 1,556 | | | | 1,505 |
| year | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Total | | | (2,592) | | | | 526 |
| comprehensive | | | | | | | |
| (expense) / | | | | | | | |
| income for the | | | | | | | |
| year | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Attributable to: | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
| Equity holders | | | (2,592) | | | | 526 |
| of the Company | | | | | | | |
+------------------+--------+--------+---------+----------+--------+--------+---------+
Churchill China plc
Consolidated Balance Sheets
As at 31 December 2009
+------------------------------------------------------+----------+----------+
| | Audited | Audited |
+------------------------------------------------------+----------+----------+
| | 31 | 31 |
| | December | December |
+------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+------------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Assets | | |
+------------------------------------------------------+----------+----------+
| Non Current Assets | | |
+------------------------------------------------------+----------+----------+
| Property, plant and equipment | 14,299 | 13,889 |
+------------------------------------------------------+----------+----------+
| Intangible assets | 498 | 397 |
+------------------------------------------------------+----------+----------+
| Investment in associates | 725 | 743 |
+------------------------------------------------------+----------+----------+
| Deferred income tax assets | 2,163 | 586 |
+------------------------------------------------------+----------+----------+
| | 17,685 | 15,615 |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Current Assets | | |
+------------------------------------------------------+----------+----------+
| Inventories | 7,142 | 8,477 |
+------------------------------------------------------+----------+----------+
| Trade and other receivables | 9,031 | 8,631 |
+------------------------------------------------------+----------+----------+
| Cash and cash equivalents | 6,882 | 7,738 |
+------------------------------------------------------+----------+----------+
| | 23,055 | 24,846 |
+------------------------------------------------------+----------+----------+
| Assets classified as held for sale | 662 | - |
+------------------------------------------------------+----------+----------+
| | 23,717 | 24,846 |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Total Assets | 41,402 | 40,461 |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Liabilities | | |
+------------------------------------------------------+----------+----------+
| Current liabilities | | |
+------------------------------------------------------+----------+----------+
| Trade and other payables | (6,907) | (7,466) |
+------------------------------------------------------+----------+----------+
| Current income tax liabilities | (574) | (689) |
+------------------------------------------------------+----------+----------+
| | (7,481) | (8,155) |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Non current liabilities | | |
+------------------------------------------------------+----------+----------+
| Deferred income tax liabilities | (1,676) | (1,640) |
+------------------------------------------------------+----------+----------+
| Retirement benefit obligations | (7,709) | (2,055) |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Total non current liabilities | (9,385) | (3,695) |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Total liabilities | (16,866) | (11,850) |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Net Assets | 24,536 | 28,611 |
+------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------+----------+----------+
| Capital and reserves attributable to equity holders | | |
| of the Company | | |
+------------------------------------------------------+----------+----------+
| Issued share capital | 1,095 | 1,095 |
+------------------------------------------------------+----------+----------+
| Share premium account | 2,332 | 2,332 |
+------------------------------------------------------+----------+----------+
| Treasury shares | (117) | (138) |
+------------------------------------------------------+----------+----------+
| Other reserves | 1,234 | 1,236 |
+------------------------------------------------------+----------+----------+
| Retained earnings | 19,992 | 24,086 |
+------------------------------------------------------+----------+----------+
| | 24,536 | 28,611 |
+------------------------------------------------------+----------+----------+
Churchill China plc
Consolidated statement of changes in equity
for the year ended 31 December
2009
+------------------------+----------+---------+---------+----------+------------------------+---------+
| | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| | Retained | Share | Share | Treasury | Other | Total |
| | earnings | capital | premium | shares | | |
+ + + + + +------------------------+ +
| | | | | | reserves | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Balance at 1 January | 25,124 | 1,095 | 2,332 | - | 1,180 | 29,731 |
| 2008 | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Comprehensive Income: | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Profit for the year | 1,505 | - | - | - | - | 1,505 |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Other comprehensive | | | | | | |
| income: | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Depreciation transfer | 12 | - | - | - | (12) | - |
| - gross | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Depreciation transfer | (2) | - | - | - | 2 | - |
| - tax | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Actuarial losses - net | (1,022) | - | - | - | - | (1,022) |
| of tax | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Currency translation | - | - | - | - | 43 | 43 |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Total comprehensive | 493 | - | - | - | 33 | 526 |
| income | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Transactions with | | | | | | |
| owners | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Dividends relating to | (1,531) | - | - | - | - | (1,531) |
| 2007 and 2008 | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Share based payment | - | - | - | - | 23 | 23 |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Treasury shares | - | - | - | (138) | - | (138) |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Total transactions | (1,531) | - | - | (138) | 23 | (1,646) |
| with owners | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Balance at 1 January | 24,086 | 1,095 | 2,332 | (138) | 1,236 | 28,611 |
| 2009 | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Comprehensive Income: | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Profit for the year | 1,556 | - | - | - | | 1,556 |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Other comprehensive | | | | | | |
| income: | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Depreciation transfer | 12 | - | - | - | (12) | - |
| - gross | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Depreciation transfer | - | - | - | - | 2 | 2 |
| - tax | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Actuarial losses- net | (4,136) | - | - | - | | (4,136) |
| of tax | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Currency translation | - | - | - | - | (14) | (14) |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Total comprehensive | (2,568) | - | - | - | (24) | (2,592) |
| income | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Transactions with | | | | | | |
| owners | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Dividends relating to | (1,526) | - | - | - | - | (1,526) |
| 2008 and 2009 | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Share based payment | - | - | - | - | 22 | 22 |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Treasury shares | - | - | - | 21 | - | 21 |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Total transactions | (1,526) | - | - | 21 | 22 | (1,483) |
| with owners | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
| Balance at 31 December | 19,992 | 1,095 | 2,332 | (117) | 1,234 | 24,536 |
| 2009 | | | | | | |
+------------------------+----------+---------+---------+----------+------------------------+---------+
Churchill China plc
Cash Flow Statement
for the year ended 31 December 2009
+----------------------------------------+------+------+----------+----------+
| | | | Audited | Audited |
+----------------------------------------+------+------+----------+----------+
| | | | Year to | Year to |
+----------------------------------------+------+------+----------+----------+
| | | | December | December |
+----------------------------------------+------+------+----------+----------+
| | | | 2009 | 2008 |
+----------------------------------------+------+------+----------+----------+
| Cash flow from operating activities | Note | | GBP000 | GBP000 |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Cash generated from operations | 7 | | 3,439 | 2,502 |
+----------------------------------------+------+------+----------+----------+
| Interest received | | | 119 | 444 |
+----------------------------------------+------+------+----------+----------+
| Interest paid | | | - | (29) |
+----------------------------------------+------+------+----------+----------+
| Income tax paid | | | (559) | (483) |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Net cash from operating activities | | | 2,999 | 2,434 |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Investing activities | | | | |
+----------------------------------------+------+------+----------+----------+
| Purchases of property, plant and | | | (2,196) | (4,199) |
| equipment | | | | |
+----------------------------------------+------+------+----------+----------+
| Proceeds on disposal of property, | | | 42 | 107 |
| plant and equipment | | | | |
+----------------------------------------+------+------+----------+----------+
| Purchases of intangible assets | | | (194) | (382) |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Net cash used in Investing activities | | | (2,348) | (4,474) |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Financing activities | | | | |
+----------------------------------------+------+------+----------+----------+
| Issue of ordinary shares | | | 21 | 22 |
+----------------------------------------+------+------+----------+----------+
| Purchase of treasury shares | | | - | (160) |
+----------------------------------------+------+------+----------+----------+
| Dividends paid | | | (1,526) | (1,531) |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Net cash used in financing activities | | | (1,505) | (1,669) |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Net decrease in cash and cash | | | (854) | (3,709) |
| equivalents | | | | |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Cash and cash equivalents at the | | | 7,738 | 11,440 |
| beginning of the year | | | | |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Exchange (losses) / gains on cash and | | | (2) | 7 |
| cash equivalents | | | | |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
| Cash and cash equivalents at the end | | | 6,882 | 7,738 |
| of the year | | | | |
+----------------------------------------+------+------+----------+----------+
| | | | | |
+----------------------------------------+------+------+----------+----------+
1. Basis of preparation
The Group's financial information for the period 31 December 2009 have been
audited and an unqualified audit report has been issued. The preliminary
financial statements represent extracts from those audited accounts, but do not
constitute statutory accounts within the meaning of Section 434 on the Companies
Act 2006.
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted for use in the European
Union (IFRSs as adopted by the EU), IFRIC interpretations and the Companies Acts
1985/2006 applicable to companies reporting under IFRS. The consolidated
financial statements have been prepared under the historical cost convention, as
modified by the revaluation of land and buildings, available for sale financial
assets and financial liabilities (including derivative instruments) at fair
value through profit or loss.
The preliminary financial statements for the year to 31 December 2009 have been
prepared in accordance with the accounting policies stated in the Group's
financial statements for the year ended December 2008.
2. Segmental analysis
for the year ended 31 December 2009
+--------------------------------------+-------------+--------+-------------+---------+
| | Hospitality | Retail | Unallocated | Total |
+--------------------------------------+-------------+--------+-------------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------+-------------+--------+-------------+---------+
| 2009 | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Revenue from external customers | 24,554 | 17,151 | - | 41,705 |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Contribution to group overheads | 4,183 | 1,911 | (2,410) | 3,684 |
| excluding depreciation | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Depreciation | (894) | (185) | (317) | (1,396) |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Operating profit | 3,289 | 1,726 | (2,727) | 2,288 |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Share of results of associated | | | (18) | (18) |
| company | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Finance income | | | 119 | 119 |
+--------------------------------------+-------------+--------+-------------+---------+
| Finance cost | | | (320) | (320) |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | 2,069 |
+--------------------------------------+-------------+--------+-------------+---------+
| Profit before income tax | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Income tax expense | | | | (513) |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Profit for the period | | | | 1,556 |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| 2008 | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Revenue | 24,952 | 17,017 | - | 41,969 |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Contribution to group overheads | 4,318 | 1,948 | (2,392) | 3,874 |
| excluding depreciation | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Depreciation | (650) | (239) | (181) | (1,070) |
+--------------------------------------+-------------+--------+-------------+---------+
| | 3,668 | 1,709 | (2,573) | 2,804 |
+--------------------------------------+-------------+--------+-------------+---------+
| Operating profit | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Share of results of associate | | | (71) | (71) |
| company | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Finance income | | | 658 | 658 |
+--------------------------------------+-------------+--------+-------------+---------+
| Finance cost | | | (29) | (29) |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | 3,362 |
+--------------------------------------+-------------+--------+-------------+---------+
| Profit before income tax | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Income tax expense | | | | (1,857) |
+--------------------------------------+-------------+--------+-------------+---------+
| | | | | |
+--------------------------------------+-------------+--------+-------------+---------+
| Profit for the period | | | | 1,505 |
+--------------------------------------+-------------+--------+-------------+---------+
3. Exceptional Items
As stated in the Group's accounting policies the Directors regard certain
material items as exceptional. The analysis of exceptional items is as follows:
+----------------------------------------------------+----------+----------+
| | Audited | Audited |
+----------------------------------------------------+----------+----------+
| | Year to | Year to |
+----------------------------------------------------+----------+----------+
| | December | December |
+----------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Deferred tax | - | 919 |
+----------------------------------------------------+----------+----------+
| Origination of temporary differences | - | 919 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
See note 5 Income tax expense
4. Finance (cost) / income
+----------------------------------------------------+----------+----------+
| | Audited | Audited |
+----------------------------------------------------+----------+----------+
| | Year to | Year to |
+----------------------------------------------------+----------+----------+
| | December | December |
+----------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Interest on cash and cash equivalents | 119 | 444 |
+----------------------------------------------------+----------+----------+
| Interest on pension scheme | - | 214 |
+----------------------------------------------------+----------+----------+
| Finance income | 119 | 658 |
| | | |
+----------------------------------------------------+----------+----------+
| Interest on pension scheme | (320) | - |
+----------------------------------------------------+----------+----------+
| Other interest | - | (29) |
+----------------------------------------------------+----------+----------+
| Finance cost | (320) | (29) |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Net finance (cost)/ income | (201) | 629 |
+----------------------------------------------------+----------+----------+
5. Income tax expense
+----------------------------------------------------+----------+----------+
| | Audited | Audited |
+----------------------------------------------------+----------+----------+
| | Year to | Year to |
+----------------------------------------------------+----------+----------+
| | December | December |
+----------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Current taxation - current year | 589 | 789 |
| - adjustment in respect | (145) | (109) |
| of prior years | | |
+----------------------------------------------------+----------+----------+
| | 444 | 680 |
| | | |
+----------------------------------------------------+----------+----------+
| Deferred taxation | 69 | 258 |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Income tax expense before exceptional items | 513 | 938 |
+----------------------------------------------------+----------+----------+
| Deferred taxation - exceptional | - | 919 |
+----------------------------------------------------+----------+----------+
| Income tax expense | 513 | 1,857 |
+----------------------------------------------------+----------+----------+
During 2008, the UK tax regime in relation to Industrial Buildings Allowances
(IBA's) was changed following the enactment of certain provisions contained in
the Finance Act 2008. As a result IBA's will be phased out in the period to 2008
to 2011. The Group provided GBPnil (2008 full year: GBP919, 000) for the
deferred tax liability arising from this change and the change was treated as
exceptional. There was no cash outflow in relation to this charge in the year
(2008:GBP nil)
6. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit on ordinary activities
after taxation and on 10,904,065 (2008: 10,923,038) ordinary shares, being the
weighted average number of ordinary shares in issue during the year.
Adjusted earnings per ordinary share is based on the profit on ordinary
activities after taxation and adjusted to take into account exceptional items.
+----------------------------------------------------+----------+----------+
| | Audited | Audited |
+----------------------------------------------------+----------+----------+
| | Year to | Year to |
+----------------------------------------------------+----------+----------+
| | December | December |
| | | |
+----------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------+----------+----------+
| | Pence | Pence |
| | per | per |
+----------------------------------------------------+----------+----------+
| | share | share |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Basic earnings per share (based on earnings | 14.3 | 13.8 |
| GBP1,556,000 (2008: GBP1,505,000)) | | |
+----------------------------------------------------+----------+----------+
| Adjustment: | | |
+----------------------------------------------------+----------+----------+
| Deferred taxation - | - | 8.4 |
| industrial buildings allowance (GBPnil ( 2008: | | |
| GBP919,000)) | | |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Adjusted basic earnings per share | 14.3 | 22.2 |
| | | |
+----------------------------------------------------+----------+----------+
Diluted basic earnings per ordinary share is based on the profit on ordinary
activities after taxation and on 10,934,139 (2008:10,965,990) ordinary shares,
being the weighted average number of ordinary shares in issue during the year of
10,904,065 (2008: 10,923,038) increased by 30,074 (2008: 42,952) 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 year.
Diluted adjusted earnings per ordinary share is based on the profit on ordinary
activities after taxation and adjusted to take into account exceptional items.
+----------------------------------------------------+----------+----------+
| | Audited | Audited |
+----------------------------------------------------+----------+----------+
| | Year to | Year to |
+----------------------------------------------------+----------+----------+
| | December | December |
| | | |
+----------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------+----------+----------+
| | Pence | Pence |
| | per | per |
+----------------------------------------------------+----------+----------+
| | share | share |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Diluted basic earnings per share (based on | 14.2 | 13.7 |
| earnings GBP1,556,000 (2008: GBP1,505,000)) | | |
+----------------------------------------------------+----------+----------+
| Adjustments: | | |
+----------------------------------------------------+----------+----------+
| Deferred taxation - | - | 8.4 |
| industrial buildings allowance (GBPnil ( 2008: | | |
| GBP919,000)) | | |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Diluted adjusted earnings per share | 14.2 | 22.1 |
+----------------------------------------------------+----------+----------+
7. Reconciliation of operating profit to cash generated from operations
+----------------------------------------------------+----------+----------+
| | Audited | Audited |
+----------------------------------------------------+----------+----------+
| | Year to | Year to |
+----------------------------------------------------+----------+----------+
| | December | December |
| | | |
+----------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+----------------------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+----------------------------------------------------+----------+----------+
| Cash generated from continuing operating | | |
| activities | | |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Operating profit | 2,288 | 2, 804 |
+----------------------------------------------------+----------+----------+
| Adjustments for | | |
+----------------------------------------------------+----------+----------+
| Depreciation and amortisation | 1,396 | 1, 070 |
+----------------------------------------------------+----------+----------+
| Profit on disposal of property, plant and | (14) | (35) |
| equipment | | |
+----------------------------------------------------+----------+----------+
| Share based payment | 22 | 23 |
+----------------------------------------------------+----------+----------+
| Difference between pension service costs and | (410) | (240) |
| contributions | | |
+----------------------------------------------------+----------+----------+
| Changes in working capital: | | |
+----------------------------------------------------+----------+----------+
| Inventory | 1,335 | (1,817) |
+----------------------------------------------------+----------+----------+
| Trade and other receivables | (415) | 1,021 |
+----------------------------------------------------+----------+----------+
| Trade and other payables | (763) | (324) |
+----------------------------------------------------+----------+----------+
| | | |
+----------------------------------------------------+----------+----------+
| Net cash inflow from operations | 3,439 | 2,502 |
+----------------------------------------------------+----------+----------+
8. Dividend
Payment of the final dividend for the year of 9.2p per ordinary share, normally
payable in May, was accelerated to March as detailed in our announcement of 17
February 2010 and was paid on 12 March 2010. This dividend has not been provided
for in the above figures. The total dividend paid in respect of the year was
14.0p (2008:14.0p) A resolution confirming the Directors recommendation that no
further dividend will be paid in respect of 2009 will be submitted to the Annual
General Meeting to be held on 19 May 2010.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUGAWUPUGRC
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