Churchill China FY profits seen in line with market expectations

Ceramic products Churchill China said on Friday that it anticipates full-year pre-tax profits to meet market expectations of £5.6m after exceeding earlier revenue estimates.

Churchill stated it has continued to address issues presented by the Covid-19 pandemic whilst maintaining its focus on securing long-term market share gains but noted that despite beating earlier revenue forecasts, it has also experienced higher production cost levels as it quickly scaled output to meet demand and cost inflation rose.

The AIM-listed firm expect these effects to continue into 2022, but to show "progressive improvement" over the year as a whole.

Churchill added that revenues continued to grow strongly and second-half sales, particularly in hospitality, showed growth against 2019 comparatives. Order levels were also high as overall supply into the market from competitors 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," said Churchill.

"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."

As of 1050 GMT, Churchill shares were down 1.27% at 1,750.0p.