Interim Results

RNS Number : 2996K

Churchill China PLC

01 September 2021

 

For immediate release

1 September 2021

CHURCHILL CHINA plc

("Churchill" or the "Company" or the "Group")

INTERIM RESULTS

For the six months ended 30 June 2021

Recovery well established with market share gains

Churchill China plc (AIM: CHH), the manufacturer of innovative performance ceramic products serving hospitality markets worldwide, is pleased to announce its Interim Results for the six months ended 30 June 2021.

Key Highlights:

Financial

· Operating profit before exceptional items £1.1m (2020 H1: £0.5m, FY2020: £0.9m)

· Profit before exceptional items and tax £1.0m (2020 H1: £0.5m, FY2020: £0.8m)

· Reported profit / (loss) before tax after exceptional items £1.0m (2020 H1: (£0.4m), FY2020: £0.1m)

· Adjusted basic earnings per share 4.5p (2020 H1: 3.5p, FY2020: 6.5p)

· Basic earnings / (loss) per share 4.5p (2020 H1: (2.9p), FY2020: 1.0p)

· Re-instated interim dividend of 6.7p per share declared July 2021 (2020 H1: nil)

· Net cash and deposits of £13.4m (2020 H1: £16.3m FY2020: £14.0m)

· Cash generated from operations £0.9m (2020 H1: £3.4m, FY2020: £1.8m)

o  Working capital increase as revenues rebuild

Business

· Total revenues £23.9m (2020 H1: £18.9m FY2020: £36.4m)

o  74% of 2019 H1 (2020 H1: 59%, FY2020: 54%)

· Strong performance following lifting of COVID restrictions

o  Group: May / June 2021 recovered to 2019 levels

o  Hospitality: May / June 2021 105% of 2019

· Continued market share gains across key markets

· Service levels maintained

· Further investment in UK manufacturing

· Continued progress on implementation of strategic plans

Alan McWalter, Chairman of Churchill China, commented:

'We remain confident that we will make good progress against our business and financial targets in both the short and long term.'

A conference call for analysts will be held at 10.00am today 1 September 2021. Analysts who require dial-in details please contact Buchanan at  [e-mail]  or telephone [phone]. 

For further information, please contact:

Churchill China plc	Tel: [phone]
David O'Connor / David Taylor / James Roper
Buchanan	Tel: [phone]
Mark Court / Sophie Wills
Investec	Tel: [phone]
David Flin / Alex Wright / Ben Farrow

 

CHAIRMAN'S STATEMENT

Introduction

I am pleased to report that Churchill's trading has continued to recover strongly following the easing of COVID related market restrictions in the UK, Europe and other export markets in the second quarter of 2021. Our decision to maintain operational levels when many of our markets were dormant has allowed us to secure a swift recovery as market demand has increased.

Current trading is at levels ahead of the comparable period in 2019 and whilst market activity has not yet fully returned, we believe we have secured further gains in market share across our key markets in line with our long term growth objectives. Our commitment to maintaining customer service levels led us to build inventory during 2020 and the early part of 2021 and this has allowed us to meet increasing order levels in the second quarter and into the third quarter of the year. We are now raising manufacturing output to maintain customer service in support of the recovery in demand.

We have continued to develop and implement our forward strategy in respect of extending export distribution and developing our range of differentiated added value products. We have completed a number of capital projects in support of this strategy and have approved further expenditure to improve the efficiency and sustainability of our business.

Financial Review

Total revenues rose by 27% to £23.9m (2020 H1: £18.9m, FY2020: £36.4m). Sales in the first four months of the year were well below the comparable periods for both 2019 and 2020 as a result of COVID related lockdowns. However revenues have recovered well following the relaxation of market restrictions beginning in April and were at 2019 levels in May and June. This trend has continued into the second half year. Ceramics revenues were £21.5m (2020 H1: £17.0m, FY2020: £33.1m). External revenue from Materials was £2.4m (2020 H1: £1.9m, FY2020: £3.3m). UK revenues increased by £2.0m to £8.9m (2020 H1: £6.8m, FY2020: £13.9m). Export revenues also improved by 25% to £15.0m (2020 H1: £12.0m, FY2020: £22.5m).

Overall gross margins improved on the comparable period in 2020, but were still affected by lower sales levels in the COVID affected first four months of the year and a consequent reduced coverage of fixed operational costs. We expect to see some improvement in this across the second half of the year as output levels increase.

Operating profit before exceptional items rose to £1.1m (2020 H1: £0.5m, FY2020: £0.9m). Overhead cost levels continued to be carefully managed, supporting strategic developments and maintaining our forward capability. No net furlough support was received in H1 2021. Operating profit margins before exceptional items were 4.4% (2020 H1: 2.6%, FY2020: 2.5%).

Profit before exceptional items and income tax was £1.0m (2020 H1: £0.5m, FY2020: £0.8m) with the increase entirely reflecting improved operating profit.

The reported tax charge in the period reflects the requirement to re-state the deferred tax charge to reflect the forthcoming increase in Corporation Tax rates to 25%. The impact of this is an additional charge of £0.3m, which, whilst material in relation to the first half, has not been treated as exceptional. The underlying tax rate was 19%.

Adjusted basic earnings per share before exceptional items was 4.5p (2020 H1: 3.5p, FY2020: 6.5p).

Reported profit / (loss) before tax after exceptional items was £1.0m (2020 H1: (£0.4m), FY2020: £0.1m).

Basic earnings / (loss) per share, after exceptional items, was 4.5p (2020 H1 (2.9p), FY2020: 1.0p)

We have continued to generate satisfactory levels of cash, despite a considerable requirement to rebuild working capital levels as our markets re-opened. This was partially offset by a reduction in inventory as we maintained our high customer service levels. Operating cash flow remained positive at £0.9m (2020 H1: £3.3m, FY2020: £1.8m). Capital expenditure at £1.3m (2020 H1: £2.0m) was lower than historic levels with the largest spend in relation to new building projects. We expect to increase our rate of investment in the second half of the year with projects targeting our energy footprint, additional value added product capacity and improved productivity. Cash and deposits at the start of the year were £14.0m and we are pleased that we still retained £13.4m at the end of the period.

We continue to enjoy a strong, ungeared, balance sheet with net assets of £38.2m. Our assets are largely tangible and also give us a high degree of short term liquidity, if required.

Dividend

In our market update on 6 July 2021 we declared an interim dividend of 6.7p (2020 H1: nil) per ordinary share, payable on 3 September 2021. This dividend reflects increased confidence in the strength of the recovery in Hospitality markets in the UK and overseas, the progress made by the business over the past months and maintenance of our strong financial position. As previously announced all CJRS support in relation to 2021 has been repaid.

The Board will continue to review its dividend policy but expects to re-institute the progressive policy in place prior to the emergence of COVID. Once again, the Board would like to express its thanks for the support of shareholders.

Business

Our performance in the first half of 2021 has reflected the impact of market restrictions on the operation of hospitality businesses in the first four months of the year and the progressive relaxation of restrictions in the second quarter. Early sales were below expectations as extensive lockdowns in the UK, Europe and the USA affected end user demand. As these restrictions were relaxed, at first in the UK and USA, we saw a strong increase in order levels. While European countries were slower to re-open their markets, the trend of market recovery seen in the UK has now been replicated. European revenues have also been supported by continued market share growth and it is currently our best performing regional market.

Profitability in the first four months of the year was restricted by the impact of lower sales and disruption from the impact of COVID on our operations. Overall manufacturing output levels at 70% of their 2019 equivalent gave reduced coverage of fixed costs within our operations. As sales levels have recovered later in the period we have generated improved margins and are now progressively increasing output towards 2019 levels to meet customer demand.

Ceramics

Overall Hospitality sales in the six months to 30 June 2021 were 71% of the comparable period in 2019, with the shortfall entirely attributable to the COVID affected first four months of the year where sales were approximately half their 2019 levels. Sales in May and June were 6% above 2019's comparative.

Export revenues continue to provide our main focus for growth with good progress in both Europe and the USA. We believe that we are taking an increasing share of the available market in Europe, supported by a strong service offering from our Rotterdam warehouse and continued introduction of new products. We have also performed well in the USA serviced from our warehouse in Chicago. The Rest of the World region remains mixed with recovery in some markets offset by continued COVID disruption in less developed countries. UK sales have performed creditably with an early recovery in regional sales channels being followed by increasing national account business later in the period.

We have further increased the proportion of added value products within our revenue with the percentage of sales attributable to our differentiated portfolio rising to 60%. In the first half of 2019 the comparable figure was 47% demonstrating further progress against this key target. We continue to develop and launch new products.

Retail revenues have increased during the period as we redirected UK production capacity on a tactical basis to secure additional manufacturing volumes, albeit at lower margins. We expect this business to reduce across the second half of the year.

Materials

Furlong Mills has performed creditably during the first six months of the year despite the continued effects of COVID on its main hospitality focused customers. Demand from retail orientated customers has supported a good revenue performance.

Operations

Our manufacturing and logistics operations have once again responded to the challenges raised by COVID. Output levels in the first half year were maintained despite disruption from the pandemic and a significant amount of work has been completed in support of our forward plans.  We are now in the process of building output and efficiency back towards 2019 levels to meet anticipated demand. This has required the recruitment of over one hundred new roles across manufacturing and logistics, together with the associated training requirement.

Further investment has been made in projects related to the forward development of our operations. We have completed our third factory extension in the last eighteen months, which will allow us to hold work in progress more efficiently, aiding flexibility and improving efficiency. The manufacturing floor space released by this extension will be used to install a further kiln, extending our added value product capacity, and to allow the automation of certain processes, raising productivity levels. We have also invested further in solar power generation and other projects aimed at improving sustainability.

We have continued to work on projects related to reducing our energy usage and waste. As we have previously indicated, we believe our product is highly sustainable once manufactured, given its durability and long life. However we use energy in its production and we are assessing how this may be progressively reduced. We believe the nearest opportunity is to continue to improve our manufacturing yields to reduce waste and we have been addressing this for several years through capital investment, materials development and our continuous improvement programme. There is also a considerable opportunity to reduce our energy usage through investment in more fuel efficient equipment and waste heat recovery.  We are working in this area both as a Company and within industry bodies.

The challenges raised for our operations team by our strategic plans will require further development of our workforce as a whole. We have continued to invest in the development of our employees and continue to supplement this with recruitment in key areas.

People

The extended impact of COVID has meant that our employees at all levels have been required to demonstrate adaptability and determination in the face of the regular changes in our operations as we respond to the changing circumstances of the pandemic and recovery. They can be extremely proud of their achievements over the past eighteen months and we are very grateful to them.

Outlook

In our Preliminary Results announcement on 19 April 2021, we noted the first signs of recovery in our markets as restrictions on Hospitality began to be removed. I am pleased to report that the increased market activity in Hospitality seen at that time has continued to build and that the performance above 2019 levels seen in May and June has been maintained into the second half year. It is not yet clear to what extent Hospitality markets have fully recovered to previous levels, but it appears that we can now be more certain that we can maintain and improve our competitive position in our core markets.

A central theme of our response to COVID has been that we have endeavoured to reinforce Churchill's brand values in relation to service, performance and a long term approach to business for the benefit of all our stakeholders. A number of the choices made in 2020 and 2021, particularly in relation to building capability in several areas, have proved to be sound and we are well placed to continue to execute our long term plans in what remains a resilient market.

It is not yet clear which course the pandemic and associated market restrictions may take over the coming months and we have retained both flexibility and a strong financial position in order to be able to respond to any renewed issues. The Company continues to trade in line with the Board's expectations and we remain confident that we will make good progress against our business and financial targets in both the short and long term.

Alan McWalter

Chairman

1 September 2021

 

Churchill China plc
Consolidated Income Statement
for the six months ended 30 June 2021
				Unaudited		Unaudited		Audited
				Six months to		Six months to		Twelve months to
				30 June 2021		30 June 2020		31 December 2020
				£000		£000		£000
			Note
Revenue			1	23,922		18,853		36,362
				===========		===========		===========
Operating profit before exceptional item			1	1,055		498		922
Exceptional items			2	-		(869)		(757)
Operating Profit			1	1,055		(371)		165
Finance income			3	2		56		60
Finance costs			3	(80)		(67)		(134)
				------------------		------------------		------------------
Profit before exceptional item and income tax				977		487		848
Exceptional items			2	-		(869)		(757)
Profit / (loss) before income tax				977		(382)		91
Income tax (expense) / credit			4	(480)		66		22
				------------------		------------------		------------------
Profit / (loss) for the period				497		(316)		113
				===========		===========		===========
Profit / (loss) for the period is attributable to:
Owners of the Company				497		(316)		113
				===========		===========		===========

										Pence per	Pence per			Pence per
										Share	Share			Share
Adjusted earnings per ordinary share									5	4.5		3.5				6.5
Diluted adjusted earnings per ordinary share									5	4.5		3.5				6.5
Basic earnings / (loss) per ordinary share									5	4.5		(2.9)				1.0
Diluted earnings / (loss) per ordinary share									5	4.5		(2.9)				1.0

Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2021

					Unaudited		Unaudited			Audited
					Six months to		Six months to			Twelve months to
					30 June 2021		30 June 2020			31 December 2020
					£000		£000			£000
Other comprehensive income / (expense)
Items that will not be reclassified to profit and loss:
Actuarial (loss) / gain on retirement benefit obligations (net)					-		-			(4,571)
Items that may be reclassified subsequently to profit
and loss
Impact of change in UK tax rate  on deferred tax					558		84			84
Exchange differences					2		29			(13)
					---------------		--------------			---------------
Other comprehensive income / (expense)					560		113			(4,500)
Profit / (loss) for the period					497		(316)			113
					---------------		---------------			----------------
Total comprehensive income / (expense) for the period					1,057		(203)			(4,387)
					==========		==========			==========
Attributable to:
Owners of the Company					1,057		(203)			(4,387)
					==========		==========			==========

All above figures relate to continuing operations

Churchill China plc
Consolidated Balance Sheets
as at 30 June 2021
				Unaudited		Unaudited		Audited
				30 June		30 June		31 December
				2021		2020		2020
				£000		£000		£000
Assets
Non-current assets
Property, plant and equipment				20,074		20.531		20,058
Intangible assets				1,152		1,434		1,306
Deferred income tax assets				2,539		1,092		2,082
				23,765		23,057		23,446
Current assets
Inventories				11,600		11,866		12,823
Trade and other receivables				10,908		3,965		4,309
Other financial assets				1,000		1,504		3,258
Cash and cash equivalents				12,437		14,833		10,738
				35,945		32,168		31,128
Total assets				59,710		55,225		54,574
				==========		==========		=============
Liabilities
Current liabilities
Trade and other payables				(10,037)		(7,130)		(5,663)
Current income tax liabilities				(41)		(93)		(24)
				-----------------		----------------		---------------------
Total current liabilities				(10,078)		(7,223)		(5,687)
				-----------------		----------------		---------------------
Non-current liabilities
Lease liabilities payables				(164)		(250)		(215)
Deferred income tax liabilities				(1,449)		(1,137)		(1,149)
Retirement benefit obligations				(9,812)		(5,296)		(10,382)
				-----------------		----------------		---------------------
Total non-current liabilities				(11,425)		(6,683)		(11,746)
				-----------------		----------------		---------------------
Total liabilities				(21,503)		(13,906)		(17,433)
				==========		==========		=============
Net assets				38,207		41,319		37,141
				==========		==========		=============
Equity
Issued share capital				1,103		1,103		1,103
Share premium account				2,348		2,348		2,348
Treasury shares				(80)		(446)		(80)
Other reserves				1,154		1,573		1,215
Retained earnings				33,682		36,741		32,555
				-----------------		----------------		---------------------
Total equity				38,207		41,319		37,141
				===========		==========		=============

Churchill China plc
Consolidated Statement of Changes in Equity
as at 30 June 2021				Issued
			Retained	share	Share	Treasury	Other	Total
			earnings	capital	premium	shares	reserves	Equity
			£000	£000	£000	£000	£000	£000
Balance at 1 January 2020			37,034	1,103	2,348	(446)	1,802	41,841
Comprehensive income
(Loss) / profit for the period			(316)	-	-	-	-	(316)
Other comprehensive income
Depreciation transfer - gross			5	-	-	-	(5)	-
Depreciation transfer - tax			(1)	-	-	-	1	-
Re-measurement of retirement benefit obligations - net of tax			107					107
Deferred tax - change in rate			-	-	-	-	(23)	(23)
Currency translation			-	-	-	-	29	29
Total comprehensive income			(205)	-	-	-	2	(203)
Transactions with owners
Share based payment			-	-	-	-	(231)	(231)
Deferred tax - share based payment			(88)	-	-	-	-	(88)
Total transactions with owners			(88)	-	-	-	(231)	(319)
Balance at 30 June 2020			36,741	1,103	2,348	(446)	1,573	41,319
Comprehensive income
Profit for the period			429	-	-	-	-	429
Other comprehensive income
Depreciation transfer - gross			7	-	-	-	(7)	-
Depreciation transfer - tax			(1)	-	-	-	1	-
Re-measurement of retirement benefit obligations - net of tax			(4,571)	-	-	-	-	(4,571)
Currency translation			-	-	-	-	(42)	(42)
Total comprehensive income			(4,136)	-	-	-	(48)	(4,184)
Transactions with owners
Proceeds of share issue			-	-	-	4	-	4
Share based payment			310	-	-	-	(310)	-
Deferred tax - share based payment			2	-	-	-	-	2
Treasury shares			(362)	-	-	362	-	-
Total transactions with owners			(50)	-	-	366	(310)	6
Balance at 31 December 2020			32,555	1,103	2,348	(80)	1,215	37,141

 

Churchill China plc
Consolidated Statement of Changes in Equity
as at 30 June 2021				Issued
			Retained	share	Share	Treasury	Other	Total
			earnings	capital	premium	shares	reserves	Equity
			£000	£000	£000	£000	£000	£000
Balance at 31 December 2020			32,555	1,103	2,348	(80)	1,215	37,141
Comprehensive income
Profit for the period			497	-	-	-	-	497
Other comprehensive income Depreciation transfer - gross			6	-	-	-	(6)	-
Depreciation transfer - tax			(2)	-	-	-	2	-
Deferred tax - change in rate			623	-	-	-	(65)	558
Currency translation			-	-	-	-	2	2
Total comprehensive income			1,124	-	-	-	(67)	1,057
Transactions with owners
Share based payment			-	-	-	-	6	6
Deferred tax - share based payment			3	-	-	-	-	3
Total transactions with owners			3	-	-	-	6	9
Balance at 30 June 2021			33,682	1,103	2,348	(80)	1,154	38,207

 

Churchill China plc
Consolidated Cash Flow Statement
for the six months ended 30 June 2021
					Unaudited		Unaudited		Audited
					Six months to		Six months to		Twelve months to
					30 June 2021		30 June 2020		31 December 2020
					£000		£000		£000
Cash flows from operating activities
Cash generated from operations (note 6)					884		3,545		1,803
Interest received					2		56		60
Interest paid					(8)		(7)		(29)
Income tax paid					(30)		(759)		(847)
					-----------------		-----------------		------------------
Net cash generated from operating activities					848		2,835		987
					-----------------		-----------------		-----------------
Investing activities
Purchases of property, plant and equipment					(1,307)		(2,015)		(2,403)
Proceeds on disposal of property, plant and equipment					31		8		44
Purchases of intangible assets					(13)		(8)		(50)
					-----------------		-----------------		-----------------
Net cash used in investing activities					(1,289)		(2,015)		(2,409)
					-----------------		-----------------		-----------------
Financing activities
Issue of ordinary shares					-		-		4
Principal element of finance lease payments					(118)		(65)		(163)
Net sale / (purchase) of other financial assets					2,258		1,503		(252)
					-----------------		-----------------		-----------------
Net cash generated by / (used in) financing activities					2,140		1,438		(411)
					-----------------		-----------------		-----------------
Net increase / (decrease) in cash and cash equivalents					1,699		2,258		(1,833)
Cash and cash equivalents at the beginning of the period					10,738		12,572		12,572
Exchange gain / (loss) on cash and cash equivalents					-		3		(1)
					-----------------		-----------------		-----------------
Cash and cash equivalents at the end of the period					12,437		14,833		10,738
					-----------------		-----------------		-----------------

1. Segmental analysis
for the six months ended 30 June 2021

				Unaudited		Unaudited		Audited
				Six months to		Six months to		Twelve months to
				30 June 2021		30 June 2020		31 December 2020
				£000		£000		£000
Revenue by class of business
Ceramics				21,461		16,985		33,092
Materials				3,966		2,901		5,453
				--------------------------		-------------------------		-----------------------------------
				25,427		19,886		38,545
Inter segment				(1,505)		(1,033)		(2,183)
				--------------------------		-------------------------		-----------------------------------
				23,922		18,853		36,362
				---------------------------		--------------------------		------------------------------------
Revenue by destination
United Kingdom				8,884		6,844		13,868
Rest of Europe				9,833		7,553		14,681
USA				2,651		2,442		4,145
Rest of the World				2,554		2,014		3,668
				--------------------------		--------------------------		-----------------------------------
				23,922		18,853		36,362
				---------------------------		--------------------------		------------------------------------

 

1. Segmental analysis (continued)
for the six months ended 30 June 2021

				Unaudited		Unaudited		Audited
				Six months to		Six months to		Twelve months to
				30 June 2021		30 June 2020		31 December 2020
				£000		£000		£000
Operating profit before exceptional items
Ceramics				825		460		1,104
Materials				230		38		(182)
				--------------------------		-------------------------		-----------------------------------
				1,055		498		922
				---------------------------		--------------------------		------------------------------------
Exceptional items
Ceramics				-		(832)		(666)
Materials				-		(37)		(91)
				--------------------------		-------------------------		-----------------------------------
				-		(869)		(757)
				---------------------------		--------------------------		------------------------------------
Operating profit /  (loss) after exceptional items
Ceramics				825		(372)		438
Materials				230		1		(273)
				--------------------------		-------------------------		-----------------------------------
				1,055		(371)		165
Unallocated items
Finance income				2		56		60
Finance costs				(80)		(67)		(134)
				---------------------------		--------------------------		------------------------------------
Profit / (loss) before income tax				977		(382)		91
				---------------------------		--------------------------		------------------------------------

2. Exceptional items   

Costs associated with the restructuring of the Group's operations during 2020 following the impact of COVID-19 were charged to the Income Statement as an exceptional item. A related income tax credit was provided for.

3. Finance income and costs

				Unaudited		Unaudited		Audited
				Six months to		Six months to		Twelve months to
				30 June 2021		30 June 2020		31 December 2020
				£000		£000		£000
Finance income
Other interest receivable				2		56		60
Finance income				2		56		60
Finance costs
Interest paid				(8)		(12)		(29)
Interest on pension scheme				(72)		(55)		(105)
Finance costs				(80)		(67)		(134)

The interest cost arising from pension schemes is a non cash item.

4. Income tax expense / (credit)

		Unaudited		Unaudited		Audited
		Six months to		Six months to		Twelve months to
		30 June 2021		30 June 2020		31 December 2020
		£000		£000		£000
Current taxation		75		(170)		(222)
Deferred taxation		106		104		200
Deferred taxation - increase in rate		298		-		-
Income tax expense		479		(66)		(22)

Following the announcement of the UK Government's intention to increase Corporation Tax rates from 19% to 25% with effect from 2023, deferred tax balances have been provided for at a rate of 25%. Given the materiality of this change in relation to the Income tax expense in the six months to 30 June 2021 it has been identified separately above, but not treated as exceptional.

 

5. Earnings per ordinary share   

Basic earnings / (loss) per ordinary share is based on the profit / (loss) after taxation attributable to owners of the Company of £497,000 (June 2020: loss of £316,000; December 2020: £113,000) and on 11,022,835 (June 2020: 10,986,234; December 2020: 10,996,835) ordinary shares, being the weighted average number of ordinary shares in issue during the period. Adjusted earnings per ordinary share is calculated after adjusting for the post tax effect of exceptional items (see note 2).

				Unaudited		Unaudited		Audited
				Six months  to		Six months to		Twelve months to
				30 June 2021		30 June 2020		31 December 2020
				Pence per share		Pence per share		Pence per share
Basic earnings / (loss) per share				4.5		(2.9)		1.0
Add exceptional items				-		6.4		5.5
Adjusted earnings per share				4.5		3.5		6.5

Diluted basic earnings / (loss) per ordinary share is based on the profit / (loss) after taxation attributable to owners of the Company of £497,000 (June 2020: loss of £316,000; December 2020: £113,000) and on 11,099,293 (June 2020: 11,089,136; December 2020: 11,028,486) ordinary shares, being the weighted average number of ordinary shares in issue during the period of 11,022,835 (June 2020: 10,986,234; December 2020: 10,996,835) increased by 76,458 (June 2020: 102,902; December 2020: 31,651) 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 period. Diluted adjusted earnings per ordinary share is calculated after adjusting for the post tax effect of exceptional items (see note 2).

				Unaudited		Unaudited		Audited
				Six months  to		Six months to		Twelve months to
				30 June 2021		30 June 2020		31 December 2020
				Pence per share		Pence per share		Pence per share
Diluted basic earnings / (loss) per share				4.5		(2.9)		1.0
Add exceptional items				-		6.4		5.5
Diluted adjusted earnings per share				4.5		3.5		6.5

 

6. Reconciliation of operating profit to net cash inflow from continuing activities

				Unaudited		Unaudited		Audited
				Six months to		Six months to		Twelve months to
				30 June 2021		30 June 2020		31 December 2020
				£000		£000		£000
Cash flow from operations
Operating profit / (loss)				1,055		(371)		165
Adjustments for
Depreciation and amortisation				1,464		1,289		2,586
Profit on disposal of property, plant and equipment				(2)		(8)		3
Charge / (credit) for share based payment				6		(231)		(231)
Decrease in retirement benefit obligations				(642)		(107)		(749)
Pension past service charge - non cash				-		-		40
Changes  in working capital
Inventory				1,223		(219)		(1,176)
Trade and other receivables				(6,597)		7,025		6,696
Trade and other payables				4,377		(3,833)		(5,531)
Cash inflow from operations				884		3,545		1,803

7. Basis of preparation and accounting policies   

The financial information included in the interim results announcement for the six months to 30 June 2021 was approved by the Board on 31 August 2021.

The interim financial information for the six months to 30 June 2021 has not been audited or reviewed and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Company's statutory accounts for the year ended 31 December 2020, prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

The interim financial statements have been prepared under the historical cost convention as modified by the revaluation of land and buildings 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 interim financial statements as were applied in the Group's last audited financial statements for the year ended 31 December 2020.

Statutory accounts for the year ended 31 December 2020 have been delivered to the Registrar of Companies.

8. Share buybacks   

The Company did not buy back any ordinary shares during the first six months of the year, but 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 2021 Annual General Meeting.   

The half-yearly report and this announcement will be available shortly on the Company's website www.churchill1795.com

 

END

 

 

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