Interim Results

CHURCHILL CHINA PLC
7 September 1999

INTERIM RESULTS
for the six months ended 30th June 1999

Churchill China plc, is pleased to announce its results for
the six months ended 30th June 1999.

Key Points:

   *  Group sales of £22.1 million
     
   *  Pre-tax losses before exceptional items of £1.5 million
     
   *  Adjusted loss per share of 11.0p
     
   *  Net debt at 30th June 1999 of £2.3 million (9% geared)


Commenting on the announcement, Stephen Roper, Chairman, said:

'The key objectives have been to restore profitability to the
'Dining In division for the medium term, whilst at the same
time applying increased resource and focus to the growing and
profitable 'Dining Out business. Underlying these objectives
was the need to create a more flexible approach to
manufacturing so that resources could be easily switched
between 'Dining Out' and 'Dining In'. Our primary focus will
remain on the development of our 'Dining Out activities which
we believe have the capacity to deliver a strong and rising
profits stream in the year 2000 and beyond.'

For further information, please contact:

Stephen Roper, Chairman                       01782 577566
Churchill China plc

Tim Anderson
Lisa Baderoon
Buchanan Communications Limited               0171 466 5000

CHAIRMANS STATEMENT

Review

Trading has continued in line with our announcement at our
Annual General Meeting in May 1999, reflecting an improving
position since the year end for 'Dining Out, and an
unacceptable level of losses from the 'Dining In division.

For the half year to 30 June 1999, group sales fell by 13% to
£22.1m (1998 : £25.5m) and pre-tax losses before exceptional
items amounted to £1.5m. Within those figures, ''Dining Out
achieved an operating profit of £0.8m (1998 : £1.1m) on sales
of £9.3m (1998 : £8.8m) and 'Dining In produced an operating
loss of £2.2m (1998 : loss of £0.2m) on sales of £12.9m
(1998:£16.7m).

As promised at my year end statement in March I am now able to
report on the outcome of our strategic review.  The key
objectives have been to restore profitability to the 'Dining
In division for the medium term, whilst at the same time
applying increased resource and focus to the growing and
profitable 'Dining Out business. Underlying these objectives
was the need to create a more flexible approach to
manufacturing so that resources could be easily switched
between 'Dining Out' and 'Dining In'.

Decisive action has already taken place to reduce our volumes
of retail manufacturing. In June we closed one of our five
production sites and mothballed a large section of another
factory.  'Dining In volumes as a consequence have been
reduced by over 25%.  These closures resulted in 150
redundancies in addition to the cost reductions which took
place over the previous months. This action will focus our
attention on higher unit values in relation to the sale of our
own manufactured products. For the growing 'Dining Out'
business, increased resources have already been allocated to
sales and marketing with positive results.

The exceptional costs associated with the restructuring
exercise charged in the first half year amount to £3.6m, of
which £2.7m are represented by write-downs of buildings, plant
and machinery, £0.3m for provisions against stock, and £0.6m
of restructuring costs. It is anticipated that a further
exceptional cost of £0.5m will fall into the second half of
the year giving a total restructuring cost of £4.1m. The cash
element of the exceptional cost is expected to be £1.0m.

The total loss before taxation in the first half year was
£5.1m (1998: profit £1.0m)

Basic (loss)/earnings per share before exceptional items fell
to -43.6p (1998: 6.8p) and basic diluted (loss)/profit per 
share to -43.6p (1998:  6.8p).  After adjustment for exceptional 
costs the corresponding basic (loss)/earnings per share was -11.0p 
(1998: 6.8p) and diluted loss per share -11.0p (1998: 6.8p)

Due to the losses incurred in the first half, the Directors
believe it is inappropriate to recommend an interim dividend
(1998: 3p per share).  The Directors will review the payment
of a final dividend in the light of the second half trading
performance.

We finished the half year with net debt of £2.3m (9 % geared)
and expect to see a further modest cash outflow in the second
half, primarily due to seasonal working capital requirements.

 'Dining Out

Whilst profits and margins are still below historic levels I
am pleased to report a very strong improvement in the
manufacturing performance and a return to sales growth.

Sales overall rose by 4.4%.  The UK saw a poor first quarter
but a sustained improvement from April onwards.  There was a
positive return to growth in Europe, and from a low base, a
doubling of sales to the US.  This market remains a key target
for long term growth.

Despite higher sales, profits compared to the same period in
1998 slipped by £0.3m on higher manufacturing costs, but we
remain confident that a strong recovery for 'Dining Out is
already underway in both sales and profits.

Within the strategic review for 'Dining Out the Board has
endorsed the following policies:-

*  A major proportion of the Group's manufacturing investment
   for quality and capacity will be directed to the growing
   eating out market.

*  Increased resource for sales, marketing and new product
   development, very specifically targeted at the UK and US.

*  Utilisation of the 'Dining In manufacturing facilities for
   short and medium term capacity growth.

I am pleased to report that our major manufacturing investment
for 1999, completed in June, to improve our clay materials
handling, is already beginning to show benefits in both
quality and cost.

The enlarged sales force is now developing more end-user
contacts and combined with new product launches during the
year are winning an increasing number of new contracts.  Those
contracts will provide additional repeat business in the years
ahead.

 'Dining In

In contrast to the eating out market, trading remains
difficult in all areas.  The loss of £2.2m before exceptional
items in the first half of 1999 (1998: £0.2m loss) was
compounded by the high costs of short time working in the
first quarter and the lack of supermarket continuity
programmes in the US.

The actions taken on capacity and cost will considerably
reduce losses in the second half.

The Board has confirmed a number of strategies to restore the
'Dining In division to profit in the medium term.

*  In the UK our attention will focus on providing major
   retailers with a comprehensive range of ceramics in terms of
   both style and price points.  This will be achieved through a
   combination of our own manufactured goods and outsourcing
   products from overseas.

*  Our export markets will focus on traditional and classical
   English designs manufactured in-house.

*  Given our reduced capacity, sales of our manufactured
  products will focus on higher margin business.

*  In order to provide major UK retailers with a one-stop-
   shop, outsourcing will supplement our range where we are
   unable to reach the required price point with our own
   manufacturing, or where we do not have the facilities for
   producing a particular style of product, e.g. hand painted and
   coloured glazes.

A major design programme has been underway for the last few
months to cover a wider design portfolio.  New product
launches for classical and traditional in-house designs will
take place in the latter part of the year.  Our bone china
dinnerware will be re-launched at more competitive price
points before the end of this year, with blanks supplied from
overseas.  Bone china manufacturing will concentrate on our
wider range of Queen's and Wren mugs, as well as retaining our
own decorating facilities.  A range of exclusive hand painted
designs on earthenware have also been sourced and have been
well received by major retailers.  These products will go on
sale in the early part of 2000.

Prospects

Whilst the trading environment remains tough, particularly in
the 'Dining In market, we are confident that the actions
taken over the last six months are proving effective. The
outlook for 'Dining In remains problematic but we have taken
decisive action to drive down costs and reduce volumes which
will ensure that the division can return to profitability,
albeit not in the short term. For the moment, our primary
focus will remain on the development of our 'Dining Out
activities which we believe have the capacity to deliver a
strong and rising profits stream in the year 2000 and beyond.
The last few months of planning and implementing the major
changes in our business and the forthcoming months drive to
achieve improved performance has placed significant demands on
our workforce.  I would like to thank them for their effort
and commitment.

Stephen Roper
Chairman

Consolidated profit and loss account
For the six months ended 30 June 1999

                                         Unaudited Unaudited  Audited
                                          Six       Six         Year
                                         months     months     ended
                        Before           to 30      to 30     31 Decem-
                        excep-   Excep-  June      June       ber
                        tional   tional  1999      1998        1998
                        items    items  Total                                  
     
                 Note     £000   £000    £000      £000        £000     
                                                         
Turnover           1    22,160      -  22,160    25,528      50,767
                         =====  =====    =====    =====       =====
                                                         
                                                         
Operating          
(loss)/profit       1   (1,412)(3,663) (5,075)      880       1,188
                         =====  =====                    
Share of                                                 
operating profit                          
of associate                               27        61         116
Profit of                                                
disposal of                              
fixed assets                                0         0         115
Income from                                              
fixed asset                              
investment                                  0         0           6
Interest                                  
receivable                                  0        79          91
Interest payable                                         
and similar                              
changes                                   (73)       (4)        (48)
                                       ------     ------     ------
(Loss)/profit on                                         
ordinary                              
activities                             
before taxation                        (5,121)    1,016       1,468
                                                         
Tax on profit on                                         
ordinary                                
activities                                477      (290)       (468)
                                       ------    ------       -----
(Loss)/profit on                                         
ordinary                                
activities after
taxation                               (4,644)      726       1,000
                                                         
Dividends                                   0      (319)       (319)
                                       ------    ------      ------
Retained (Loss)/
profit for the period                  (4,644)      407         681
                                        =====     =====       =====
                                                         
                                         Pence  Pence     Pence 
                                         per    per       per 
                                         share  share     share
                                                        
(Loss)/earnings                                         
per ordinary
share
Basic              2                     (43.6)    6.8      9.4
Adjusted           2                     (11.0)    6.8      8.3
                                                        
Diluted                                                 
(loss)/earnings                                         
per ordinary
share
Basic              2                     (43.6)    6.8      9.4
Adjusted           2                     (11.0)    6.8      8.3

Consolidated Balance Sheet
as at 30 June 1999

                             Unaudited   Unaudited      Audited
                              30 June     30 June   31 December
                                1999        1998          1998
                               £000        £000          £000
                                                    
Fixed Assets                                        
Intangible Assets               294           0           310
Tangible Assets              17,658      21,837        22,311
Investments                     843         795           832
                             ---------   ---------  ---------
                             18,795      22,632        23,453
                             ---------   ---------  ---------
Current Assets                                      
Stocks                        6,305       5,898         6,052
Debtors: amounts falling     
due within one year           9,176      11,737         9,967
Cash at bank and in hand          9       1,367            10
                             ---------   ------        ------
                             15,490      19,002        16,029
                                                    
Creditors: amounts falling   
due within one year          (9,355)    (11,955)       (9,276)
                             ---------   ---------  ---------
Net current assets            6,135       7,047         6,753
                             ---------   ---------  ---------
Total assets less current    24,930      29,679        30,206
liabilities                   9,176      11,737         9,967
                                                    
Provisions for liabilities   
and charges                    (538)          0          (253)
                             ---------   ---------  ---------
Net assets                   24,392      29,679        29,953
                              =====       =====         =====
                                                    
Capital and reserves                                
Called up share capital       1,065       1,065         1,065
Share premium account         1,960       1,960         1,960
Revaluation reserve           2,267       3,220         3,201
Other reserves                  253         253           253
Profit and loss account      18,847      23,181        23,474
                             --------    --------     --------
Equity shareholders funds   24,392      29,679        29,953
                              =====        =====          =====

Cash flow statement

                            Unaudited   Unaudited   Audited
                            Six months  Six months  Year ended
                            to          to  30     31 December
                            30 June     June     
                            1999        1998         1998
                            £000  £000  £000   £000  £000   £000
                                        
                                                           
Net cash (outflow)/inflow         
from operating activities         (578)       2,227        3,847               
                 
                                                           
Returns on investments and                                 
servicing of finance
Interest received              0           79          91     
Interest paid                (62)           0         (31)   
Dividends received from           
other investments              0            0           6   
                            ----        ----        -----  

Returns on investments and                                 
servicing of finance               (62)          79          66
                                                           
Taxation                                                   
UK corporation tax paid             (25)       (385)      (1,772)
                                                           
Capital expenditure and                                    
financial investment
Purchase of tangible fixed  
assets                      (547)      (2,652)     (4,672)                     
  
Sale of tangible fixed        
assets                        54           85         283    
                            -----       -----       -----  
                          
Net cash outflow for                                       
capital expenditure and           
financial investment               (493)     (2,567)      (4,389)       
                                                           
Acquisitions                                               
Purchase of subsidiary         
undertaking                    0                     (562) 
                           -----                    -----  
Net cash outflow for               
acquisitions                         0            0         (562)              
             
                                 -----        -----        -----  
Net cash outflow before           
financing                       (1,158)        (646)      (2,810)      
                                                           
Equity dividends paid                0       (1,000)      (1,319)
                                                           
Financing                                                  
Repayment of loan              0          (48)        (48)   
Issue of ordinary shares       0           40          40     
Payment of principal under    
finance leases                 0            0          (2)    
                           -----        -----       -----  

Net cash outflow from                
financing                            0           (8)         (10)
                                 -----       ------        -----  
Decrease in cash and cash                                  
equivalents                     (1,158)      (1,654)      (4,139)
                                 =====        =====        =====


1. Segmental analysis by class of business

The analysis by class of business of the Group's turnover and
operating (loss)/profit is set out below


                                  Unaudited Unaudited  Audited
               Before             Six mon-  Six mon-   Year
               excepti- Excepti-  ths to    ths to     ended
               onal     onal      30 June   30 June    31 Dec-
               items    items                           ember
                                  1999      1998       1998
               £000     £000      £000      £000       £000
                                                     
Turnover                                             
Class of                                             
business
Dining Out    9,253        0     9,253     8,860     18,459
Dining In    12,907        0    12,907    16,668     32,308
            -------  -------  --------  --------    -------
             22,160        0    22,160    25,528     50,767
              =====    =====     =====     =====      =====    
Operating                                            
(loss)/profit
Class of                                             
business
Dining Out      812        0       812     1,047      1,779
Dining In    (2,224)  (3,663)   (5,887)     (167)      (591)
            -------  -------   -------    ------     ------
Total                                                
operating
(loss)/      
profit       (1,412)  (3,663)   (5,075)      880      1,188   
              =====    =====                        
Share of                                             
profit of
associate                           27        61        116
Profit on                                            
disposal of
fixed assets                         0         0        115
Income from                                          
fixed asset
investments                          0         0          6
Interest   
receivable                           0        79         91
Interest                                             
payable and 
similar
charges                            (73)       (4)       (48)
                              --------   -------    -------
(Loss)/profit                                        
before                          
taxation                        (5,121)    1,016      1,468
                                 =====     =====      =====

Costs arising from the restructuring of the Groups
manufacturing and operations and resulting impairment to 
fixed  assets have been treated as exceptional.  These 
exceptional costs comprise.

                                 1999     1998
                                 £000     £000
                                          
Impairment to fixed assets      2,729        0
Redundant and obsolete stocks     287        0
Restructuring costs               647        0
                               ------   ------
                                3,663        0
                                =====    =====

A further impairment to fixed assets if £917,000 (1998: nil)
has been charged directly against revaluation reserves.

A credit of £195,000 has been included in the corporation tax
credit in relation to the restructuring costs.

2. (Loss)/earnings  per ordinary share

The basic (loss)/earnings per ordinary share is based on the
(loss)/profit on ordinary activities after taxation and on
10,649,876 (1998: 10,640,513) ordinary shares, being the
weighted average number of ordinary shares in issue during the
year.

The adjusted (loss)/earnings per ordinary share is based on
the (loss)/profit on ordinary activities after taxation and
adjusted to take into account profit on disposal of fixed
assets and exceptional costs.

Diluted basic (loss)/earnings per ordinary share is based on
the (loss)/profit on ordinary  activities after taxation and
on 10,658,196 (1998: 10,669,561) ordinary shares, being the
weighted average number of ordinary shares in issue during the
year of 10,649,876 (1998: 10,640,513) increased by 8,320
(1998: 29,048) 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 share price during the year.

Diluted adjusted (loss)/earnings per ordinary shared is based
on the (loss)/profit activities after taxation and adjusted to
take into account profit on disposal of fixed assets and
exceptional costs.

                             Unaudited   Unaudited     Audited
                             Six months  Six months    Year to
                             to 30       to 30         31 December
                             June        June           
                             1999        1998          1998
                             pence per   pence per     pence per
                             share       share         share
                                                    
Basic (loss)/earnings per  
share                        (43.6)      6.8           9.4
Adjustments:                                        
       Profit on disposal        -         -          (1.1)
of fixed assets
       Exceptional item        32.6        -             -
                         ---------  --------      ---------
Adjusted basic            
(loss)/earnings per share    (11.0)      6.8           8.3
                             =====     =====         =====
                                                    
Diluted basic               
(loss)/earnings per share    (43.6)      6.8           9.4
Adjustments:                                        
       Profit on disposal       
of fixed assets                  -         -          (1.1)
       Exceptional item       32.6         -             -
                         --------- ---------      ---------
Diluted adjusted         
(loss)/earnings per share    (11.0)      6.8            8.3
                             =====     =====          =====

                              Unaudited Unaudited Audited
                              Six mon-  Six mon-  Year ended
                              ths to    ths to    31 December
                              30 June   30 June   
                              1999      1998      1998
                              £'000     £'000     £000
                                                 
3. Net cash (outflow)/inflow                     
from operating activities
                                                 
Operating (loss)/profit      (5,075)      880    1,188
Depreciation                  1,497     1,510    2,954
Impairment of fixed assets    2,729         0        0
Loss/(gain) on sale of
assets                            2         1       (9)
Goodwill amortisation            16         0       14
Increase in stocks             (253)     (907)    (806)
Decrease/(increase) in        
debtors                       1,311      (631)     793
(Decrease)/increase in trade  
creditors                    (1,090)    1,374     (287)
Increase in provisions for       
liabilities and charges         285        0         0
                           -------- -------- ---------

Net cash (outflow)/inflow      
from operating activities      (578)   2,227     3,847
                              =====    =====     =====

4. Basis of preparation

(a)The interim financial statement has been prepared in
   accordance with the accounting policies set out in the
   Annual Report for the year ended 31 December 1998.

(b)The interim financial statement was approved by the board
   on 6 September 1999.  Neither the interim financial
   statement nor comparative financial information for the six
   months ended 30 June 1998 have been audited or reviewed.
   Comparative information for the year ended 31 December 1998
   has been extracted from the audited financial statements
   for that period.

(c)The interim financial statement does not constitute
   statutory accounts as defined by the Companies Act 1985,
   Statutory accounts for the year ended 31 December 1998,
   including an unqualified audit report which did not contain
   statements under Section 237 (2) or (3) of the Companies
   Act 1985 have been filed with the Registrar of Companies.

5. Year 2000 Compliance

   Further to information given in the 1998 Annual Report, the
   Group has continued to work on a programme to provide
   reasonable, but not absolute, assurance that key accounting
   and business critical machinery will be millennium
   compliant.  The majority of work on this programme has been
   satisfactorily carried out and the programme remains on
   target for completion later in 1999.  Suppliers of business
   critical systems, equipment and products have been
   contacted and programmes to demonstrate compliance
   developed.