TIDMCHH
RNS Number : 8070V
Churchill China PLC
19 April 2021
For immediate release 19 April 2021
CHURCHILL CHINA plc
("Churchill" or the "Company" or the "Group")
PRELIMINARY RESULTS
For the year ended 31 December 2020
Resilient performance in 2020, strong platform for recovery
established
Churchill China plc (AIM: CHH), the manufacturer of innovative
performance ceramic products serving hospitality markets worldwide,
is pleased to announce its Preliminary Results for the year ended
31 December 2020.
Key Highlights:
Financial 2020
-- Operating profit before exceptional items GBP0.9m (2019: GBP11.2m)
-- Profit before exceptional items and tax GBP0.8m (2019: GBP11.2m)
-- Reported profit before tax after exceptional items GBP0.1m (2019: GBP11.3m)
-- Adjusted basic earnings per share 6.5p (2019: 81.7p)
-- Basic earnings per share 1.0p (2019: 82.6p)
-- Net cash and deposits of GBP14.0m (2019: GBP15.6m)
-- Cash generated from operations GBP1.8m (2019: GBP11.3m)
Business 2020
-- Total revenues GBP36.4m (2019: GBP67.5m)
-- Strong pre COVID performance
-- Response to pandemic demonstrates resilience
-- Further investment for the long term
-- Strong platform established for recovery
-- Progress on implementation of strategic plans
o Further added value product introductions
o Development of distribution channels in key export markets
o Extension of technical differentiation
o European distribution centre successfully established
Alan McWalter, Chairman of Churchill China, commented:
'We believe that we are well positioned to respond to the
forthcoming re-opening of our markets and have an improved
competitive position supported by a sound operational and financial
base.'
'Churchill is a long established, resilient business with strong
foundations. We believe that we are well placed to build momentum
in our trading performance throughout the rest of the year.'
A conference call for analysts will be held at 10.00am this
morning, 19 April 2021. Analysts who require dial-in details please
contact Buchanan at ChurchillChina@buchanan.uk.com or telephone 020
7466 5000.
For further information, please contact:
Churchill China plc Tel: 01782 577566
David O'Connor / David Taylor / James
Roper
Buchanan Tel: 020 7466 5000
Mark Court / Sophie Wills / Charlotte
Slater
Investec Tel: 020 7597 5970
David Flin / Alex Wright / Ben Farrow
CHAIRMAN'S STATEMENT
Introduction
2020 was an extraordinary year for Churchill bringing many
challenges. The first two and a half months of the year exemplified
the success of our forward strategy delivering record Hospitality
sales. The remainder of the year demonstrated the characteristics
of agility, resilience and long term focus that have always
underpinned our approach to business. Despite our core hospitality
markets being amongst the most affected by COVID, we remained
profitable across the year, maintained a strong financial position
and continued to invest in and develop our business for the longer
term.
We acted quickly and decisively to address the short term
impacts of the pandemic on our trading and operations, reducing
output levels to balance the safety of our employees with lower,
but efficient, production and the maintenance of the security of
our business. We were clear that we wished to continue to invest in
our longer term position and as such have continued to prioritise
product innovation, distribution development, improvements in our
manufacturing capability and in the sustainability of our
operations. While our markets have been subdued, we have continued
to reinforce our place within them, positioning us well to
capitalise on the opportunities ahead.
Short term trading has remained affected by the pandemic and
related government restrictions across our main markets. The
majority of our markets now have clear plans in place to re-open
hospitality outlets as levels of vaccination increase and virus
levels fall. Market activity is starting to grow steadily and we
believe that our established position will allow us to benefit as
markets recover during 2021.
I would again like to thank our employees for their tremendous
support and positive attitude to the challenges presented by 2020.
We have asked much of them across the year and they have responded,
as they always do, with determination and a clarity of purpose. I
am hugely appreciative of their contribution.
Financial Review
Total revenues fell by 46% to GBP36.4m (2019: GBP67.5m) as sales
were affected by COVID-19 and the consequent restrictions on
hospitality markets worldwide. Ceramics revenues were GBP33.1m
(2019: GBP62.7m). External revenue from Materials was GBP3.3m
(2019: GBP4.8m). UK revenues fell by GBP14.5m to GBP13.9m (2019:
GBP28.4m). Export revenues were also lower at GBP22.5m (2019:
GBP39.1m).
We saw further benefit as sales of added value product increased
as a proportion of total revenue, driving higher average price
levels. However this was offset by the operational gearing effect
of fixed costs as our manufacturing output levels were reduced,
leaving overall margins lower.
Operating profit before exceptional items fell to GBP0.9m (2019:
GBP11.2m), attributable to lower absolute contribution levels from
reduced revenues and lower gross margins. Overhead cost levels were
carefully managed over the year to balance short term
profitability, to continue to make progress against our strategic
targets and to maintain our ability to recover quickly once markets
re-open. Operating profit margins before exceptional items fell to
2.5% (2019: 16.7%).
Profit before exceptional items and income tax was GBP0.8m
(2019: GBP11.2m) with the fall as a result of the reduction in
operating profit.
Adjusted basic earnings per share before exceptional items was
6.5p (2019: 81.7p).
The need to adjust our operations to reflect the impact of COVID
has resulted in one-off costs of GBP0.8m which have been treated as
exceptional. These charges largely relate to a reduction in
manpower levels consistent with lower levels of production, offset
by a benefit in relation to the release of share based payment
provisions.
Reported profit before tax was GBP0.1m (2019: GBP11.3m).
Basic earnings per share, including the above exceptional items,
was 1.0p (2019: 82.6p)
One of our key objectives at the start of the pandemic was to
manage the business in a way that preserved our cash position such
that we could continue to invest in the forward development of the
business. We began the year with GBP15.6m of cash and deposits and
are pleased that we still retained GBP14.0m at the end of the
period.
Operating cash flow remained positive at GBP1.8m, supported by
lower working capital requirements as we managed our inventory
position carefully and benefited from reduced accounts receivable.
We expect working capital to increase during 2021 as our business
begins to recover. Capital expenditure was carefully managed at
GBP2.4m (2019: GBP5.5m) to ensure that the projects undertaken were
of strategic importance. We have invested in additional
manufacturing space in our main factory and further projects linked
to expansion of added value production capacity, both of which are
important components of our forward plan.
We continue to enjoy a strong, ungeared, balance sheet with net
assets of GBP37.1m. Our assets are largely tangible and also give
us a high degree of short term liquidity. We retain significant
forward capacity to manage our cash flow and to raise additional
finance if necessary.
Dividend
The Board recognises the importance of dividend income to
shareholders and our approach remains that the owners of our
business should receive an appropriate return for their investment.
However we do not believe that it is currently appropriate to
declare a final dividend for 2020. While our financial position
continues to be robust, the level of certainty attributable to the
expected recovery in our markets has not yet reached a position
which would support the re-commencement of distributions. The Board
will review its dividend policy at the earliest opportunity once a
clearer pattern of trading has emerged during the first half of
2021.
The support of shareholders, alongside that received from other
stakeholders, has been important in allowing the business to
negotiate the challenges posed by COVID during 2020 and the Board
is grateful for this contribution.
Business
2020 has required Churchill to operate with a high degree of
flexibility. To deliver a sound performance when our markets and
operating environment were subject to regular and substantial
change reflects the inherent strengths and foundations of the
business established over many years.
Our initial aim, once the effect of COVID had been assessed and
safe working practices established, has been to continue to service
our customers, to maintain a base level of activity and employment
and to secure our operational and financial position. In addition
to this we were determined to continue to make progress against our
strategic objectives whilst our markets were less active. We have
continued to develop our export distribution and have made further
progress in extending our range of added value products and
technical differentiation.
The resilience and breadth of the Hospitality market and our
position within it has been demonstrated through several periods of
restriction. Despite severe limitations the market has continued to
provide opportunities either in different sectors or geographies
and our market position and operational agility have allowed us to
continue to meet this demand. It will remain an attractive market
in the longer term
Ceramics
Hospitality sales in January and February 2020 were 33% ahead of
the comparable period in 2019 as our market and product development
initiatives, coupled with the benefits of the Dudson acquisition,
delivered a high level of growth. The remainder of the year has
seen a much more mixed picture with a substantial fall and
subsequent mid-year recovery finally being followed by extensive
restrictions across our markets in the final quarter. Across the
year as a whole, Hospitality sales were 51% of 2019's levels with
the important Spring and Christmas trading periods particularly
affected by restrictions.
In relative terms Hospitality Export revenues performed well,
indicating continued progress in the development of our markets and
increased market share. Europe has continued to be the focus of our
short term plans and we believe we have made further gains in our
major markets. We have largely maintained our sales and marketing
resource in this area and have also improved and extended our
distribution in key markets over the year. We hope to recover
strongly once markets begin to return to normal and to leverage our
ability to offer a market-leading service level from our European
distribution centre. The USA has also performed well despite
considerable turmoil from both COVID and political events.
UK sales have performed creditably although as market leader we
have inevitably been affected proportionately by lower market
activity. The UK is now showing some signs of recovery with higher
activity within national accounts and certain sub-sectors of the
market. We continue to benefit from wide distribution across a
range of sectors and have a long established presence in what is a
replacement orientated market.
We have continued to increase the proportion of added value
product within our revenue and to introduce new product throughout
2020 and into 2021, reflecting continued market demand for
innovation. New launches have extended our Stonecast and Studio
Prints ranges and particular focus has been given to increasing the
depth of our Dudson product range. The higher degree of
entrenchment of added value product within our customer base has
helped to protect our repeat sales during an otherwise challenging
period. Added value product now represents over 55% of our reduced
Hospitality revenue.
Our Retail business has performed well during the year and
revenues were ahead of our initial expectations. We have largely
completed our withdrawal from sourced product but have retained the
ability to service customers with UK made product. This has helped
to support our manufacturing efficiency during the year.
Churchill's core values continue to be innovation, technical
performance and service and we have improved our capability in
these areas over the year. We believe that our long established
reputation and relationship with end users, distributors and agents
worldwide will continue to be of great value to the business.
Materials
Furlong Mills has performed well during the year despite the
effects of COVID-19. The majority of Furlong's volume is supplied
to customers trading with Hospitality markets where the impact of
the pandemic has been highest. Furlong has continued to develop its
material science base and has begun to deliver improved solutions
both to support Churchill and the UK ceramics industry as a
whole.
Operations
The operation of a large manufacturing unit during the
uncertainties of COVID has provided many challenges during the
year, particularly in relation to changes in output levels. Our
performance reflects our long term investment in improving the
flexibility of our manufacturing processes and in developing the
capability of our staff. We have maintained a reasonable level of
efficiency at reduced output levels and this has required
significant efforts from our operational team. This has been
achieved alongside operating in a safe and secure working
environment. We have well established manufacturing operation which
provides a sound base to enable us to operate effectively as our
business position evolves and grows.
We have continued to invest in the development of our
operations, completing projects underway at the end of the first
quarter of 2020 and prioritising additional investments that will
improve efficiency and flexibility rather than those that add
capacity. We have completed two small extensions to our main UK
site and have commenced a third. The installation of a more fuel
efficient kiln specifically to build capability to make added value
product was completed later in the year. These investments will
support the achievement of our strategic aims over the longer
term.
This energy efficient kiln is one part of our integrated plan to
improve the sustainability of our operations. We make a highly
durable product which is re-usable many thousands of times, which
outperforms alternatives and requires low levels of replacement.
However, we recognise that we use significant amounts of energy and
that we must address this as a strategic priority. We have
developed a number of actions over several years, including the
reduction of levels of waste product and capital investment, both
to generate green energy and to recover waste heat. We will
continue to support initiatives in this area.
We welcome the signature of the Trade and Cooperation Agreement
which has clarified the trading relationship between the UK and EU.
Our contingency planning for Brexit was successful and we have
continued to benefit from the investments made, notably the
establishment of our logistics operation in Rotterdam, which will
support our ongoing development of European markets.
People
Our employees have continued to provide outstanding service to
the business, demonstrating an admirable level of adaptability in
addressing the formidable challenges and regular changes that have
characterised the business environment across the last year. Their
skills, commitment to the business and their colleagues has proven
to be invaluable. We believe that it is this culture that continues
to allow us to perform creditably in the face of adversity.
We have prioritised the importance of safety over the last year
and will continue to take appropriate steps to maintain a safe
working environment. Our Continuous Improvement programme has also
proved important in allowing our staff to address the challenges
raised by the pandemic effectively.
Outlook
Our response to COVID-19 during 2020 was characterised by three
main themes; to secure our operations; to protect our strong
financial position and to ensure our actions were not inconsistent
with our long term plans. As such we re-started operations as early
as possible and continued to offer our customers a high level of
service throughout the year. We have refined our strategic plans
and continued to invest in the development of our business. We
believe that we are well positioned to respond to the forthcoming
re-opening of our markets and have an improved competitive position
supported by a sound operational and financial base.
Despite the level of government restrictions on worldwide
hospitality markets in the fourth quarter of 2020 and the first
quarter of 2021, there is now growing evidence from enquiries,
order levels and sales that activity levels are recovering across
our markets.
Churchill is a long established resilient business with strong
foundations. Whilst we recognise that there may be further
volatility and effects from COVID-19 we believe that we are well
placed to build momentum in our trading performance throughout the
rest of the year. The progress demonstrated in the first weeks of
2020, where our Hospitality revenues were significantly ahead of
the same period in 2019, sets the performance benchmark that our
strategy can deliver. Our task now is to return the business to
those levels.
Alan McWalter
Chairman
19 April 2021
Churchill China plc
Consolidated Income Statement
for the year ended 31 December 2020
Audited Audited
Year to Year to
31 December 31 December
2020 2019
GBP000 GBP000
Note
Revenue 1 36,362 67,502
============ ============
Operating profit before
exceptional items 922 11,242
Exceptional items 2 (757) 117
------------ ------------
Operating profit 165 11,359
Share of results of associate
company - (22)
Finance income 3 60 124
Finance costs 3 (134) (168)
------------ ------------
Profit before exceptional item
and income tax 848 11,176
Exceptional item 2 (757) 117
------------ ------------
Profit before income tax 91 11,293
Income tax credit / (expense) 4 22 (2,136)
------------ ------------
Profit for the year 113 9,157
============ ============
Profit for the year is
attributable to:
Owners of the Company 113 9,063
Non-controlling interests - 94
------------ ------------
113 9,157
------------ ------------
Pence per Pence per
Share share
Basic earnings per ordinary share 5 1.0 82.6
Adjusted basic earnings per ordinary
share 5 6.5 81.7
Diluted earnings per ordinary
shares 5 1.0 81.8
Adjusted diluted earnings
per ordinary share 5 6.5 80.9
Churchill China
plc
Consolidated Statement of Comprehensive
Income
for the year ended 31 December 2020
Audited Audited
Year to Year to
31 December 31 December
2020 2019
GBP000 GBP000
Other comprehensive (expense) / income
Items that will not be reclassified to
profit or loss:
Actuarial loss on retirement benefit
obligations (4,571) (996)
Items that may be reclassified subsequently to
profit or loss:
Impact of change in
rate on UK deferred
tax 84 -
Currency translation
differences (13) (16)
------------ ------------
Other comprehensive expense for the year (4,500) (1,012)
Profit for
the year 113 9,157
Total comprehensive (expense) / income
for the year (4,387) 8,145
============ ============
Attributable
to:
Owners of the Company (4,387) 8,051
Non controlling interests - 94
------------ ------------
(4,387) 8,145
============ ============
All the above figures relate to continuing
operations
Churchill China
plc
Consolidated Balance
Sheet
as at 31 December
2020
Audited Audited
31 December 31 December
2020 2019
GBP000 GBP000
Assets
Non Current assets
Property, plant and
equipment 20,058 19,769
Intangible assets 1,306 1,571
Deferred income tax
assets 2,082 1,103
23,446 22,443
Current assets
Inventories 12,823 11,647
Trade and other receivables 4,309 10,951
Other financial
assets 3,258 3,007
Cash and cash equivalents 10,738 12,572
------------ ------------
31,128 38,177
------------ ------------
Total assets 54,574 60,620
============ ============
Liabilities
Current liabilities
Trade and other
payables (5,663) (11,105)
Current income tax
liabilities (24) (1,022)
------------ ------------
Total current liabilities (5,687) (12,127)
------------ ------------
Non-current liabilities
Lease liabilities (215) (269)
Deferred income tax
liabilities (1,149) (1,040)
Retirement benefit
obligations (10,382) (5,343)
Total non-current
liabilities (11,746) (6,652)
------------ ------------
Total liabilities (17,433) (18,779)
============ ============
Net assets 37,141 41,841
============ ============
Equity attributable to owners of the
Company
Issued share capital 1,103 1,103
Share premium account 2,348 2,348
Treasury shares (80) (446)
Other reserves 1,215 1,802
Retained earnings 32,555 37,034
------------ ------------
37,141 41,841
============ ============
Churchill China plc
Consolidated Statement of Changes
in Equity
as at 31 December 2020 Issued Non-
Retained share Share Treasury Other controlling Total
earnings capital premium shares Reserves Total Interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2019 33,542 1,103 2,348 (729) 1,703 37,967 - 37,967
----------------------------- ---- ----------- -------- -------- --------- --------- -------- ------------ --------
Comprehensive income
Profit for the period 9,063 - - - - 9,063 94 9,157
Other comprehensive
income
Depreciation transfer
- gross 12 - - - (12) - - -
Depreciation transfer
- tax (2) - - - 2 - - -
Remeasurement of post
employment benefit
obligations - net of
tax (996) - - - - (996) - (996)
Currency translation - - - - (16) (16) - (16)
----------------------------- ---- ----------- -------- -------- --------- --------- -------- ------------ --------
Total comprehensive
income 8,077 - - - (26) 8,051 94 8,145
----------------------------- ---- ----------- -------- -------- --------- --------- -------- ------------ --------
Transactions with owners
Dividends (3,356) - - - - (3,356) - (3,356)
Proceeds of share
issue - - - 3 - 3 - 3
Share based payment 199 - - - 125 324 - 324
Deferred tax - share
based payment 118 - - - - 118 - 118
Treasury shares (280) - - 280 - - - -
Non-controlling
interest
on acquisition - - - - - - 1,902 1,902
Purchase of
non-controlling
interest - - - - - - (1,996) (1,996)
Write off of premium
on purchase of non-
controlling interest (1,266) - - - - (1,266) - (1,266)
---------------------- ----- ---- ----------- -------- -------- --------- --------- -------- ------------ --------
Total transactions
with owners (4,585) - - 283 125 (4,177) (94) (4,271)
----------------------------- ---- ----------- -------- -------- --------- --------- -------- ------------ --------
Balance at 31 December
2019 37,034 1,103 2,348 (446) 1,802 41,841 - 41,841
----------------------------- ---- ----------- -------- -------- --------- --------- -------- ------------ --------
Issued Non-
Retained share Share Treasury Other controlling Total
earnings capital premium shares Reserves Total Interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2020 37,034 1,103 2,348 (446) 1,802 41,841 - 41,841
-------------------------- --------- -------- -------- --------- --------- -------- ------------ --------
Comprehensive income
Profit for the period 113 - - - - 113 - 113
Other comprehensive
income
Depreciation transfer
- gross 12 - - - (12) - - -
Depreciation transfer
- tax (2) - - - 2 - - -
Deferred tax - change
in rate 107 - - - (23) 84 - 84
Remeasurement of post
employment benefit
obligations - net of
tax (4,571) - - - - (4,571) - (4,571)
Currency translation - - - - (13) (13) - (13)
-------------------------- --------- -------- -------- --------- --------- -------- ------------ --------
Total comprehensive
income (4,341) - - - (46) (4,387) - (4,387)
-------------------------- --------- -------- -------- --------- --------- -------- ------------ --------
Transactions with owners
Proceeds of share
issue - - - 4 - 4 - 4
Share based payment 310 - - - (541) (231) - (231)
Deferred tax - share
based payment (86) - - - - (86) - (86)
Treasury shares (362) - - 362 - - - -
Total transactions
with owners (138) - - 362 (541) (313) - (313)
-------------------------- --------- -------- -------- --------- --------- -------- ------------ --------
Balance at 31 December
2020 32,555 1,103 2,348 (80) 1,215 37,141 - 37,141
-------------------------- --------- -------- -------- --------- --------- -------- ------------ --------
Churchill China
plc
Consolidated Cash Flow Statement
for the year ended 31 December 2020
Audited Audited
Year to Year to
31 December 31 December
2020 2019
GBP000 GBP000
Cash flows from operating
activities
Cash generated from operations
(note 6) 1,803 11,327
Interest received 60 124
Interest paid (29) (38)
Income tax paid (847) (1,845)
Net cash generated from operating activities 987 9,568
------------ ------------
Cash flows from investing
activities
Purchases of property, plant and equipment (2,403) (3,914)
Proceeds on disposal of property, plant
and equipment 44 96
Purchases of intangible
assets (50) (1,721)
Purchase of subsidiary,
net of cash acquired - 370
Net cash used in investing
activities (2,409) (5,169)
------------ ------------
Cash flows from financing
activities
Issue of ordinary
shares 4 3
Dividends paid - (3,356)
Purchase of non-controlling
interest - (3,263)
New leases acquired - 576
Payment of principal under
finance leases (163) (161)
Net purchase of other financial
assets (252) (5)
Net cash used in financing
activities (411) (6,206)
------------ ------------
Net (decrease) in cash and cash equivalents (1,833) (1,807)
Cash and cash equivalents at the beginning
of the year 12,572 14,380
Exchange loss on cash and cash equivalents (1) (1)
Cash and cash equivalents at the end of
the year 10,738 12,572
------------ ------------
1. Segmental analysis
for the year ended 31 December
2020
Audited Audited
Year to Year to
31 December 31 December
2020 2019
GBP000 GBP000
Revenue - segment
Ceramics 33,092 62,681
Materials 5,453 7,787
------------- -------------
38,545 70,468
Less: Inter segment revenue (2,183) (2,966)
------------- -------------
36,362 67,502
------------- -------------
Revenue - geographic
United Kingdom 13,869 28,460
Rest of Europe 14,681 24,477
USA 4,145 7,232
Rest of the World 3,667 7,333
36,362 67,502
------------- -------------
Operating profit (loss) before
exceptional items
Ceramics 1,104 10,840
Materials (182) 402
922 11,242
------------- -------------
Exceptional items
Ceramics (666) -
Materials (91) 117
(757) 117
------------- -------------
Operating profit after exceptional
items
Ceramics 438 10,840
Materials (273) 519
165 11,359
Unallocated items
Share of results of associate - (22)
Finance income 60 124
Finance costs (134) (168)
Profit before income tax 91 11,293
------------- -------------
2. Exceptional items
Exceptional costs totalling GBP757,000 have been recognised relating
to expenses incurred directly in relation to the effect of COVID-19
and the restructuring of the business to reflect lower demand and
output levels. This is largely composed of severance costs of GBP863,000,
offset by the release of share based payment and related provisions
of GBP333,000 and further costs of GBP227,000. In 2019 the Group
acquired control of Furlong Mills Ltd which had previously been
accounted for as an associate company. The fair value of assets
acquired was in excess of the consideration and so in accordance
with IFRS3, the negative goodwill of GBP117,000 was credited to
the Income Statement as an exceptional credit.
3. Finance income and
costs
Audited Audited
Year to Year to
31 December 31 December
2020 2019
GBP000 GBP000
Finance income
Interest income on cash and cash equivalents 60 124
Finance income 60 124
----------------------- ------------
Finance cost
Interest on pension scheme (105) (130)
Other interest (29) (38)
Finance costs (134) (168)
----------------------- ------------
The interest cost arising from pension schemes is
a non cash item
4. Income tax (credit)
/ expense
Audited Audited
Year to Year to
31 December 31 December
2020 2019
GBP000 GBP000
Current taxation (15) 1,729
Current taxation -
exceptional (207) -
Deferred taxation 143 387
Deferred taxation -
exceptional 57 20
Income tax (credit)
/ expense (22) 2,136
----------------------- ------------
5. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit on
ordinary activities after income tax attributable to shareholders
of GBP113,000 (2019: GBP9,063,000) and on 10,996,835 (2019:
10,974,010) ordinary shares, being the weighted average number of
ordinary shares in issue during the year. Adjusted basic earnings
per share is calculated after adjusting for the post tax effect of
the exceptional items detailed (Note 2).
Audited Audited
Year to Year to
31 December 31 December
2020 2019
Pence per share
Basic earnings per share 1.0 82.6
Add / (less) Exceptional
items 5.5 (0.9)
Adjusted basic earnings per
share 6.5 81.7
------------- -------------
Diluted earnings per ordinary share is based on the profit on
ordinary activities after income tax attributable to shareholders
of GBP113,000 (2019: GBP9,063,000) and on 11,028,486 (2019:
11,076,990) ordinary shares, being the weighted average number of
ordinary shares in issue during the year of 10,996,835 (2019:
10,974,010) increased by 31,651 (2019: 102,980) 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. Adjusted
diluted earnings per share is calculated after adjusting for the
post tax effect of the exceptional items detailed (Note 2).
Audited Audited
Year to Year to
31 December 31 December
2020 2019
Pence per share
Diluted earnings per share 1.0 81.8
Add / (less) Exceptional
items 5.5 (0.9)
Adjusted diluted adjusted
earnings per share 6.5 80.9
------------- -------------
6. Reconciliation of operating profit to net cash inflow from continuing
activities
Audited Audited
Year to Year to
31 December
2020 31 December 2019
GBP000 GBP000
Cash flows from operating
activities
Operating profit 165 11,359
Adjustments for:
Depreciation and amortisation 2,586 2,375
Negative goodwill - exceptional - (117)
Loss / (gain) on disposal of property,
plant and equipment 3 (22)
(Credit) / charge for
share based payment (231) 324
Defined benefit pension cash contribution (749) (1,430)
Pension current service charge - non
cash 40 -
Changes in working capital
Inventory (1,176) (906)
Trade and other receivables 6,696 304
Trade and other payables (5,531) (560)
Net cash inflow from operations 1,803 11,327
------------ -----------------
7. Dividend
The Directors do not currently propose a final dividend for
2020. The Company's dividend policy will be reviewed at the
earliest opportunity once the overall impact of COVID-19 is more
certain.
The total dividend paid and proposed in respect of the year is
nil (2019: 10.3p).
8. Retirement benefit obligations
The liability recognised by the Company in relation to its
Defined Benefit Pension Scheme under IAS 19 has increased by
GBP5,039,000 to GBP10,382,000 (2019: GBP5,343,000). This increase
is as a result of changes in market derived assumptions in relation
to the discount rate used to assess the present value of Scheme
liabilities of 1.4% (2019: 2.1%) and an increase in forecast future
CPI inflation to 2.3% (2019: 2.0%). Together with other more minor
variations in assumptions these changes have increased liabilities
by GBP8,381,000, which has been partially offset by higher than
anticipated investment returns. The Scheme was closed to new
entrants in 1999 and to future accrual in 2006.
Audited Audited
Year to Year to
31 December
2020 31 December 2019
GBP000 GBP000
Liability at 1 January (5,343) (5,443)
Past service cost (40) -
Interest cost (105) (130)
Experience gains / (losses) 121 (66)
Re-measurement from change in
assumptions (8,381) (5,193)
Re-measurement of return on plan assets 2,617 4,059
Employer contributions 749 1,430
Liability at 31 December (10,382) (5,343)
------------ -----------------
9. Share buybacks
The Company did not buy back any shares during the year, but may
consider making ad hoc share buybacks going forward at the
discretion of the Board and subject to shareholder authorities
being renewed at the forthcoming Annual General Meeting.
10. Basis of preparation and accounting policies
The financial information included in the preliminary
announcement for year to 31 December 2020 has been approved by the
Board on 19 April 2021.
The preliminary financial statements do not constitute the
statutory accounts of the Company within the meaning of section 434
of the Companies Act 2006, but are derived from those accounts,
which have been prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006
This information has been prepared under the historical cost
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 preliminary financial statements as were applied in
the Group's financial statements for the year ended 31 December
2019.
Statutory accounts for the year ended 31 December 2019 have been
delivered to the Registrar of Companies. Statutory accounts for the
year ended 31 December 2020 will be delivered to the Registrar of
Companies after the Company's Annual General Meeting and will also
be available on the Company's website ( www.churchill1795.com ) in
May 2021. The auditors have reported on those accounts. Their
report was not qualified, did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report, and did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
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END
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(END) Dow Jones Newswires
April 19, 2021 02:00 ET (06:00 GMT)
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