Churchill China (CHH) H1 2025 earnings summary

Executive summary

• Revenue declined 5.2% year-over-year to £38.5m, with strong performance in the UK and USA offset by weakness in Europe and other regions.

• Operating profit fell 37.8% to £2.8m due to lower volumes and increased costs, only partially offset by price increases and efficiency gains.

• The business maintained market share in a contracting market and focused on automation and cost reduction to counteract rising labor costs.

• The Board remains confident in the long-term potential, expecting market recovery in the medium term.

Financial highlights

• Revenue: £38.5m (down 5.2% year-over-year).

• Operating profit: £2.8m (down 37.8% year-over-year).

• Profit before tax: £3.1m (down 35.4% year-over-year).

• Profit after tax: £2.3m (down 36.1% year-over-year).

• Adjusted/statutory EPS: 21.0p (down 35.9% year-over-year).

• Interim dividend: 7.0p per share (down 39.1% year-over-year).

• Net cash and deposits: £5.6m (down 28% year-over-year).

Outlook and guidance

• Management expects markets to recover in the medium term and sees no change to the long-term business potential.

• Focus remains on maintaining a healthy cash balance and investing in profit-enhancing capital expenditure.

• The Board is taking prudent actions, including aligning dividends with earnings and preserving cash.