Churchill China (CHH) H2 2025 earnings summary

Executive summary

• Revenue declined 2.6% year-over-year to £76.3m due to challenging hospitality markets and reduced manufacturing volumes, with profit before tax falling to £6.0m from £8.5m.

• Operating margin decreased to 7.4% from 10.2%, and basic EPS dropped to 39.7p from 57.9p.

• Cash generated from operations increased to £9.3m, and year-end cash and financial assets rose to £10.8m.

• Dividend reduced to 21.0p per share, a 42% decrease, reflecting a prudent response to market conditions.

Financial highlights

• Revenue: £76.3m (2024: £78.3m), Operating profit: £5.6m (2024: £8.0m), Profit before tax: £6.0m (2024: £8.5m).

• EBITDA: £9.4m (2024: £11.7m), Operating margin: 7.4% (2024: 10.2%).

• Basic EPS: 39.7p (2024: 57.9p), Cash generated from operations: £9.3m (2024: £5.1m).

• Inventory reduced to £21.3m (2024: £23.3m), reflecting lower sales and output.

Outlook and guidance

• Early signs of improved trading in mainland Europe; UK market remains subdued due to political uncertainty.

• Focus remains on export growth, especially in Continental Europe, and leveraging new product launches.

• Continued investment in productivity, automation, and energy efficiency to drive future margin improvement.

• Management expects a return to sales growth as market conditions recover and cost discipline continues.