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[June 2008]
Churchill China Trading Update
At the AGM of Churchill China PLC on 21 May 2008, Chairman Jonathan Sparey said: "I am pleased to report that trading in the year to date has continued in line with the comments made in our Preliminary Results statement on 1 April 2008.
"Demand in our Hospitality markets has returned to more normal levels after the exceptional performance in the first half of 2007 when the division benefited from higher levels of new installation business. Whilst this lower level of activity will affect profitability in the short term, its impact has been mitigated by healthy replacement sales and close attention to our cost base.
"Operating performance in our Retail division has slightly exceeded our expectations and has benefited from improved margins as we have introduced new products and extended our distribution within UK department stores. Products launched in partnership with Sanderson, Disney and Cath Kidston are all performing well.
"We continue to invest in a number of new market and geographic sectors where we have identified that revenues can be grown in the short and medium term. The £6 million capital expenditure programme initiated in 2007 to both increase our operating efficiency and expand our capacity in key areas is progressing well and is expected to reduce our cost base in the second half of 2008.
"Given the above trading performance and our expectation of increased operational efficiency in the second half of the year, we remain confident that Churchill is capable of achieving its objectives for the full year."
ENDS