Half year revenues at pottery giant Churchill China are down £13 million on last year – and pre-tax profits fell by almost £4 million.
For the six months to June 30, revenue dropped by 41 per cent to £18.9 million from £31.9 million, while pre-tax profits decreased to £500,000 from £4.2 million for the same period in 2019.
Bosses at the Stoke-on-Trent-based tableware manufacturer say the latest results show a ‘resilient performance’ amid the ongoing global pandemic.
They added that Churchill China’s ceramic business enjoyed two record months at the start of 2020 but was ‘significantly’ impacted by Covid-19 in quarter two.
This resulted in a number of jobs – believed to be around 250 – being axed at the business.
In a statement on the stock exchange, company chairman Alan McWalter said: “The first six months of 2020 have demonstrated many of the qualities that define Churchill as a business. The year began exceptionally well, building on the success achieved over several years and the investments made in 2019.
“Our growth and differentiation strategies continued to deliver market share gains, particularly in export.
“The effect of Covid and associated worldwide lockdown measures on our business in the second quarter has been substantial, but our operational and financial strengths have allowed us to weather the initial storm, to respond quickly and to begin to recover with a high degree of energy.
Most Read
“We have developed and implemented a number of plans that will give us more flexibility to respond to market conditions which, whilst currently improving, are likely to remain uncertain.”
Churchill China stopped production in March and most of April and the majority of its workforce was furloughed; a team of skeleton staff remained on site to manage the business and prepare for re-opening.
The company started to scale-up its manufacturing operations in July and now expects to reach a medium-term operating level of around 70 per cent this month, compared to last year.
Mr McWalter said: “This revised operating level is necessarily below previous levels and it is with regret that we have needed to undertake an exercise to more closely align our output levels with short to medium term demand resulting in the loss of a number of roles within the business. We believe that we will be operating at a level where, despite lower overall volumes, we can still achieve efficient levels of productivity.”
He added: “The first half of 2020 has clearly represented a major challenge to Churchill’s operations in both manufacturing and logistics. We entered 2020 well placed in terms of our operations, with a well-invested factory delivering a strong blend of efficiency and flexibility. This has allowed us to respond quickly to the difficulties posed by Covid.
“The impact of Covid on all our markets has been substantial but we have responded well to the initial challenges and have orientated Churchill to the new business environment. We have many long term advantages; our business model remains strong, we have well invested and flexible operations, a strong balance sheet and an experienced and committed workforce.
“We are not yet in a position where we can assess the extent or longevity of the Covid disruption to our markets and the effect this will have on our forward revenues. Pleasingly we are now beginning to see some momentum in the improvement of trading across our business.”