Churchill China Regulatory News (CHH)

18 May 2005 07:01

Churchill China PLC18 May 2005 For Immediate Release 18th May 2005 Churchill China plc AGM Trading Statement At the Company's Annual General Meeting, Stephen Roper, Chairman, will make thefollowing statement. "In my Chairman's Statement at the time of our Preliminary Results in March, Iindicated that sales to hospitality customers were expected to meet the highlevel achieved in the first half of 2004 when we benefited from an unusuallyhigh number of new installations in restaurants and hotels. Whilst sales growthis marginally behind our expectations, I am pleased to report that in the fourmonths to the end of April we have matched last year's record sales figure andcontinue to secure new business both in the UK and our target markets overseas. "Retail sales in the same period were lower than expected reflecting the slowdown in demand from our customers in both the UK and US, although a furtherincrease in sourced sales was achieved. "Margin levels have been affected by a number of cost increases, particularly inrelation to gas, a major cost for the Group. These increases have not yet beenoffset by efficiency gains. The cost saving initiatives established last yearcontinue to progress. The positive impact of the commissioning of our newwarehouse and from the consolidation of hospitality dish production into ourMarlborough and Whieldon Road sites will, as anticipated, benefit the secondhalf of the financial year. These savings will however be partially eroded byfurther gas price increases expected in the fourth quarter of the current year. "As a result of the above the Board believes that profit before tax in the firsthalf of the year will be significantly below that achieved in the correspondingperiod in 2004. Our full year performance will, however, benefit from the normalseasonal improvement in trading and will be underpinned by increased costefficiencies, although the shortfall in profit in the first six months isunlikely to be recovered in the second half year. Despite the disappointinglevel of current trading the Board envisages that on the basis of its revisedexpectations are achieved, the level of dividend payments for the year will bemaintained." For further information, please contact: Stephen Roper, Chairman or David Taylor, Finance Director 01782 577566 Churchill China plc Tim Anderson/Lisa Baderoon/Rebecca Skye Dietrich Buchanan Communications Limited Tel No: 020 7466 5000 This information is provided by RNS The company news service from the London Stock Exchange