Ok Ok, yes I know its not sexy, china you ask cups and saucers, weres the money in them?.
Well theres plenty I can tell you and as long as you are prepared to be patient and even see your investment drop a little, Im sure you will be rewarded in the long run.

Churchill is a classic VALUE share, and Im going to prove it to you.

The company manufactures and distributes ceramic tableware and if you look at the last few years it as gone through difficult times. The company as two main divisions, 'dining in' and 'dining out' ceramics.

The problems the company as faced have always been with the dining in division were cheapo imports have hit its sales hard. To counter act this the management have now restructured the division and now outsource manufacturing and are concentrating on higher priced classic English designs.

The dining out division, where they sell pots, crockery etc, to pubs, hotels, cafes etc, as been doing very well and at the last report was making a margin in the region of 20%.

The chairman had this to say at the last results on the 31st of December 2003,

Stephen Roper, Chairman, said:

'2003 was a year of immense challenge to which we successfully responded and met
all our key objectives. Our restructuring programme is now complete and has
brought considerable cost savings to the company. We look forward to a year of
strong growth and the continued success of Alchemy and related ranges.

As you will see from the year end result the company scores very highly on value, and lets not forget we are looking at P/E, Dividend, Assets and Debt.

Here are the financial highlights,

Sales of 49.5m (2002: 50.9m)
• Pre-tax profits before exceptional items of 2.8m (2002: 2.0m)
• Pre-tax profits after exceptional items of 1.2m (2002: 1.8m)
• Adjusted earnings per share of 18.2p (2002: 15.0p)
• Earnings per share of 5.7p (2002: 13.4p)
• Full year dividend increased 11% to 10p per ordinary share
• Strong operating cash generation of 2.9m (2002 : 2.0m) after 0.9m (2002:
0.3m) of exceptional cash costs.
• Restructuring programme complete on time and below budget.

If one goes into the results further with a calculator you will find that the companys P/E is now 11.3, the Divi Yield is at 4.8% (10p)and is above the market average and well above what you would get in an instant savings access bank account, the price to book (tangible book ratio) is 0.86 and the shares are trading at below NAV, plus the company as a positive net cash position and as no debt.

Looking further forward we have Churchills broker forecasting 24.2p EPS placing the shares on a very cheap forward P/E of 8.5.

Things are looking really upbeat for Churchill and I rate them a medium to long term purchase.

Please do your own research, you are responsible for your own buying and selling actions.


cheers Goldfinger

just appeared on my breakout list and have added a few more, spread 288-293 but can sell above mid as i've just tried dummy trades with Barclays online. Bit of research suggests this is a little gem like LTHM again full of cash. Chart looks a belter.