Shares in Churchill China (AIM:CHH) dropped 21% on Thursday after the ceramics group warned that profits for the first half of 2025 would be “significantly below” last year, hit by weak export demand and an unfavourable sales mix.
The company, which supplies performance ceramic products to the global hospitality industry, said trading in May and June fell materially short of expectations, offsetting a steady performance in April.
While UK and US sales held up, European markets, particularly Germany, underperformed, and overall export sales lagged 2024 levels.
Restaurants, especially independents, are scaling back purchases amid cost pressures, and Churchill said customers are trading down to lower-priced products within its range. Reduced output to match demand has also affected factory efficiencies and margins.
Despite the downturn, Churchill said it continues to defend market share and has completed cost-saving capital projects. However, full-year revenue and profit are expected to fall well short of last year’s.
The shares fell 121.35p to 453.65p.