World-renowned pottery firm Churchill China is set to reveal a 40 per cent profit fall over two years – leading to renewed calls for the Government to protect the struggling ceramics sector.
The 231-year-old Stoke-on-Trent firm, a supplier to top restaurants worldwide, is expected to deliver an annual profit of £6 million in its results tomorrow, down from £8.5 million one year ago and £10.8 million two years ago.
This is blamed on soaring UK energy prices – the highest in Europe even before the Iran war – plus rises in National Insurance and the minimum wage adding £1.5 million to costs. Shares have fallen 46 per cent in the past year.
Churchill’s problems follow the collapse of another historic potter, Denby, a fortnight ago.
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The sector is demanding more pottery firms be included in the British Industrial Supercharger scheme, which provides relief on electricity bills and green levies, lest more firms fail. Only 10 per cent of Britain’s 100 potteries qualify for the rebate at present.
A source close to Churchill, which has cut staff over the year from 720 to 650 and increased automation to save money, said joining the scheme was ‘the most practical short-term solution’, noting that Churchill had been forced to raise prices by as much as 40 per cent on some products.
‘Energy costs have doubled, products are more expensive and fewer people are buying us as much,’ the source said. ‘Denby had the same problem.’ Ceramics UK boss Rob Flello said: ‘This is a critical moment. If Government doesn’t bring us into the Supercharger it may regret it.’
Labour MP Linsey Farnsworth, whose constituency includes the Denby potteries, wrote to Rachel Reeves demanding ceramic firms be added to the Supercharger.
Fellow Labour MP Gareth Snell, whose Stoke-on-Trent Central constituency includes a number of the city’s surviving potteries, warned that ‘thousands of jobs’ were at risk and Government support could be ‘the difference between the sector surviving the gas price crisis or some well-known firms going to the wall.’
The plea for action comes as the city launched its own scheme for apprentices to head off a ‘cliff edge’ skills shortage in the sector due to retirement.
One boss said: ‘The median age of our workforce is 55. If we do nothing, skills will just die.’
The Government said talks were ‘ongoing’ on energy costs, adding: ‘We continue to help protect businesses from the worst economic challenges.’
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