Trading Update

Churchill China PLC
06 December 2004


For Immediate Release                                            6 December 2004






                              CHURCHILL CHINA PLC



                                 Trading Update



The Board of Churchill China plc has reviewed its performance for the current
financial year ending 31st December 2004 and announces the following trading
update.



Sales of products to hospitality markets continue to increase year on year. The
substantial growth achieved in the first six months of the year has been
followed by a healthy second half performance. We expect the Group's record of
growth in this area to continue in 2005 and beyond.



Sales of products to retail markets continue to be difficult. With lower demand
levels in Europe and the USA, the Board anticipates that fourth quarter sales
will be below its earlier expectations.



Consequently, the Board expects that Group profit before exceptional items and
taxation for the year ending 31st December 2004 will be below market
expectations but will still show growth from the equivalent figure in 2003.



 In addition, the Board has decided to accelerate the transfer of UK production
capacity to support increased sales of hospitality product, with a consequent
reduction in the output levels of retail product.    In excess of 75% of
products sold to retail markets are already sourced from overseas suppliers and
this will increase. It had originally been anticipated that this change would
have taken place in late 2005 or early 2006. Bringing this process forward will
result in an exceptional charge against profits in the year to 31 December 2004
of approximately £800,000 of which the majority will be the non-cash write down
of stocks associated with retail production. UK manufacturing resource will, in
future, be fully concentrated on the more efficient production of hospitality
lines and the cost of retail products will be further reduced as new sources of
overseas supply are brought on line.



Further cost improvements are expected to be realised from 2005 onwards from
site consolidation. The transfer of warehousing and despatch operations from the
existing Alexander site to the new distribution centre currently under
construction at our principal site at Sandyford remains on schedule for
completion by the third quarter of 2005. This will result in lower operating
costs and improve service levels to our customers.



The Board intends to continue its progressive dividend policy.



For further information please contact:
CHURCHILL CHINA PLC                                      TEL:  [phone]
David Taylor
Stephen Roper

BUCHANAN COMMUNICATIONS                                  TEL:  [phone]
Lisa Baderoon/Rebecca Skye Dietrich




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