REG - Character Group PLC - AUDITED ANNUAL RESULTS -YEAR ENDED 31 AUGUST 2022
22/12/2022 07:00
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RNS Number : 5932K Character Group PLC 22 December 2022
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR. Upon the publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the public domain.
LONDON: Thursday, 22 December 2022
THE CHARACTER GROUP PLC
("Character", "Group" or "Company")
Designers, developers and international distributor of toys, games and
giftware
AUDITED ANNUAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2022
The information contained within this announcement is a summary taken from the
Group's audited 2022 Annual Report and Accounts, which can be viewed in full
on the Company's website at: www.thecharacter.com
(http://www.thecharacter.com) . The 2022 Annual Report and Accounts will
also be posted to shareholders who have elected to receive printed copies.
The Company gives notice that the 2023 Annual General Meeting of the Company
will be held at, 86 - 88 Coombe Road, New Malden, Surrey, KT3 4QS on Friday,
20 January 2023 at 11.00 am. The Notice of AGM appears at the end of the 2022
Annual Report and Accounts.
Highlights:
KEY PERFORMANCE INDICATORS 12 months ended 12 months ended
31 August 2022 31 August 2021
Revenue £176.4m £140.0m
Operating profit (before highlighted items) * £11.4m £11.2m
Profit before tax (before highlighted items) * £11.3m £11.1m
Statutory profit before tax £11.4m £15.3m
EBITDA £14.2m £14.0m
Basic earnings per share before highlighted items* 45.73p 40.92p
Diluted earnings per share before highlighted items* 44.77p 40.37p
Basic earnings per share after highlighted items 46.37p 56.86p
Diluted earnings per share after highlighted items 45.39p 56.09p
Dividends declared per share for the year 17.0p 15.0p
Net assets £38.9m £44.9m
Net cash £20.0m £35.9m
*Excludes: £0.2m £2.1m
Mark to market profit adjustments on FX derivative positions
Profit on sale of property - £2.0m
· Notable performers in 2022 included Goo Jit Zu - distributed in
over 40 territories, Chill Factor, Weebles, Cra-Z-Art Shimmer 'n Sparkle and
Peppa Pig
· Toy Retailers Association's prestigious "DreamToys", 'Top 12
list' for Christmas included two of our products, namely Heroes of Goo Jit Zu
and Jiggly Pets Gigi the Giraffe
Going into 2023:
· the Group has a strong product offering for its markets and has
been very well received by customers
· The new ranges and additions include new products under our
multi-territory Stretch Armstrong product range including Star Wars and
Transformers; a line of Teenage Mutant Ninja Turtles products from Playmates
International for domestic distribution to coincide with a new Turtles movie
to be released in the second half; and the distribution of exciting toy ranges
from Bonkers Toys based on the Aphmau and Lanky Box brands.
"The strength of our brands and products portfolio in 2022 has enabled us to
significantly increase sales despite intense margin pressure Trading
conditions have become more challenging and sales have slowed in the lead up
to Christmas and combined with other factors will adversely affect the Group's
performance in the first half of the current financial year."
This being said, as we look ahead on the back of a strong 2023 offering,
international sales are forecast to grow significantly in the second half of
the current financial year with margin improvement from that time. Although
we expect domestic sales to be flat in the second half, the substantial
reductions in freight rates, together with reduced costs of production from
factories in China and strengthening of Sterling against the US Dollar from
its recent low point has given the Board considerable optimism for a second
half rebound."
ENQUIRIES:
The Character Group plc
Jon Diver, Joint Managing Director
Kiran Shah, Joint Managing Director & Group Finance Director
Office: +44 (0) 208 329 3377
Mobile: +44 (0) 7831 802219 (JD)
Mobile: +44 (0) 7956 278522 (KS)
Email: info@charactergroup.plc.uk (mailto:info@charactergroup.plc.uk)
FTSE sector: leisure
FTSE AIM All-share: symbol: CCT.L
Market cap: £82m
Product ranges can be viewed at www.character-online.co.uk
(http://www.character-online.co.uk) .
Panmure Gordon
(Nominated Adviser and Joint Broker)
Atholl Tweedie, Investment Banking
Rupert Dearden / Charles Leigh-Pemberton, Corporate Broking
Tel: +44 (0) 20 7886 2500
Allenby Capital Limited
(Joint Broker)
Nick Athanas, Corporate Broking
Amrit Nahal, Sales & Corporate Broking
Tel: +44 (0) 20 3328 5656
TooleyStreet Communications Limited
(Investor and media relations)
Fiona Tooley
Tel: +44 (0) 7785 703523
Email: fiona@tooleystreet.com (mailto:fiona@tooleystreet.com)
Note:
The Key Performance Indicators (KPI's) table shown at the top of this
Announcement provide the data on an underlying basis and, also by reference to
Generally Accepted Accounting Practice (GAAP) as adopted and applied
consistently by the Group.
THE CHARACTER GROUP plc
Designers, developers and international distributor of toys, games and
giftware
FINAL AUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2022
INTRODUCTION
The preliminary indications given in the trading update issued by the Company
on 4 October 2022 have been confirmed in the final results for the year ended
31 August 2022, with the Group delivering a creditable profit before tax
before highlighted items, of £11.3m. The turnover in the year improved
significantly to £176.4m (FY 2021: £140.0m), driven primarily by increased
sales of the Group's Goo Jit Zu product line in the USA. However, increases
in costs of materials, production and freight throughout the year, resistance
to price increases and, increasingly in the second half, the strengthening of
the US Dollar have eroded margins and denied the Group a corresponding uplift
in profitability.
The Group continued to be cash generative, delivering £4.2m of cash from
operations in the year (2021: £27.3m), despite an increase in inventories of
£15.3m due to a conscious decision to bring stock in early. We finished the
year with a net cash balance of £20.0m (2021: £35.9m), after funding the
£13.6m tender offer buyback of shares, which completed in February 2022.
OPERATIONAL PERFORMANCE
Group revenue in the year to 31 August 2022 was £176.4m, against a turnover
of £140.0m in the comparable 2021 period. The gross profit margin was 23.5%
(FY 2021: 28.9%) and, on an absolute basis, the gross profit was £41.3m
compared to £40.4m for the previous year.
A significant proportion of the Group's purchases are made in US dollars; the
Group is therefore exposed to foreign currency fluctuations and manages the
associated risk through the purchase of forward exchange contracts and
derivative financial instruments. Under International Financial Reporting
Standards (IFRS), at the end of each reporting period the Group is required to
make an adjustment in its financial statements to incorporate a "mark to
market" valuation of such financial instruments. The "mark to market"
adjustment for this financial period results in a notional profit of £0.2m.
This compares to a corresponding notional profit of £2.1m reported in the
year to 31 August 2021. These "mark to market" adjustments are non-cash
items calculated by reference to unpredictable and sometimes volatile currency
spot rates at the relevant balance sheet dates. To present the results on a
"normal" basis, these "mark to market" profit adjustments on FX derivative
positions are excluded, although shown separately as "highlighted items" to
demonstrate the "underlying" position.
The Group is reporting a profit before tax in the period under review after
highlighted items, of £11.4m (FY 2021: £15.3m). Underlying earnings before
interest, tax, depreciation and amortisation were £14.2m (FY 2021: £14.0m).
Underlying basic earnings per share before highlighted items amounted to
45.73p (FY 2021: 40.92p). Diluted earnings per share, on the same basis,
were 44.77p (FY 2021: 40.37p).
Basic earnings per share after highlighted items were 46.37p (FY 2021:
56.86p). Diluted earnings per share, on the same basis, were 45.39p (FY
2021: 56.09p).
FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW
The Group's net assets at 31 August 2022 totalled £38.9m (FY 2021: £44.9m),
the reduction reflecting the £13.6m buyback of approximately 10% of the
Company's issued voting share capital pursuant to the tender offer by the
Company in the financial period.
Inventories were c.£ 15.3m higher at the end of the financial period at
£26.2m (FY 2021 £10.9m), reflecting the Group's policy this year of making
our purchases early; this stock is largely current product and should sell
through.
During the period, the Group generated cash from operations of £4.2m (FY
2021: £27.3m), which was impacted by the substantially increased inventories
held at the year-end. Net interest charges on short-term use of working
capital facilities during the year amounted to £0.2m (FY 2021: £0.1m).
At the end of the financial year, the Group had a net cash position of
£20.0m, compared to £35.9m at the end of the 2021 comparative period,
despite financing the £13.6m tender offer buyback.
DIVIDEND
The Board remains committed to maintaining a progressive dividend policy.
Accordingly, the Directors will be recommending to shareholders a final
dividend of 10.0p (2021 H2: 9.0p per share). This, together with the interim
dividend of 7.0p per share paid in July 2022, will bring the total dividend
for the year to 17.0p per share (FY 2021: 15.0p), an increase of 13.3%. The
total dividend for the year is covered approximately 2.7 times by underlying
annual earnings (2021: 2.7 times).
Subject to approval by shareholders at the Annual General Meeting ("AGM") at
11am on Friday, 20 January 2023, the following timetable will apply for this
dividend:
Event Date
Ex-dividend date 12 January 2023
Record date 13 January 2023
Payment date 27 January 2023
OUR PRODUCT PORTFOLIO
The strength of our brands and products portfolio has enabled us to
significantly increase sales at a time when margins have come under intense
pressure. The notable performers during the year under review were Goo Jit
Zu (our star product range which is being distributed in over 40 territories
and continues to maintain a strong presence), Chill Factor (the brand acquired
in 2021 which we have reinvigorated and which has significantly increased its
domestic and international penetration), Weebles (the "wibbly wobbly fun"
concept that has proved to have lasting consumer appeal and now features in
our Peppa Pig, Bluey, Cocomelon and My Little Pony licensed product ranges),
Cra-Z-Art Shimmer 'n Sparkle (the popular ranges of play makeup, nail bar,
body art and beauty products and accessories) and Peppa Pig (our range of toys
developed through our continued and valued collaboration with Hasbro).
Once again, in November 2022 we featured in the Toy Retailers Association's
prestigious "DreamToys", which showcases the most sought-after toy categories
in the UK for Christmas 2022. We were delighted that the 'Top 12 list'
included two of our products, namely Heroes of Goo Jit Zu and Jiggly Pets Gigi
the Giraffe.
A number of exciting new brand concepts, additions and extensions, including
of our own brands, will be added to our offering and unveiled during the
London Toy Fair in January 2023 and through to Spring next year.
The Group's current portfolio of products and brands can be viewed at
www.character-online.com (http://www.character-online.com) .
PROXY
The Scandinavian markets have been subjected to very similar conditions to our
domestic market in the UK and the strength of the US Dollar in particular
resulted in a broadly comparable outcome for the Group's Scandinavian
operations to that of the previous year. The integration of Proxy into the
Group has continued with a large degree of alignment in the product listings,
processes and procedures being achieved during the year under review.
It is encouraging to report that two of Proxy's hero products, the Pokémon
toy products range from Jazwares and the extensive range of Funko collectable
Pop! figurines, have sold well in the Scandinavian territories and continue to
be solid brands.
SHARE BUY-BACK PROGRAMME
In the period under review, the Company acquired for cancellation a total of
2,142,572 ordinary shares in the Company at an aggregate cost of £13.5m
(excluding associated costs) and a cost of £6.30 per ordinary share (FY 2021:
nil). This buyback was made pursuant to a tender offer issued on behalf of
the Company on 28 January 2022 and completed in February 2022. The Company
currently has a remaining authority to buy-back up to a further 1,057,428
ordinary shares under the authority granted at the AGM in January 2022, which
authority will expire at the 2023 AGM.
It remains part of the Group's overall strategy to continue to repurchase the
Company's own shares, when considered appropriate. The Board believes that
it is in the Company's and all investors' interests to provide shareholders
who wish to realise part or all of their investment in the Company with an
opportunity to access liquidity that is not otherwise available in the market
and to return excess capital to shareholders. Therefore, the Board will be
seeking a new authority to buy back up to 2,890,000 ordinary shares
(constituting approximately 15% of the total voting rights in the Company) at
the 2023 AGM. This authority will also allow the Company to implement
buybacks either by way of an announced buyback programme or by way of further
tenders for its issued shares. In line with the Board's buyback strategy,
the Company will continue to repurchase the Company's own shares as and when
considered appropriate. Details of any intention to exercise this authority
will be announced and any tender proposal(s) will be fully communicated to
shareholders if and when the Board resolves to implement such arrangements.
TOTAL VOTING RIGHTS
As at today's date, the Company has 21,465,929 ordinary shares in issue,
excluding shares held in treasury. The Company holds 2,149,477 ordinary
shares in treasury, representing approximately 10.0 per cent. of the issued
share capital, which do not carry voting or dividend rights. Therefore, the
total number of voting rights in the Company is 19,316,452. This figure of
19,316,452 may be used by shareholders as the denominator for the calculations
by which they may determine if they are required to notify their interest, or
change to their notified interest, in the Company under the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules.
OUR PEOPLE
The Group employs approximately 216 permanent staff across its locations in
the UK, Scandinavia and Asia (FY 2021: 209), supplemented by additional
seasonal labour at its warehouses in Oldham during peak demand periods. The
longevity of staff employment with the Group, many with over 15 years'
service, demonstrates the bond and loyalty that many of them feel towards
their colleagues and the Group as a whole.
On behalf of our shareholders, the Board pays tribute to and thanks all our
personnel for their dedication and hard work in delivering the results for the
year under review and for their continued support.
THE BOARD
The Board was delighted to announce the appointment of Jonathan Shearman as an
additional independent, non-executive director in June 2022. Jonathan has
been appointed to all of the Board's committees and to the Chair of the
Board's Remuneration Committee and has already had a positive impact on the
Company's governance.
David Harris, who joined us in 2004 and is the longest serving non-executive
director, has notified the Board that he wishes to retire and therefore he
will not be offering himself for re-election at our AGM in January 2023. On
behalf of all shareholders and staff around the business, the Board thanks
David for his valued service and wise counsel over the years; we wish him all
the best for the future.
As announced in June 2022, Mike Hyde, the Managing Director of the Group's Far
East operations, will be relinquishing his executive role from 31 December
2022 to pursue other challenges. He will, however, remain on the Board in a
non-executive capacity from 1 January 2023. We have greatly appreciated
Mike's contributions over the years. Since July this year, he has worked
closely with the general manager appointed to replace him, to ensure an
orderly transition of responsibilities.
THE 2023 ANNUAL GENERAL MEETING (AGM)
The Company's 2023 AGM will take place as an in-person meeting at 11:00 a.m.
on Friday, 20 January 2023. The Meeting is to be held at the Group's head
office in New Malden, Surrey and the formal notice of the meeting is set out
in the Audited Annual Report and Accounts. Explanatory notes in relation to
the resolutions to be proposed at the AGM are set out at the end of the notice
of meeting. Attendance can be in person or by proxy or, in the case of a
company or organisation, by appointment of a corporate representative.
The Company is providing facilities which will enable shareholders to:
- view the live meeting electronically. If you wish to attend in
this fashion, please email info@charactergroup.plc.uk
(mailto:info@charactergroup.plc.uk) (stating "Character Group: 2023 AGM
virtual attendance" in the subject line of the email) by 11:00 a.m. on
Wednesday, 18 January 2023 to ensure the issue to you of a Microsoft Teams
invitation. Invitations enabling remote attendance will be issued by 6:00
p.m. on 19 January 2023. Please note, however, that joining remotely will
not constitute attendance at the meeting for the purposes of being counted in
the quorum for the AGM and that virtual attendees will not be able to vote at
the AGM. Shareholders wishing to attend the meeting virtually in this
fashion are, therefore, requested to exercise their votes by submitting their
forms of proxy appointing the Chair of the AGM as their proxy, in accordance
with the instructions set out in the notice of meeting by no later than 11:00
a.m. on 18 January 2023. If the Chair of the AGM is appointed as proxy to a
shareholder, he will vote in accordance with any instructions given to him. If
the Chair of the meeting is given discretion as to how to vote, he will vote
in favour of each of the resolutions to be proposed at the AGM; and
- submit written questions prior to the AGM. Any shareholder that
wishes to put questions to the Board is invited to submit those questions in
writing in advance of the meeting by sending them to
info@charactergroup.plc.uk (mailto:info@charactergroup.plc.uk) (stating
"Character Group: 2023 AGM Questions" in the subject line of the email) by
11:00 a.m. on 18 January 2023. The Board will seek to respond to questions
which are put forward in this way either in advance of the AGM, during the AGM
and/or by publishing written responses on the Company's website after the AGM,
together with results of voting. Although it will be possible to take
questions during the course of the meeting itself, time may not permit
responses to all of the questions to be given at the meeting and, in those
circumstances, written responses will be published on the Company's website
after the meeting.
OUTLOOK
As we anticipated at the time of the update in October 2022, trading
conditions have become more challenging and sales have slowed in the lead up
to Christmas. Whilst this has been a trend in both our domestic markets and
in our other major international markets, the effect has been particularly
discernible in the USA. In addition, the weakening of sterling in September
and October 2022 has continued to squeeze margins in our domestic markets.
These factors will adversely affect the Group's performance in the first half
of the current financial year. The slow-down in sales means the Group's
stock levels remain unseasonably high but the Board expects these will sell
through as it is largely current inventory.
The Group has a strong product offering for its markets going into 2023. The
recent previews and presentations of our 2023 ranges and new additions to our
retail and distribution customers have been very well received by customers.
The new ranges and additions include:
- new products under our multi-territory Stretch Armstrong product
range, including Star Wars and Transformers;
- a line of Teenage Mutant Ninja Turtles products from Playmates
International for domestic distribution in the UK and Ireland, to coincide
with a new Turtles movie to be released in the second half; and
- the distribution of exciting toy ranges from Bonkers Toys based on
the Aphmau and Lanky Box brands established by two influencer concepts that
have generated large followings on social media and created YouTube stars.
International sales, other than those to USA, are forecast to grow
significantly in the second half of the current financial year. Although we
expect domestic sales to be flat in the second half, the substantial
reductions in freight rates, which have now returned to (if not reduced below)
pre-pandemic levels, together with reduced costs of production from factories
in China and strengthening of Sterling against the US Dollar from its recent
low point, should improve our margins. This is greatly heartening and has
given the Board considerable grounds for optimism for a second half rebound.
Character Group has a strong balance sheet and is debt-free, with cash and
considerable unutilised working capital facilities. The business continues
to trade satisfactorily and shall be profitable for the financial year as a
whole. The Board is, accordingly, committed to maintaining its progressive
dividend policy.
The Board looks forward to further updating shareholders at the time of its
forthcoming AGM on the outcome of the 2022 Christmas trading period.
22 December 2022
GROUP INCOME STATEMENT
for the year ended 31 August 2022
Note 12 months ended 12 months ended 12 months ended 12 months ended 12 months ended 12 months ended
31 August 31 August 31 August 31 August 31 August 31 August
2022 2022 2022 2021 2021 2021
Result before highlighted items Statutory Result before highlighted items highlighted items Statutory
highlighted items Result Result
£'000 £'000 £'000
£'000 £'000 £'000
Revenue 1 176,402 - 176,402 139,997 - 139,997
Cost of sales (135,036) - (135,036) (99,553) - (99,553)
Gross profit 41,366 - 41,366 40,444 - 40,444
Other income 502 - 502 332 - 332
Selling and distribution expenses (8,260) - (8,260) (8,248) - (8,248)
Administrative expenses (22,173) - (22,173) (21,301) - (21,301)
Profit on sale of property - - - - 2,016 2,016
Operating profit 2 11,435 - 11,435 11,227 2,016 13,243
Finance income 51 - 51 36 - 36
Finance costs (207) - (207) (113) - (113)
Changes in fair value of financial instruments - 159 159 - 2,128 2,128
Profit before tax 11,279 159 11,438 11,150 4,144 15,294
Income tax (2,018) (30) (2,048) (2,353) (737) (3,090)
Profit for the period 9,261 129 9,390 8,797 3,407 12,204
Attributable to:
Owners of the parent 9,390 12,156
Non-controlling interest - 48
Profit for the period 9,390 12,204
Earnings per share before highlighted items (pence)
Basic earnings per share 3 45.73p 40.92p
Diluted earnings per share 3 44.77p 40.37p
Earnings per share after highlighted items (pence)
Basic earnings per share 3 46.37p 56.86p
Diluted earnings per share 3 45.39p 56.09p
Dividend per share (pence) 4 16.0p 9.0p
EBITDA
(earnings before interest, tax, depreciation, amortisation and gain on
property disposal)
14,195 14,036
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 August 2022
Total Total
2022 2021
£000's £000's
Profit for the year after tax 9,390 12,204
Items that may be reclassified subsequently to profit and loss
Exchange differences on translation of foreign operations 1,070 -
Income tax on exchange differences 21 7
Other comprehensive income/(expense) for the year, net of income tax 1,091 7
Total comprehensive income for the year 10,481 12,211
Total comprehensive income for the year attributable to:
Equity holders of the parent 10,481 12,163
Non-controlling interest - 48
10,481 12,211
GROUP BALANCE SHEET
as at 31 August 2022
2022 2021
£000's £000's
Non - current assets
Intangible assets 1,963 1,806
Investment property 1,453 1,519
Property, plant and equipment 9,307 8,230
Right of use assets 1,216 1,454
Deferred tax assets 542 243
14,481 13,252
Current assets
Inventories 26,173 10,893
Trade and other receivables 24,728 26,019
Current income tax receivable 576 766
Derivative financial instruments 412 75
Cash and cash equivalents 26,646 35,920
78,535 73,673
Current liabilities
Short-term borrowings (6,627) -
Trade and other payables (42,151) (38,390)
Lease Liabilities (577) (557)
Income tax (3,345) (1,610)
Derivative financial instruments (343) (165)
(53,043) (40,722)
Net current assets 25,492 32,951
Non-current liabilities
Deferred tax (427) (405)
Lease liabilities (648) (946)
(1,075) (1,351)
Net assets 38,898 44,852
Equity
Called up share capital 1,074 1,181
Shares held in treasury (1,813) (1,870)
Capital redemption reserve 1,883 1,776
Share-based payment reserve 3,957 3,749
Share premium account 17,566 17,324
Merger reserve 651 651
Translation reserve 1,950 767
Profit and loss account 13,630 21,274
Attributable to equity holders of the parent 38,898 44,852
Total equity 38,898 44,852
GROUP CASH FLOW STATEMENT
as at 31 August 2022
Group
2022 2021
£000's £000's
Cash flow from operating activities 11,438 15,294
Profit before taxation for the year after highlighted items
Adjustments for:
Depreciation of property, plant and equipment 556 567
Depreciation of investment property 66 65
Depreciation of right of use assets 632 556
Amortisation of intangible assets 1,509 1,621
Write off plant and equipment - 132
(Profit) on disposal of property, plant and equipment (3) (2,028)
Net interest expense 156 77
Financial instruments fair value adjustments (159) (2,128)
Share-based payments 208 380
(Increase)/decrease in inventories (15,280) 3,853
Decrease / (increase) in trade and other receivables 1,291 (3,006)
Increase in trade and other creditors 3,761 11,957
Cash generated/(utilised) from operations 4,175 27,340
Finance income 51 36
Finance expense (207) (113)
Income tax paid (401) (1,788)
Net cash inflow/(outflow) from operating activities 3,618 25,475
Cash flows from investing activities
Purchase of business - (945)
Payments for intangible assets (1,666) (1,615)
Payments for property, plant and equipment (1,845) (7,128)
Proceeds from disposal of property, plant and equipment 225 3,458
Net cash outflow from investing activities (3,286) (6,230)
Cash flows from financing activities
Payment of lease liabilities (538) (606)
Proceeds from issue of share capital 299 -
Purchase of own shares for cancellation (13,640) -
Dividends paid (3,280) (1,924)
Net cash used in financing activities (17,159) (2,530)
Net (decrease)/increase in cash and cash equivalents (16,827) 16,715
Cash, cash equivalents and borrowings at the beginning of the year 35,920 19,124
Effects of exchange rate movements 926 81
Cash, cash equivalents and borrowings at the end of the year 20,019 35,920
Cash, cash equivalents and borrowings consist of:
Cash and cash equivalents 26,646 35,920
Total borrowings (6,627) -
Cash, cash equivalents and borrowings at the end of the year 20,019 35,920
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 31 August 2022
Called up share capital Shares held in treasury Capital Share premium account Merger reserve Share-based payment reserve Profit Total
£000's £000's redemption £000's £000's £000's Translation reserve and loss account Non-controlling interest £000's
reserve £000's £000's £000's
£000's
The Group
At 1 September 2020 1,181 (1,870) 1,776 17,324 651 3,369 727 11,231 (343) 34,046
Profit for the year after tax 12,156 48 12,204
Other comprehensive income/(expense)
Net exchange differences on translation of foreign operations - - - - - - 40 (28) (5) 7
Total other comprehensive expense 40 (28) (5) 7
Total comprehensive income for the year 40 12,128 43 12,211
Transactions with owners, recorded directly in equity
Change in non controlling interest - - - - - - - (300) 300 -
Share-based payment - - - - - 380 - - - 380
Deferred tax debit relating to share options - - - - - - - 139 - 139
Dividends - - - - - - - (1,924) - (1,924)
At 31 August 2021 1,181 (1,870) 1,776 17,324 651 3,749 767 21,274 - 44,852
Profit for the year after tax 9,390 9,390
Other comprehensive income/(expense)
Net exchange differences on translation of foreign operations - - - - - - 1,183 (92) - 1,091
Total other comprehensive expense 1,183 (92) - 1,091
Total comprehensive income for the year 1,183 9,298 - 10,481
Transactions with owners, recorded directly in equity
Share-based payment - - - - - 208 - - - 208
Current tax credit relating to exercised share options - - - - - - - 18 - 18
Deferred tax debit relating to share options - - - - - - - (40) - (40)
Dividends - - - - - - - (3,280) - (3,280)
Shares Issued - 57 - 242 - - - - - 299
Tender offer fees - - - - - - - (142) - (142)
Shares cancelled on tender offer (107) - 107 - - - - (13,498) - (13,498)
At 31 August 2022 1,074 (1,813) 1,883 17,566 651 3,957 1,950 13,630 - 38,898
The financial statements were approved by the Board of Directors on 21
December 2022, and were signed on its behalf by:
J J Diver K P Shah
Joint Managing Director Joint Managing Director and Group Finance Director
NOTES
1. GEOGRAPHICAL DESTINATION OF REVENUE
31 August 2022 31 August 2021
£000's £000's
United Kingdom 84,605 79,509
Rest of the world 91,797 60,488
Total Group 176,402 139,997
2. EXPENSES BY NATURE - Group
12 months to 12 months to
31 August 2022 31 August 2021
£000's £000's
Operating profit is stated after charging/(crediting):
Cost of inventories recognised as an expense (included in cost of sales) 117,586 88,729
Product development costs incurred 1,957 1,736
Product development costs capitalised (1,666) (1,615)
Amortisation of capitalised product development costs 1,489 1,619
Product development costs expensed to cost of sales 1,780 1,740
(Credit)/debit financial instruments fair value adjustments (159) (2,218)
Inventories debit / (credit) 634 (1,022)
Exchange losses 2,406 130
Staff costs 15,171 13,958
Depreciation of tangible fixed assets
- owned assets 556 567
Depreciation of investment property 66 65
(Profit)/loss on disposal of property, plant and equipment (3) (2,028)
Depreciation - right of use assets 632 556
Auditor's remuneration 160 141
3. Earnings per share - group
The earnings used in the calculation of basic and diluted earnings per share
are as follows:
Year ended 31 August 2022 Year ended 31 August 2021
Profit after taxation Profit after taxation
£ £
Profit attributable to equity shareholders of the parent 9,390,000 12,156,000
Financial instruments fair value adjustments net of tax (129,000) (1,724,000)
Profit on sale of property net of tax - (1,683,000)
Profit for adjusted earnings per share 9,261,000 8,749,000
Weighted average number of ordinary shares in issue during the year - basic 21,379,781
Weighted average number of dilutive potential ordinary shares 20,251,532 291,974
436,409
Weighted average number of ordinary shares for diluted earnings per share 20,687,941 21,671,755
Earnings per share before highlighted items 45.73p 40.92p
Basic earnings per share (pence)
Diluted earnings per share (pence) 44.77p 40.37p
Earnings per share after highlighted items 46.37p 56.86p
Basic earnings per share (pence)
Diluted earnings per share (pence) 45.39p 56.09p
4. DIVIDEND - group
12 months to 12 months to
31 August 2022 31 August 2021
£000's £000's
On equity shares:
Final dividend paid for the year ended 31 August 2021
9.0 pence (2020: 3.0 pence) per share 1,929 642
Interim dividend paid for the year ended 31 August 2022
7.0 pence (2021: 6.0 pence) per share 1,351 1,282
16.0 pence (2021: 9.0 pence) per share 3,280 1,924
The directors recommend a final dividend of 10.0 pence per share (2021: 9.00
pence) amounting to £1,930,745(2021: £1,924,000). If approved by
shareholders, the final dividend will be paid on 27 January 2023 to
shareholders on the register on 13 January 2023.
5. ANNUAL REPORT AND ACCOUNTS
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the years ended 31 August 2022 and 2021.
The financial information for the year ended 31 August 2021 is derived from
the statutory accounts for that year which have been delivered to the
Registrar of Companies. The financial information for the year ended 31
August 2022 is derived from the statutory accounts for that year and those
accounts have today been published and may be viewed and/or downloaded from
the Company's website at www.thecharacter.com. The auditors reported on each
of those accounts: their report was unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under s498(2) or
(3) of the Companies Act 2006. The audited statutory accounts for the year
ended 31 August 2022 will be delivered to the Registrar of Companies following
the Company's Annual General Meeting.
6. ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 2(nd) Floor, 86-88 Coombe Road, New
Malden, Surrey KT3 4QS on Friday, 20 January 2023 at 11.00am.
7. ELECTRONIC COMMUNICATIONS
The full Financial Statements for the year ended 31 August 2022, incorporating
the Notice of Meeting convening the Company's 2023 Annual General Meeting, is
available for viewing on and download from the Group's website:
www.character.com (http://www.character.com)
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