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RNS Number : 9221I Character Group PLC (The) 16 May 2025
The information contained within this announcement is deemed by the Company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via the Regulatory Information Service, this inside information
is now considered to be in the public domain.
LONDON, FRIDAY, 16 MAY 2025
The Character Group plc
(the "Company" or "Group" or Character")
Designers, developers and international distributor of toys, games and
giftware
HALF-YEAR FINANCIAL REPORT
for the six months ended 28 February 2025
KEY PERFORMANCE INDICATORS Six months Six months 12 months
CONTINUING OPERATIONS ended ended ended
28 February 29 February 31 August
2025 2024 2024
(unaudited) (unaudited) (audited)
Revenue £53.0m £57.6m £123.4m
Pre-tax profit before highlighted items* £2.1m £2.1m £6.6m
Underlying basic earnings per share before highlighted items* 8.59p 8.72p 29.76p
Diluted earnings per share before highlighted items* 8.59p 8.71p 29.72p
Profit before tax £3.2m £2.2m £5.7m
Basic earnings per share 12.84p 9.31p 25.96p
Diluted earnings per share 12.84p 9.30p 25.92p
Dividend per share (declared) 3.0p 8.0p 19.0p
EBITDA £3.7m £3.7m £10.1m
Cash and cash equivalents £16.0m £12.9m £13.2m
Net assets £38.7m £38.7m £38.6m
*Excludes
Mark to market profit/(loss) adjustments on FX derivative positions £1.1m £0.2m £(1.0m)
FTSE sector: leisure: FTSE AIM All-share: symbol: CCT: Market cap: £46.5m
Copies of this statement can be viewed at www.thecharacter.com
(http://www.thecharacter.com) .
Product ranges can also be viewed at www.character-online.co.uk
(http://www.character-online.co.uk) .
ENQUIRIES:
The Character Group plc
Jon Diver, Joint Managing Director
Kiran Shah, Joint Managing Director
Hamun Shah, Group Finance Director
Office: +44 (0) 208 329 3377
Email: info@charactergroup.plc.uk (mailto:info@charactergroup.plc.uk)
Panmure Liberum Limited
(Nominated Adviser and Joint Broker)
Atholl Tweedie, Investment Banking
Rupert Dearden, Corporate Broking
Tel: +44 (0) 20 7886 2500
Allenby Capital Limited
(Joint Broker)
Nick Athanas, Corporate Finance
Amrit Nahal / Tony Quirke, 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)
The Character Group plc
(the "Company" or "Group" or "Character")
Designers, developers and international distributor of toys, games and
giftware
HALF-YEAR FINANCIAL REPORT
for the six months ended 28 February 2025
The Group's performance in maintaining profits and cash flow in the first half
year period reflects the strength, depth and quality of our current portfolio
of products.
Although Group revenue in the first half of the current financial year was c.
8% lower than 2024 at £53.0m (HY 2024 £57.6m), gross margins improved by 2.1
basis points to 29.3%, delivering pre-tax profits (before highlighted items)
in line with those reported at the halfway point in 2024. The Group has
continued to generate cashflow in the period and, as at 28 February 2025, had
net cash balances of £16m (2024: £12.9m) and no long-term debt.
Overall, despite the harsh trading conditions experienced in the lead up to
and through the all-important Christmas period, the Group's performance is
testimony to the management's ability to read the market and produce and
distribute products that capture the imagination of, and enable quality play
by, the children that ultimately determine the success or failure of toy
products.
GROUP TRADING
Revenue in the period at £53.0m was down against the comparable period last
year (HY 2024: £57.6m; FY 2024: £123.4m).
Despite the reduction in HY1 sales, the Group is reporting a profit before tax
and highlighted items of £2.1m (HY 2024: £2.1m; FY 2024: £6.6m), which is
comparable to its performance in the first half 2024.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were
£3.7m (HY 2024 £3.7m; FY 2024: £10.1m).
Gross profit margin in the first half improved to 29.3%, compared to 27.2% in
the same 2024 period and 26.5% for the 2024 financial year.
Underlying basic earnings per share before highlighted items were 8.59p (HY
2024: 8.72p; FY 2024: 29.76p). Diluted earnings per share, on the same basis,
were 8.59p (HY 2023: 8.71p; FY 2024: 29.72p).
A significant proportion of the Group's purchases are made in US dollars. The
business 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 the financial period under review results in a profit of
£1.1m. This compares to a profit of £0.2m shown in the corresponding period
in 2024 and a loss of £0.97m reported in the year to 31 August 2024. These
'mark to market' adjustments are non-cash items, calculated by reference to
unpredictable and sometimes volatile currency spot rates at the respective
balance sheet dates. To present the results on a "normal" basis, these "mark
to market" adjustments on FX derivative positions are excluded, although shown
separately as "highlighted items" to demonstrate the "underlying" position.
FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW
The Group's net assets at 28 February 2025 were £38.7m (HY 2024: £38.7m; FY
2024: £38.6m). The Group generated cash from operations of £6.7m (HY 2024:
£10.1m ; FY 2024: £14.9m ).
Inventories at the same date stood at £12.7m (HY 2024: £11.7m; FY 2024;
£20.1m).
The Group has no long-term debt. At the end of the first half, net interest
income was £0.1m (HY 2024: negligible; FY 2024: £0.1m). After making
dividend payments of £2.05m and financing share buybacks of £0.86m, the
Group had cash and cash equivalents of £16.0m at 28 February 2025 (HY 2024:
£12.9m; FY 2024: £13.2m). In addition, the Group had unutilised headroom of
over £50m under its banking and other finance facilities.
DIVIDEND
Taking account of the current uncertainty, the Board is declaring a reduced
dividend at this interim stage of 3.0p per share (HY 2024: 8.0p; final
dividend 2024: 11.0p). The dividend is covered approximately 2.86 times by
underlying earnings per share.
The interim dividend will be paid on 25 July 2025 to shareholders on the
register as at the close of business on 11 July 2025. The shares will be
marked ex-dividend on 24 July 2025.
SHARE BUYBACK PROGRAMME
Shareholders passed a resolution at the 2025 Annual General Meeting
authorising the Company to effect share buybacks (including by way of tender
offers) of up to 2,815,000 issued ordinary shares of 5p each in the Company
("Ordinary Shares"). The Company announced a £2.0 million share buyback
programme on 29 October 2024. The Company has successfully bought back a
total of 530,899 Ordinary Shares at a total cost (including dealing costs) of
£1,376,529, leaving an unutilised capacity under the buyback programme of
£623,471. The programme will end on 30 May 2025 or sooner if the total buying
back under the scheme reaches £2.0 million (inclusive of the associated
dealing costs). If the target of £2.0 million has not been reached by 30 May
2025, it is the Board's intention to seek to agree an extension to the
programme with Panmure Liberum, the Company's broker who is conducting the
programme on its behalf. If agreed, details of any such extension will be
announced on or about 30 May 2025.
TOTAL VOTING RIGHTS (TVR)
As at today's date, the Company's issued share capital consists of 20,226,558
Ordinary Shares. The Company holds 1,983,059 Ordinary Shares in treasury which
do not carry voting rights and, accordingly, the total number of voting rights
in Character is 18,243,499. The figure of 18,243,499 may be used by
shareholders as the denominator for the calculations by which they will
determine if they are required to notify their interest, or change to their
interest, in the Company under the FCA's Disclosure Guidance and Transparency
Rules.
OUR PEOPLE
Once again on behalf of all stakeholders, the Board wants to thank everyone in
the business for their unwavering focus, dedication and commitment all of
which plays an important part in delivering the Group's goals despite
turbulent trading conditions.
As announced on 28 January 2025, Hamun Shah was promoted to the position of
Group Finance Director in succession to Kiran Shah, who continues in the role
as Joint Managing Director. The Board continues in its efforts to recruit a
further independent, non-executive director, following the retirement of Clive
Crouch at the 2025 AGM, and will update shareholders on the results of its
search in due course.
OUTLOOK
In the year ended 31 August 2024, sales to the USA amounted to c. 20% of Group
revenue, with substantially all of the Group's products sold in the USA being
manufactured in China. The significant increase in tariffs on imports to the
USA from China immediately put the contribution derived from these sales in
the second half of the year at risk as shipments were put on hold. As
announced in the Company's trading update on 11 April 2025, the Company has
withdrawn its market guidance for the year ending 31 August 2025 given the
uncertain impact on the Group of a volatile and evolving trade policy
landscape. The 90-day reduction in tariffs between the USA and China announced
on 11 May 2025 gives hope for a negotiated resolution, although this remains
uncertain at this time. The uncertainty flowing from the imposition of these
tariffs has been felt in other parts of the world as customers have become
increasingly cautious and are not committing to orders to our expectations.
This is impacting sales in all our key territories. Despite this, the Board
remains confident that the Group will be profitable in the current financial
year as a whole, although it is too early to forecast short to medium term
trading at this juncture.
The Group continues to have a strong balance sheet with healthy cash balances
and, with the strength of its portfolio of products, the Directors are
confident that the business can continue to ride out this current storm and
emerge in good shape.
16 May 2025
The Character Group plc
Consolidated Income Statement
six months ended 28 February 2025
six months ended six months ended six months ended six months ended six months ended six months ended 12 months ended 12 months ended 12 months ended
28 February 2025 28 February 2025 28 February 2025 29 February 2024 29 February 2024 29 February 2024 31 August 2024 31 August 2024 31 August 2024
Result before *highlighted items *highlighted items Result Result before *highlighted items *highlighted items Result Result before *highlighted items *highlighted items Statutory
(unaudited) (unaudited) (audited) Result
£'000 (unaudited) £'000 (unaudited) £'000 (audited)
£'000 (unaudited) £'000 (unaudited) £'000 (audited)
£'000 £'000 £'000
Revenue 53,019 - 53,019 57,615 - 57,615 123,419 - 123,419
Cost of sales (37,508) - (37,508) (41,926) - (41,926) (90,668) - (90,668)
Gross profit 15,511 - 15,511 15,689 - 15,689 32,751 - 32,751
Other income 154 - 154 121 - 121 547 - 547
Selling and distribution expenses (4,128) - (4,128) (3,821) - (3,821) (6,417) - (6,417)
Administrative expenses (9,535) - (9,535) (9,913) - (9,913) (20,335) - (20,335)
Operating profit 2,002 - 2,002 2,076 - 2,076 6,546 - 6,546
Finance income 151 - 151 58 - 58 184 - 184
Finance costs (43) - (43) (60) - (60) (81) - (81)
Changes in fair value of financial instruments - 1,060 1,060 - 154 154 - (966) (966)
Profit/(loss) before tax 2,110 1,060 3,170 2,074 154 2,228 6,649 (966) 5,683
Income tax (506) (265) (771) (387) (39) (426) (973) 242 (731)
Profit/(loss) for the period 1,604 795 2,399 1,687 115 1,802 5,676 (724) 4,952
*highlighted items comprise material items that are disclosed separately by
virtue of their size or incidence and because they are considered relevant to
an understanding of the overall performance of the Company.
The Character Group plc
Consolidated Income Statement
six months ended 28 February 2025
Notes six months ended six months ended 12 months ended
28 February 2025 29 February 2024 31 August 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Attributable to:
Owners of the parent
Profit for the period 2,399 1,802 4,952
Earnings per share before highlighted items (pence) 4
Basic earnings per share 8.59p 8.72p 29.76p
Diluted earnings per share 8.59p 8.71p 29.72p
Earnings per share after highlighted items (pence) 4
Basic earnings per share 12.84p 9.31p 25.96p
Diluted Earnings per share 12.84p 9.30p 25.92p
Dividend per share (pence) 3 11.00p 11.00p 19.0p
EBITDA 3,680 3,748 10,063
(earnings before interest, tax, depreciation and amortisation)
The Character Group plc
Consolidated Statement of Comprehensive Income
six months ended 28 February 2025
six months ended six months ended 12 months ended
28 February 2025 29 February 2024 31 August 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit for the period after tax 2,399 1,802 4,952
Items that may be reclassified subsequently to profit and loss 313 323 (151)
Net exchange differences on translation of foreign operations
Total comprehensive Income for the period 2,712 2,125 4,801
Total comprehensive income for the period attributable to:
Equity holders of the parent 2,712 2,125 4,801
The Character Group plc
Consolidated Balance Sheet
at 28 February 2025
28 February 2025 29 February 31 August
(unaudited) 2024 2024
£'000 (unaudited) (audited)
£'000 £'000
Non-current assets
Intangible assets 1,334 1,947 1,618
Investment property 1,290 1,355 1,323
Property, plant and equipment 10,245 9,943 10,065
Right of use assets 638 440 836
Deferred tax assets 384 405 993
13,891 14,090 14,835
Current assets
Inventories 12,676 11,735 20,103
Trade and other receivables 8,656 13,445 23,991
Current income tax receivable 564 1,395 591
Derivative financial instruments 355 157 16
Cash and cash equivalents 16,305 13,424 14,599
38,556 40,156 59,300
Current liabilities
Short term borrowings (349) (482) (1,446)
Trade and other payables (11,445) (13,820) (31,197)
Lease liabilities (620) (351) (438)
Income tax payable (302) - (192)
Derivative financial instruments (702) (443) (1,424)
(13,418) (15,096) (34,697)
Net current assets 25,138 25,060 24,603
Non - current liabilities
Deferred tax (302) (345) (377)
Lease liabilities (45) (82) (431)
(347) (427) (808)
Net assets 38,682 38,723 38,630
Equity
Called up share capital 1,022 1,061 1,038
Shares held in treasury (1,664) (1,762) (1,756)
Capital redemption reserve 1,935 1,896 1,919
Share based payment reserve 4,247 4,216 4,231
Share premium account 17,902 17,751 17,761
Merger reserve 651 651 651
Translation reserve 1,112 1,046 698
Profit and loss account 13,477 13,864 14,088
Total equity attributable to equity holders of the parent 38,682 38,723 38,630
The Character Group plc
Consolidated Statement of Cash Flows
six months ended 28 February 2025
six months ended six months 12 months
28 February ended ended
2025 29 February 31 August
(unaudited) 2024 2024
£'000 (unaudited) (audited)
£'000 £'000
Cash flow from operating activities
Profit before taxation for the period 3,170 2,228 5,683
Adjustments for:
Depreciation of property, plant and equipment 417 402 833
Depreciation of investment property 33 33 65
Depreciation of right of use assets 264 261 536
Amortisation of intangible assets 963 982 2,096
Loss/(profit) on disposal of property, plant and equipment 1 (3) (13)
(Profit) on derecognition of right of use assets - (3) -
Interest (income)/expense (108) 2 (103)
Financial instruments fair value adjustments (1,060) (154) 966
Share based payments 16 55 70
Decrease/(increase) in inventories 7,427 6,220 (2,148)
Decrease in trade and other receivables 15,335 13,251 2,705
(Decrease)/increase in trade and other creditors (19,752) (13,125) 4,252
Cash generated from operations 6,706 10,149 14,942
Interest received/(paid) 108 (2) 103
Income tax paid (67) (3,118) (3,028)
Net cash inflow from operating activities 6,747 7,029 12,017
Cash flows from investing activities
Payments for intangible assets (679) (592) (1,376)
Payments for property, plant and equipment (593) (336) (858)
Proceeds from disposal of property, plant and equipment - 3 14
Net cash outflow from investing activities (1,272) (925) (2,220)
Cash flows from financing activities
Payment of leasing liabilities (243) (268) (555)
Proceeds from issue of share capital 233 - 16
Purchase of own shares for cancellation (857) (692) (2,000)
Dividends paid (2,052) (2,130) (3,623)
Net cash used in financing activities (2,919) (3,090) (6,162)
Net increase in cash and cash equivalents 2,556 3,014 3,635
Cash, cash equivalents and borrowings at the beginning of the period 13,153 9,610 9,610
Effects of exchange rate movements 247 318 (92)
Cash, cash equivalents and borrowings at the end of the period 15,956 12,942 13,153
Cash, cash equivalents and borrowings consist of:
Cash, cash equivalents 16,305 13,424 14,599
Short term borrowings (349) (482) (1,446)
Cash, cash equivalents and borrowings at the end of the period 15,956 12,942 13,153
The Character Group plc
Consolidated Statement of Changes in Equity
six months ended 28 February 2025
Called up share capital Shares held in treasury Capital redemption reserve Share premium account Share based payment Profit
£'000 £'000 £'000 £'000 Merger reserve £'000 Translation reserve and loss
£'000 £'000 account Total
£'000 £'000
At 31 August 2023 1,074 (1,762) 1,883 17,751 651 4,161 971 14,636 39,365
(audited)
Profit for the period - - - - - - - 1,802 1,802
Exchange differences on translation of foreign operations - - - - - - 75 248 323
Total comprehensive income for the period - - - - - - 75 2,050 2,125
Transactions with owners
Share based payment - - - - - 55 - - 55
Dividend paid - - - - - - - (2,130) (2,130)
Shares cancelled (13) - 13 - - - - (692) (692)
Six months ended 1,061 (1,762) 1,896 17,751 651 4,216 1,046 13,864 38,723
29 February 2024
Balance as at 1,074 (1,762) 1,883 17,751 651 4,161 971 14,636 39,365
1 September 2023
(audited)
Profit for the year after tax - - - - - - - 4,952 4,952
Net exchange differences on translation of foreign operations - - - - - - (273) 122 (151)
Total comprehensive income/(expense) for the year - - - - - - (273) 5,074 4,801
Transactions with owners
Share based payment - - - - - 70 - - 70
Deferred tax relating to share options - - - - - - - 1 1
Dividends - - - - - - - (3,623) (3,623)
Shares issued - 6 - 10 - - - - 16
Shares cancelled (36) - 36 - - - - (2,000) (2,000)
At 31 August 2024 1,038 (1,756) 1,919 17,761 651 4,231 698 14,088 38,630
(audited)
Profit for the period - - - - - - - 2,399 2,399
Exchange differences on translation of foreign operations - - - - - - 414 (101) 313
Total comprehensive income for the period - - - - - - 414 2,298 2,712
Transactions with owners
Share based payment - - - - - 16 - - 16
Dividend paid - - - - - - - (2,052) (2,052)
Shares issued - 92 - 141 - - - - 233
Shares cancelled (16) - 16 - - - - (857) (857)
Six months ended 1,022 (1,664) 1,935 17,902 651 4,247 1,112 13,477 38,682
28 February 2025
The Character Group plc
Notes to the Financial Statements
1. Basis of Preparation
The financial information set out in this Half-Year Financial Report for the
six months ended 28 February 2025 has been prepared under International
Financial Reporting Standards (IFRS) as adopted by the European Union and in
accordance with the accounting policies which will be adopted in presenting
the Group's Annual Report and Financial Statements for the year ending 31
August 2025. These are consistent with the accounting policies used in the
financial statements for the year ended 31 August 2024 as described in those
annual financial statements.
As permitted, this Half-Year Financial Report has been prepared in accordance
with the AIM rules and not in accordance with IAS 34 'Interim Financial
Reporting'.
The consolidated financial statements are prepared under the historical cost
convention, as modified by the revaluation of certain financial instruments
and share based payments at fair value.
These Half-Year Financial Statements and the financial information do not
constitute full statutory accounts within the meaning of section 434 of the
Companies Act 2006 and are unaudited. These unaudited Half-Year Financial
statements were approved by the Board of Directors on 15 May 2025.
The information for the year ended 31 August 2024 is based on the consolidated
financial statements for that year on which the Group's auditor's report was
unqualified and did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
2. Going concern
The Directors acknowledge the Financial Reporting Council's 'Guidance on the
going concern basis of accounting and reporting on solvency and liquidity
risks' issued in April 2016.
In assessing the Group and Company's ability to continue as a going concern,
the Board reviews and approves the annual budget and updated forecasts,
including forecasts of cash flows, borrowing requirements and headroom. The
Board reviews the Group's sources of available funds and the level of headroom
available against its committed borrowing facilities. The Group's financial
forecasts, taking into account possible sensitivities in trading performance
indicate that the Group will be able to operate within the level of its
committed borrowing facilities for the foreseeable future. The banks remain
supportive of the Group. The Directors have a reasonable expectation that the
Group and Company have adequate resources to continue their operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis of accounting in preparing the Interim report.
3. Dividends
six months ended six months ended 12 months ended
28 February 2025 29 February 2024 31 August 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
On equity shares:
Final dividend paid for the year ended 31 August 2024
- 11.00p (2023: 11.00p) per share 2,052 2,130 2,130
Interim dividend for the year ended 31 August 2024
- 8.00p per share - - 1,493
2,052 2,130 3,623
4. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
during the period.
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
dilutive potential ordinary shares. The Group has one (2024: 1) category of
dilutive potential ordinary shares, being share options granted where the
exercise price is less than average price of the Company's ordinary shares
during this period.
An adjusted earnings per share has also been calculated as, in the opinion of
the Directors, this will allow shareholders to gain a clearer understanding of
the trading performance of the Group.
The calculations are based on the following:
six months ended six months ended 12 months ended
28 February 2025 29 February 2024 31 August 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit attributable to equity shareholders of the parent 2,399 1,802 4,952
Financial instruments fair value adjustments net of tax (795) (115) 724
Profit for adjusted earnings per share 1,604 1,687 5,676
Weighted average number of shares
In issue during the year - basic 18,677,989 19,349,512 19,072,573
Dilutive potential ordinary shares 2,314 25,359 28,775
Weighted average number of ordinary for diluted earnings per share
18,680,303 19,374,871 19,101,348
Earnings per share
Basic earnings per share (pence) 12.84 9.31 25.96
Diluted earnings per share (pence) 12.84 9.30 25.92
Adjusted earnings per share
Basic earnings per share (pence) 8.59 8.72 29.76
Diluted earnings per share (pence) 8.59 8.71 29.72
5. Electronic Communications
The Half-Year Financial Report for the six months ended 28 February 2025 will
shortly be available for viewing and download on the Group's website:
www.thecharacter.com (http://www.thecharacter.com) .
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