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REG - Character Group PLC - Half-Year Financial Report - six months to 29.2.24

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RNS Number : 7201N  Character Group PLC  09 May 2024

 

 

LONDON, THURSDAY, 9 MAY 2024

 

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.

 

 

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 29 February 2024

 

 

 KEY PERFORMANCE INDICATORS                                     Six months    Six months    12 months

 CONTINUING OPERATIONS                                          ended         ended         ended

                                                                29 February   28 February   31 August

                                                                2024          2023          2023

                                                                (unaudited)   (unaudited)   (audited)
 Revenue                                                        £57.6m        £57.9m        £122.6m

 Operating profit before highlighted items*                     £2.1m         £0.6m         £5.3m
 Pre-tax profit before highlighted items*                       £2.1m         £0.5m         £5.2m
 Underlying basic earnings per share before highlighted items*  8.72p         0.54p         20.15p
 Diluted earnings per share before highlighted items*           8.71p         0.54p         20.00p

 Profit before tax                                              £2.2m         £0.2m         £4.7m
 Basic profit/(loss) per share                                  9.31p         (0.85p)       18.08p
 Diluted profit/(loss) per share                                9.30p         (0.85p)       17.95p

 Dividend per share (declared)                                  8.0p          8.0p          19.0p
 EBITDA                                                         £3.7m         £2.7m         £8.9m
 Cash and cash equivalents                                      £12.9m        £10.7m        £9.6m
 Net assets                                                     £38.7m        £37.1m        £39.4m

 

 *Excludes
 Mark to market profit/(loss) adjustments on FX derivative positions  £0.2m   £(0.3m)   £(0.5m)

 

 

 

"We have been encouraged by the enthusiasm with which our product portfolio
has been received by our customers.  The industry buzz around some of our new
releases, such as Terror Fried, and new additions to our established lines,
like Goo Jit Zu, is very encouraging too."

 

"The Group has a strong portfolio of products, underpinned by a strong balance
sheet, and has a net cash position with substantial unutilised working capital
facilities in place.  On the back of our first half-year's performance and
these signs of the Group's robust health, we anticipate profit before tax and
highlighted items in respect of the full year to 31 August 2024 will exceed
current market expectations.  The Board is comfortable that the Group is on
course to meet its targets."

 

 

 FTSE sector: leisure: FTSE AIM All-share: symbol: CCT: Market cap: £52.16m

 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
 (https://www.character-online.com/) .

 

 

 ENQUIRIES:
 The Character Group plc

 Jon Diver, Joint Managing Director

 Kiran Shah, Joint Managing 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)

 Panmure Gordon

 (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 29 February 2024

 

 

 

INTRODUCTION

As indicated in our trading update in January 2024, we are pleased to report
that the pre-tax profit (excluding highlighted items) for the six months ended
29 February 2024 has increased to £2.1m compared to the previous half year of
£0.5m.  This increase in profit is despite the turnover remaining constant
at £57.6m.

 

During the half-year, we have also managed to reduce the inventory levels by
£6.4m to £11.7m (HY 2023: £18.1m).  Cash generated from operations
amounted to £10.1m (HY 2023: cash utilisation £2.8m).  The cash balance at
29 February 2024, after paying dividends of £2.1m and financing share
buy-backs during the period of £0.7m, totalled £12.9m (2023: £10.7m).

 

The Group continues to have a robust balance sheet with substantial unutilised
working capital facilities.

 

GROUP TRADING

Revenue in the period at £57.6m was consistent with the comparable period
last year (HY 2023: £57.9m; FY 2023: £122.6m).

 

The Group reported profit before tax and highlighted items of £2.1m (HY 2023:
£0.5m; FY 2023: £5.2m), the increase in profit being mainly due to reduced
selling and distribution costs.  This primarily related to the logistics
costs associated with the Group's Scandinavian business being lower, as
inventory was significantly reduced from last year, and increased influencer
sales in our UK domestic market producing a lower advertising to sales ratio.

 

Earnings before interest, tax, depreciation and amortisation (EBITDA) were
£3.7m (HY 2023 £2.7m; FY 2023: £8.9m).

 

Gross profit margin in the period improved slightly to 27.2%, compared to
26.9% in the same six month period in 2023 and 26.7% for the August 2023
financial year.

 

Underlying basic earnings per share before highlighted items improved to 8.72p
(HY 2023: 0.54p; FY 2023: 20.15p).  Diluted earnings per share, on the same
basis, were 8.71p (HY 2023: 0.54p; FY 2023: 20.00p).

 

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
£0.2m.  This compares to a loss of £0.3m shown in the corresponding period
in 2023 and a loss of £0.5m reported in the year ended 31 August 2023.
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 29 February 2024 were £38.7m (HY 2023: £37.1m; FY
2023: £39.4m).  During the period, the Group generated cash from operations
of £10.1m (HY 2023: £2.8m cash utilisation; FY 2023: £0.1m cash
generated).  The Group's inventory stood at £11.7m (HY 2023: 18.1m; FY 2023;
£18.0m).

 

The Group has no long-term debt.  Net interest charges on the use of working
capital facilities during the period were negligible (HY 2023: £0.1m; FY
2023: £0.1m).  After dividend payments and financing of share buybacks, the
Group had cash and cash equivalents of £12.9m (HY 2023: £10.7m; FY 2023:
£9.6m) at the end of the half-year period.  In addition, the Group has
unutilised headroom of over £50.0m under its banking and other finance
facilities.

 

DIVIDEND

The Board remains committed to maintaining the dividend.  The Directors are,
therefore, declaring an interim dividend of 8.0p per share (HY 2023: 8.0p;
final dividend 2023: 11.0p).

The interim dividend will be paid on 26 July 2024 to shareholders on the
register as at the close of business on 12 July 2024.  The shares will be
marked ex-dividend on 11 July 2024.

SHARE BUYBACK PROGRAMME

Shareholders passed a resolution at the 2024 Annual General Meeting
authorising the Company to effect share buybacks (including by way of tender
offers) of up to 2,890,000 issued ordinary shares of 5p each in the Company
("Ordinary Shares").

 

On 6 February 2024, the Company announced a £1.0 million share buyback
programme as part of its strategy to reduce the Company's share capital.
Given the success in buying back 365,770 Ordinary Shares in just six weeks,
the Board resolved to extend the buyback by up to a further £1.0 million on 3
April 2024. The Company has successfully bought back a total of 500,888
Ordinary Shares at a total cost (excluding dealing costs) of £1.34 million,
leaving an unutilised capacity under the authority granted at the 2024 AGM of
2,389,112 Ordinary Shares.  The weighted average price paid per share is
£2.67.

 

The Company will continue to make regulatory announcements in respect of its
repurchases of Ordinary Shares, as required by UK MAR and the AIM Rules.

 

TOTAL VOTING RIGHTS (TVR)

As at today's date, the Company's issued share capital consists of 20,965,041
Ordinary Shares.  The Company holds 2,100,159 Ordinary Shares in treasury
which do not carry voting rights and, accordingly, the total number of voting
rights in Character is 18,864,882.  The figure of 18,864,882 may be used by
shareholders as the denominator for the calculations by which they will
determine, under the FCA's Disclosure Guidance and Transparency Rules, if they
are required to notify their interest, or change to their interest in the
Company.

 

OUR PEOPLE

We can never say enough about the unwavering commitment and dedication from
our personnel around the globe.  Through both good and challenging times,
they have maintained their enthusiasm, focus and 'can do' attitude in tackling
all obstacles encountered in recent years.  Their single-minded determination
is shared from the warehouse floor through to the boardroom, with each taking
inspiration from the selfless example of others in the quest to restore the
business to profitable growth.  We thank each and every one of them for their
support and belief in the Group's strategy and their diligence in implementing
it.

OUTLOOK

Following the launch of the Group's spring/summer catalogue, we have been
encouraged by the enthusiasm with which our product portfolio has been
received by our customers.  The industry buzz around some of our new
releases, such as Terror Fried, and new additions to our established lines,
like Goo Jit Zu, is very encouraging too.  We anticipate that the strength of
our offering will allow us to at least maintain our market share in our
domestic territories and increase international sales, particularly in the US.

 

The Group has a strong portfolio of products, underpinned by a strong balance
sheet, and has a net cash position with substantial unutilised working capital
facilities in place.  On the back of our first half-year's performance and
these signs of the Group's robust health, we anticipate profit before tax and
highlighted items in respect of the full year to 31 August 2024 will exceed
current market expectations.  The Board is comfortable that the Group is on
course to meet its targets.

The Company looks forward to updating shareholders on its progress in due
course.

 

9 May 2024

 

 

 The Character Group plc

 Consolidated Income Statement

 six months ended 29 February 2024

 

                                                 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

                                                  29 February 2024                       29 February 2024    29 February 2024      28 February 2023                       28 February 2023    28 February 2023        31 August 2023                    31 August 2023       31 August 2023

                                                 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                                         57,615                                 -                    57,615               57,887                                 -                    57,887                 122,591                            -                    122,591
 Cost of sales                                   (41,926)                               -                    (41,926)             (42,335)                               -                    (42,335)               (89,805)                           -                    (89,805)
 Gross profit                                    15,689                                 -                    15,689               15,552                                 -                    15,552                 32,786                             -                    32,786
 Other income                                    121                                    -                    121                  334                                    -                    334                    473                                -                    473
 Selling and distribution expenses               (3,821)                                -                    (3,821)              (5,825)                                -                    (5,825)                (8,534)                            -                    (8,534)
 Administrative expenses                         (9,913)                                -                    (9,913)              (9,429)                                -                    (9,429)                (19,425)                           -                    (19,425)
 Operating profit                                2,076                                  -                    2,076                632                                    -                    632                    5,300                              -                    5,300
 Finance income                                  58                                     -                    58                   75                                     -                    75                     173                                -                    173
 Finance costs                                   (60)                                   -                    (60)                 (164)                                  -                    (164)                  (269)                              -                    (269)
 Changes in fair value of financial instruments  -                                      154                  154                  -                                      (342)                (342)                  -                                  (510)                (510)
 Profit/(loss) before tax                        2,074                                  154                  2,228                543                                    (342)                201                    5,204                              (510)                4,694
 Income tax                                      (387)                                  (39)                 (426)                (438)                                  73                   (365)                  (1,305)                            110                  (1,195)
 Profit/(loss) for the period                    1,687                                  115                  1,802                105                                    (269)                (164)                  3,899                              (400)                3,499

 

 *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 29 February 2024

 

 

 

                                                                  Notes   six months ended    six months ended    12 months ended

                                                                         29 February 2024     28 February 2023    31 August 2023

                                                                         (unaudited)         (unaudited)          (audited)

                                                                         £'000               £'000                £'000
 Attributable to:
 Owners of the parent
 Profit/(loss) for the period                                            1,802               (164)                3,499
 Earnings per share before highlighted items (pence)              4
 Basic earnings per share                                                8.72p               0.54p                20.15p
 Diluted earnings per share                                              8.71p               0.54p                20.00p
 Earnings per share after highlighted items (pence)               4
 Basic earnings/(loss) per share                                         9.31p               (0.85p)              18.08p
 Diluted Earnings/(loss) per share                                       9.30p               (0.85p)              17.95p

 Dividend per share (pence)                                       3      11.00p              10.00p               18.0p

 EBITDA                                                                  3,748               2,694                8,888

 (earnings before interest, tax, depreciation and amortisation)

 

 

 

The Character Group plc

Consolidated Statement of Comprehensive Income

six months ended 29 February 2024

 

 

 

                                                                                                 six months ended    six months ended    12 months ended

                                                                                                 29 February 2024    28 February 2023     31 August 2023

                                                                                                 (unaudited)        (unaudited)          (audited)

                                                                                                 £'000              £'000                £'000
 Profit/(loss) for the period after tax                                                          1,802              (164)                3,499
 Items that may be reclassified subsequently to profit and loss                                  323                98                   120

 Net exchange differences on translation of foreign operations
 Total comprehensive Income/(loss) for the period                                                2,125              (66)                 3,619

 Total comprehensive income for the period attributable to:
 Equity holders of the parent                                                                    2,125              (66)                 3,619

 

 

 The Character Group plc

 Consolidated Balance Sheet

 at 29 February 2024

 

 

 

                                                                29 February 2024  28 February   31 August

                                                                (unaudited)       2023           2023

                                                                £'000             (unaudited)   (audited)

                                                                                  £'000         £'000
 Non-current assets
 Intangible assets                                              1,947             1,955         2,338
 Investment property                                            1,355             1,420         1,388
 Property, plant and equipment                                  9,943             9,915         10,009
 Right of use assets                                            440               1,098         747
 Deferred tax assets                                            405               450           525
                                                                14,090            14,838        15,007
 Current assets
 Inventories                                                    11,735            18,133        17,955
 Trade and other receivables                                    13,445            12,141        26,696
 Current income tax receivable                                  1,395             498           717
 Derivative financial instruments                               157               77            57
 Cash and cash equivalents                                      13,424            10,779        10,894
                                                                40,156            41,628        56,319
 Current liabilities
 Short term borrowings                                          (482)             (121)         (1,284)
 Trade and other payables                                       (13,820)          (15,886)      (26,945)
 Lease liabilities                                              (351)             (658)         (486)
 Income tax payable                                             -                 (1,367)       (2,117)
 Derivative financial instruments                               (443)             (350)         (498)
                                                                (15,096)          (18,382)      (31,330)
 Net current assets                                             25,060            23,246        24,989
 Non - current liabilities
 Deferred tax                                                   (345)             (492)         (367)
 Lease liabilities                                              (82)              (456)         (264)
                                                                (427)             (948)         (631)
 Net assets                                                     38,723            37,136        39,365
 Equity
 Called up share capital                                        1,061             1,074         1,074
 Shares held in treasury                                        (1,762)           (1,762)       (1,762)
 Capital redemption reserve                                     1,896             1,883         1,883
 Share based payment reserve                                    4,216             4,060         4,161
 Share premium account                                          17,751            17,751        17,751
 Merger reserve                                                 651               651           651
 Translation reserve                                            1,046             1,433         971
 Profit and loss account                                        13,864            12,046        14,636
 Total equity attributable to equity holders of the parent      38,723            37,136        39,365

 

 The Character Group plc

 Consolidated Statement of Cash Flows

 six months ended 29 February 2024

 

 

 

                                                                       six months ended  six months      12 months

                                                                       29 February       ended           ended

                                                                       2024               28 February     31 August

                                                                       (unaudited)       2023            2023

                                                                       £'000             (unaudited)     (audited)

                                                                                         £'000           £'000
 Cash flow from operating activities
 Profit before taxation for the period                                 2,228             201             4,694
 Adjustments for:
 Depreciation of property, plant and equipment                         402               341             791
 Depreciation of investment property                                   33                33              65
 Depreciation of right of use assets                                   261               321             609
 Amortisation of intangible assets                                     982               1,383           2,175
 (Profit) on disposal of property, plant and equipment                 (3)               (16)            (52)
 (Profit) on derecognition of right of use assets                      (3)               -               -
 Interest expense                                                      2                 89              96
 Financial instruments fair value adjustments                          (154)             342             510
 Share based payments                                                  55                103             204
 Decrease in inventories                                               6,220             8,040           8,218
 Decrease/(increase) in trade and other receivables                    13,251            12,587          (1,968)
 (Decrease) in trade and other creditors                               (13,125)          (26,265)        (15,206)
 Cash generated/(utilised) from operations                             10,149            (2,841)         136
 Interest paid                                                         (2)               (89)            (96)
 Income tax paid                                                       (3,118)           (2,206)         (3,014)
 Net cash inflow/(outflow) from operating activities                   7,029             (5,136)         (2,974)
 Cash flows from investing activities
 Payments for intangible assets                                        (592)             (1,376)         (2,550)
 Payments for property, plant and equipment                            (336)             (953)           (1,611)
 Proceeds from disposal of property, plant and equipment               3                 16              164
 Net cash outflow from investing activities                            (925)             (2,313)         (3,997)
 Cash flows from financing activities
 Payment of leasing liabilities                                        (268)             (332)           (671)
 Proceeds from issue of share capital                                  -                 236             236
 Purchase of own shares for cancellation                               (692)             -               -
 Dividends paid                                                        (2,130)           (1,937)         (3,486)
 Net cash used in financing activities                                 (3,090)           (2,033)         (3,921)
 Net increase/(decrease) in cash and cash equivalents                  3,014             (9,482)         (10,892)
 Cash, cash equivalents and borrowings at the beginning of the period  9,610             20,019          20,019
 Effects of exchange rate movements                                    318               121             483
 Cash, cash equivalents and borrowings at the end of the period        12,942            10,658          9,610

 

 

 Cash, cash equivalents and borrowings consist of:
 Cash, cash equivalents                                          13,424  10,779  10,894
 Short term borrowings                                           (482)   (121)   (1,284)
 Cash, cash equivalents and borrowings at the end of the period  12,942  10,658  9,610

The Character Group plc

Consolidated Statement of Changes in Equity

six months ended 29 February 2024

 

 

 

                                                                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
 Balance as at                                                  1,074                       (1,813)                     1,883                       17,566                 651                 3,957                   1,950                     13,630        38,898

 31 August 2022

 (audited)
 (Loss) for the period                                          -                           -                           -                           -                      -                   -                       -                         (164)         (164)
 Exchange differences on translation of foreign operations      -                           -                           -                           -                      -                   -                       (517)                     615           98
 Total comprehensive income/(expense) for the period            -                           -                           -                           -                      -                   -                       (517)                     451           (66)
 Transactions with owners
 Share based payment                                            -                           -                           -                           -                      -                   103                     -                         -             103
 Deferred tax relating to share options                         -                           -                           -                           -                      -                   -                       -                         (98)          (98)
 Dividend paid                                                  -                           -                           -                           -                      -                   -                       -                         (1,937)       (1,937)
 Shares issued                                                  -                           51                          -                           185                    -                   -                       -                         -             236
 Six months ended                                               1,074                       (1,762)                     1,883                       17,751                 651                 4,060                   1,433                     12,046        37,136

 28 February 2023
 Balance as at                                                  1,074         (1,813)                     1,883                                     17,566                 651       3,957                 1,950                    13,630              38,898

 1 September 2022

 (audited)
 Profit for the year after tax                                  -             -                           -                                         -                      -         -                     -                        3,499               3,499
 Net exchange differences on translation of foreign operations  -             -                           -                                         -                      -         -                     (979)                    1,099               120
 Total comprehensive income/(expense) for the year              -             -                           -                                         -                      -         -                     (979)                    4,598               3,619
 Transactions with owners
 Share based payment                                            -             -                           -                                         -                      -         204                   -                        -                   204
 Deferred tax relating to share options                         -             -                           -                                         -                      -         -                     -                        (106)               (106)
 Dividends                                                      -             -                           -                                         -                      -         -                     -                        (3,486)             (3,486)
 Shares issued                                                  -             51                          -                                         185                    -         -                     -                        -                   236
 At 31 August 2023                                              1,074         (1,762)                     1,883                                     17,751                 651       4,161                 971                      14,636              39,365

 (unaudited)
 Profit for the period                                          -             -                           -                                         -                      -         -                     -                        1,802               1,802
 Exchange differences on translation of foreign operations      -             -                           -                                         -                      -         -                     75                       248                 323
 Total comprehensive income/(expense) 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

 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 29 February 2024 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 2024.  These are consistent with the accounting policies used in the
 financial statements for the year ended 31 August 2023 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 8 May 2024.

 The information for the year ended 31 August 2023 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         six months         12 months

                                                           ended              ended              ended

                                                           29 February 2024   28 February 2023   31 August 2023

                                                           (unaudited)        (unaudited)        (audited)

                                                           £'000              £'000              £'000
 On equity shares:
 Final dividend paid for the year ended 31 August 2023
 -       11.00p (2022: 10.00p) per share                   2,130              1,937              1,937
 Interim dividend for the year ended 31 August 2023
 -       8.00p per share                                   -                  -                  1,549
                                                           2,130              1,937              3,486

 

 

 4.                                     Earnings per share
 Basic earnings/(loss) 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/(loss) 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 (2023: 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         six months         12 months

                                                                               ended              ended              ended

                                                                               29 February 2024   28 February 2023   31 August 2023

                                                                               (unaudited)        (unaudited)        (audited)

                                                                               £'000              £'000              £'000
 Profit/(loss) attributable to equity shareholders of the parent               1,802              (164)              3,499
 Financial instruments fair value adjustments net of tax                       (115)              269                400
 Profit for adjusted earnings per share                                        1,687              105                3,899
 Weighted average number of shares
 In issue during the year - basic                                              19,349,512         19,331,081         19,348,548
 Weighted average number of ordinary shares for basic and diluted loss per     -                  19,331,081         -
 share *(1)
 Dilutive potential ordinary shares                                            25,359             221,744            148,497
 Weighted average number of ordinary for diluted earnings per share

                                                                               19,374,871         19,552,825         19,497,045

 

*(1) The potential ordinary shares on exercise of share options are excluded
from the number of weighted average shares due to their anti-dilutive effect.

 

 Earnings/(loss) per share
 Basic earnings/(loss) per share (pence)    9.31  (0.85)  18.08
 Diluted earnings/(loss) per share (pence)  9.30  (0.85)  17.95

 

 Adjusted earnings per share
 Basic earnings per share (pence)    8.72  0.54  20.15
 Diluted earnings per share (pence)  8.71  0.54  20.00

 

 

 5.  Electronic Communications
 The Half-Year Financial Report for the six months ended 29 February 2024 will
 shortly be available for viewing and download on the Group's website:
 www.thecharacter.com (http://www.thecharacter.com) .

 

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.   END  IR EADSPEDXLEAA

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