REG - Character Group PLC - Half-Yearly Report-six months to 28 February 2022
12/05/2022 07:00
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RNS Number : 1988L Character Group PLC 12 May 2022
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, THURSDAY 12 MAY 2022
The Character Group plc
(the "Company" or "Group" or Character")
Designers, developers and international distributor of toys, games and
giftware
HALF YEARLY FINANCIAL REPORT
for the six months ended 28 February 2022
KEY PERFORMANCE INDICATORS Six months Six months Full-year
CONTINUING OPERATIONS ended ended ended
28 February 28 February 31 August
2022 2021 2021
Revenue £90.9m £74.5m £140.0m
Operating profit before highlighted items* £6.5m £6.1m £11.2m
Pre-tax profit before highlighted items* £6.5m £6.1m £11.1m
Basic earnings per share before highlighted items* 25.15p 23.00p 40.92p
Diluted earnings per share before highlighted items* 24.62p 22.93p 40.37p
Profit before tax £6.5m £7.6m £15.3m
Basic earnings per share 25.21p 28.76p 56.86p
Diluted earnings per share 24.68p 28.67p 56.09p
Dividend per share 7.0p 6.0p 15.0p
EBITDA £8.4m £7.9m £14.0m
Cash and cash equivalents (after a share buy-back of £13.6m) £21.5m £34.9m £35.9m
Net assets (after a share buy-back of £13.6m) £35.2m £39.6m £44.9m
*Excludes
Mark to market (loss)/profit adjustments on FX derivative positions - £(0.48)m £2.1m
Profit on sale of property - £2.02m £2.0m
· Against a backdrop of challenging operational conditions, the
Group has delivered a very solid result first half result
· Goo Jit Zu, our number 1 brand continues to sell well in UK and
internationally in over 30 countries. We are also seeing consistent growth
in other brands - Fireman Sam, Mashems, Jiggly Pets and Stretch Armstrong
· New exciting products launched at the London Toy Fair in January
2022 and being well received by our customers
· The Group's strategy is to increasingly develop its own products,
either under its own brands or under well-known marques licenced from global
brand owners. This strategy has enabled the Group to expand its global
sales.
"The momentum seen in sales in the first half is continuing, particularly in
the strong performance from our international FOB business. We remain
mindful, however, of the current difficult macro-economic conditions and the
recent weakness of Sterling. Like many others across the industry, we also
continue to experience inbound shipping delays and other operational
adversities due to continuing COVID-19 concerns, particularly in China.
Despite these challenges, we expect the profit before tax and highlighted
items for the full financial year ending 31 August 2022 to be in line with
market expectations."
FTSE sector: leisure: FTSE AIM All-share: symbol: CCT.L: Market cap:
£112.3m
Copies of this statement can be viewed at www.thecharacter.com
(http://www.thecharacter.com) . Product ranges can be viewed at
www.character-online.co.uk (http://www.character-online.co.uk) .
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
Charles Leigh-Pemberton / Rupert Dearden, Corporate Broking
Tel: +44 (0) 20 7886 2500
Allenby Capital Limited (Joint Broker)
Nick Athanas, Corporate Finance
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)
The Character Group plc
(the "Company" or "Group" or "Character")
Designers, developers and international distributor of toys, games and
giftware
HALF YEARLY FINANCIAL REPORT
for the six months ended 28 February 2022
INTRODUCTION
Against a backdrop of challenging operational conditions, the Group has
delivered a very solid result for the period under review.
The Group's income in the period was £90.9m, an increase of 22% over the same
six months in 2021 (HY 2021: £74.5m). This is a great achievement given the
global logistics challenges encountered in the first half, particularly in the
lead up to Christmas 2021. The profit before tax and highlighted items was
£6.5m, an increase of 7.7% over the same period in the previous year (HY
2021: £6.1m). The Group also generated cash of £3.4m from operations. At
the end of the period, cash at bank was £21.5m after a share buyback of
c.£13.6m.
COVID-19 concerns and effects remained at the core of the global supply chain
difficulties. Although the majority of countries where we sell or distribute
our products relaxed or even eliminated COVID-19 restrictions, the strict
controls applied in China, where almost all of the Group's manufacturing takes
place, resulted in delays in production at factories and shipping exports to
our global markets. Consequently, this led to extended lead times,
uncertainty over delivery dates and significant cost increases. In the UK,
the shortage of HGV driver capacity and delays at ports added to the
convolutions that all these factors have presented to the business.
Despite such difficulties, the business has traded well in the first six
months of the current financial year, as the Group's reported revenue
reflects, and the sales momentum is continuing into the second half.
GROUP TRADING
As stated, revenue in the period at £90.9m was up 22% on the comparable
period last year (HY 2021 £74.5m; FY 2021: £140.0m).
The Group is reporting a profit before tax and highlighted items for the
period of £6.5m (HY 2021: £6.1m; FY 2021: £11.1m). Earnings before
interest, tax, depreciation and amortisation (EBITDA) were £8.4m (HY 2021
£7.9m; FY 2021: £14.0m).
Gross profit margin in the period came in at 24.8%, compared to 29.2% in the
same 2021 period and 28.9% for the August 2021 financial year. The reduction
in margin reflects the growth in international FOB sales, particularly in the
competitive USA market, which attracts a lower margin than the Group's
domestic sales. The increases in costs of production in the Far East and the
continuing high freight costs also affected the margin.
Basic earnings per share before highlighted items amounted to 25.15p (HY 2021:
23.0p; FY 2021: 40.92p). Diluted earnings per share, on the same basis, were
24.62p (HY 2021: 22.93p; FY 2021: 40.37p).
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
£16,000. This compares to a charge of £0.48m shown in the corresponding
period in 2021 and a 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
respective balance sheet dates.
FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW
The Group's capital base remained solid, with net assets at 28 February 2022
of £35.2m, after a share buyback of £13.6m (HY 2021: £39.6m; FY 2021:
£44.9m). During the period, the Group generated cash from operations of
£3.4m (HY 2021: £21.3m; FY 2021: £27.3m). The reduction in cash
generation is mainly due to the increase in the inventory position.
The Group has no long-term debt. Net interest charges on the use of working
capital facilities during the period were £23,000
(HY 2021: £0.1m; FY 2021: £0.1m). After implementing the £13.6m tender
offer in February 2022 and making dividend payments, the Group had cash and
cash equivalents of £21.5m (HY 2021: £34.9m; FY 2021: £35.9m) at the end of
the first-half period. In addition, the Group had unutilised headroom of
over £50m under its banking and other finance facilities.
One of the difficulties experienced in the lead up to Christmas 2021 was the
Group's inability to satisfy all customer demand due to the shortage of
stock. Inventory at 28 February 2022 of £17.9m was materially up against
the comparative period last year
(HY 2021: £9.1m). These remain high, due in part to late arrivals of stock
but increasingly to a conscious decision to bring stock in early to ensure the
ability of the Group to satisfy demand and maintain sales in the second half.
DIVIDEND
The Board remains committed to maintaining a progressive dividend policy.
Reflecting its confidence in the Company's ability to continue to grow profits
and generate and develop further sustainable cash flow, the Board is declaring
an interim dividend of 7.0p per share (HY 2021: 6.0p; final dividend 2021:
9.0p). This interim dividend, which is covered 3.6 times by the earnings
before highlighted items (HY 2021: 3.8 times), will be paid on 29 July 2022 to
shareholders on the register as at the close of business on 15 July 2022.
The shares will be marked ex-dividend on 14 July 2022.
SHARE BUYBACK PROGRAMME
Shareholders passed a resolution at the Annual General Meeting held in January
2022 authorising the Company to effect share buybacks (including by way of
tender offers) of up to 3,200,000 issued ordinary shares of 5p each in the
Company ("Ordinary Shares").
The Company announced a Tender Offer to buyback up to 10% of the Company's
total voting rights on 28 January 2022. The exercise was successfully
completed in February 2022 and the Company bought back a total of 2,142,572
Ordinary Shares at a price of £6.30 per Ordinary Share pursuant to the Tender
Offer. The Company has a remaining unutilised capacity to buyback up to a
further 1,057,428 ordinary shares under the authority granted at the 2022 AGM.
The Board continues to believe that it is in the interests of all shareholders
to provide investors who wish to realise part or all of their investment in
the Group with an opportunity to access liquidity that is not otherwise
available in the market and to return excess capital to shareholders. The
Board will consider further buyback initiatives in the future, reflecting its
confidence in the Group's ability to maintain strong, ongoing cash generation
in excess of the current and projected requirements of the business.
TOTAL VOTING RIGHTS (TVR)
As at today's date, the Company's issued share capital consists of 21,465,929
Ordinary Shares. The Company holds 2,165,577 Ordinary Shares in treasury
which do not carry voting rights and, accordingly, the total number of voting
rights in Character is 19,300,352. The figure of 19,300,352 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 PRODUCT PORTFOLIO
Goo Jit Zu, our number 1 brand continues to sell well in the UK and
internationally in over 30 countries. We are also seeing consistent growth
in other brands - Fireman Sam, Mashems, Jiggly Pets and Stretch Armstrong.
We introduced some exciting new products at the London Toy Fair in January
2022:
Ø Weebles, including licenced ranges featuring Peppa Pig, Cocomelon and
Bluey;
Ø Chill Factor (the brand we acquired last year), with a number of new brand
extensions;
Ø Mouse in the House, a new concept and brand that we have wholly developed
in-house; and
Ø Shimmer and Sparkle, including the Instaglam make up-range.
The Group's strategy is to increasingly develop its own products, either under
its own brands or under well-known marques licenced from global brand
owners. This approach has enabled the Group to expand its global sales in
recent years. Whilst opportunities to capture distribution rights for
third-party products in our domestic markets in the UK and Scandinavia
continue to be sought and taken, the increase in investment in our own product
development demonstrates that we remain committed to developing this
successful strategy further and enhancing our global toy company credentials.
To view our full current portfolio of products and brands, go to
www.character-online.co.uk (http://www.character-online.co.uk) .
OUR PEOPLE
The teams at Character in the UK, Scandinavia and the Far East have
consistently demonstrated an ability to anticipate and adapt to the conditions
in our markets.
The onset of COVID-19 could not have been anticipated. However, the Board
believes that the manner in which the Group initially preserved and
subsequently grew the business, and has continued to do so, is a testament to
the enterprising spirit, consummate skills, irrepressible optimism and
uncompromising dedication of every member of the Group's global teams.
Collaboration is in our DNA and sees its expression in the seamless
coordination of our teams' responses to market intelligence and data from our
business. This, combined with our close working relationships with our
customers and suppliers, underpins our proven ability to identify and
profitably exploit brand and product development opportunities in the
market.
As always, on behalf of all stakeholders in the business, the Board wishes to
express thanks to all our colleagues for their efforts and commitment.
OUTLOOK
As we indicated earlier in this report, the momentum seen in sales in the
first half is continuing, particularly in the strong performance from our
international FOB business. We remain mindful, however, of the current
difficult macro-economic conditions and the recent weakness of Sterling.
Like many others across the industry, we also continue to experience inbound
shipping delays and other operational adversities due to continuing COVID-19
concerns, particularly in China.
Despite these challenges, we expect the profit before tax and highlighted
items for the full financial year ending 31 August 2022 to be in line with
market expectations.
The Board will keep shareholders updated as we progress through the year.
12 May 2022
The Character Group plc
Consolidated Income Statement
six months ended 28 February 2022
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 2022 28 February 2022 28 February 2022 28 February 2021 28 February 2021 28 February 2021 31 August 2021 31 August 2021 31 August 2021
Result before *highlighted items *highlighted items Statutory Result before *highlighted items *highlighted items Statutory Result before *highlighted items *highlighted items Statutory
(unaudited) Result (unaudited) Result (audited) Result
£'000 (unaudited) £'000 (unaudited) £'000 (audited)
£'000 (unaudited) £'000 (unaudited) £'000 (audited)
£'000 £'000 £'000
Revenue 90,947 - 90,947 74,543 - 74,543 139,997 - 139,997
Cost of sales (68,347) - (68,347) (52,751) - (52,751) (99,553) - (99,553)
Gross profit 22,600 - 22,600 21,792 - 21,792 40,444 - 40,444
Other income 339 - 339 256 - 256 332 - 332
Selling and distribution expenses (5,140) - (5,140) (5,469) - (5,469) (8,248) - (8,248)
Administrative expenses (11,251) - (11,251) (10,468) - (10,468) (21,301) - (21,301)
Profit on sale of property - - - - 2,016 2,016 - 2,016 2,016
Operating profit 6,548 - 6,548 6,111 2,016 8,127 11,227 2,016 13,243
Finance income 17 - 17 15 - 15 36 - 36
Finance costs (40) - (40) (66) - (66) (113) - (113)
Changes in fair value of financial instruments - 16 16 - (482) (482) - 2,128 2,128
Profit before tax 6,525 16 6,541 6,060 1,534 7,594 11,150 4,144 15,294
Income tax (1,188) (3) (1,191) (1,095) (303) (1,398) (2,353) (737) (3,090)
Profit for the period 5,337 13 5,350 4,965 1,231 6,196 8,797 3,407 12,204
*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 2022
Notes six months ended six months ended 12 months ended
28 February 2022 28 February 2021 31 August 2021
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Attributable to:
Owners of the parent 5,350 6,148 12,156
Non- controlling interest - 48 48
Profit for the period 5,350 6,196 12,204
Earnings per share before highlighted items (pence) 4
Basic earnings per share 25.15p 23.00p 40.92p
Diluted earnings per share 24.62p 22.93p 40.37p
Earnings per share after highlighted items (pence) 4
Basic earnings per share 25.21p 28.76p 56.86p
Diluted earnings per share 24.68p 28.67p 56.09p
Dividend per share (pence) 3 9.00p 3.00p 15.0p
EBITDA 8,407 7,889 14,036
(earnings before interest, tax, depreciation and amortisation)
The Character Group plc
Consolidated Statement of Comprehensive Income
six months ended 28 February 2022
six months ended six months ended 12 months ended
28 February 2022 28 February 2021 31 August 2021
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit for the period after tax 5,350 6,196 12,204
Items that may be reclassified subsequently to profit and loss 201 (247) 7
Net exchange differences on translation of foreign operations
Total comprehensive income for the period 5,551 5,949 12,211
Total comprehensive income for the period attributable to:
Equity holders of the parent 5,551 5,906 12,163
Non-controlling interest - 43 48
5,551 5,949 12,211
The Character Group plc
Consolidated Balance Sheet
at 28 February 2022
28 February 2022 28 February 31 August
(unaudited) 2021 2021
£'000 (unaudited) (audited)
£'000 £'000
Non-current assets
Intangible assets 1,567 446 1,806
Investment property 1,485 1,551 1,519
Property, plant and equipment 8,471 7,422 8,230
Right of use assets 1,162 1,718 1,454
Deferred tax assets 432 658 243
13,117 11,795 13,252
Current assets
Inventories 17,946 9,145 10,893
Trade and other receivables 14,827 11,651 26,019
Current income tax receivable 596 244 766
Derivative financial instruments 44 206 75
Cash and cash equivalents 21,550 35,037 35,920
54,963 56,283 73,673
Current liabilities
Short term borrowings (3) (140) -
Trade and other payables (29,133) (22,589) (38,390)
Lease liabilities (545) (538) (557)
Income tax payable (1,936) (951) (1,610)
Derivative financial instruments (118) (2,906) (165)
(31,735) (27,124) (40,722)
Net current assets 23,228 29,159 32,951
Non --current liabilities
Deferred tax (430) (90) (405)
Lease liabilities (676) (1,221) (946)
(1,106) (1,311) (1,351)
Net assets 35,239 39,643 44,852
Equity
Called up share capital 1,074 1,181 1,181
Shares held in treasury (1,826) (1,870) (1,870)
Capital redemption reserve 1,883 1,776 1,776
Share based payment reserve 3,857 3,640 3,749
Share premium account 17,540 17,324 17,324
Merger reserve 651 651 651
Translation reserve 887 590 767
Profit and loss account 11,173 16,351 21,274
Total equity attributable to equity holders of the parent 35,239 39,643 44,852
The Character Group plc
Consolidated Statement of Cash Flows
six months ended 28 February 2022
six months ended six months 12 months
28 February 2022 ended ended
(unaudited) 28 February 2021 31 August
£'000 (unaudited) 2021
£'000 (audited)
£'000
Cash flow from operating activities
Profit before taxation for the period 6,541 7,594 15,294
Adjustments for:
Depreciation of property, plant and equipment 304 284 567
Depreciation of investment property 33 33 65
Depreciation of right of use assets 276 278 556
Amortisation of intangible assets 1,246 1,187 1,621
Write off plant and equipment - - 132
(Profit)/loss on disposal of property, plant and equipment - (2,020) (2,028)
Interest expense 23 51 77
Financial instruments fair value adjustments (16) 482 (2,128)
Share based payments 108 271 380
(Increase)/decrease in inventories (7,053) 5,591 3,853
Decrease/(increase) in trade and other receivables 11,192 11,362 (3,006)
(Decrease)/increase in trade and other creditors (9,257) (3,843) 11,957
Cash generated from operations 3,397 21,270 27,340
Interest paid (23) (51) (77)
Income tax paid (841) (1,065) (1,788)
Net cash inflow from operating activities 2,533 20,154 25,475
Cash flows from investing activities
Purchase of business - - (945)
Payments for intangible assets (1,007) (742) (1,615)
Payments for property, plant and equipment (547) (5,918) (7,128)
Proceeds from disposal of property, plant and equipment - 3,450 3,458
Net cash outflow from investing activities (1,554) (3,210) (6,230)
Cash flows from financing activities
Payment of leasing liabilities (268) (338) (606)
Proceeds from issue of share capital 260 - -
Purchase of own shares for cancellation (13,640) - -
Dividends paid (1,929) (642) (1,924)
Net cash used in financing activities (15,577) (980) (2,530)
Net (decrease)/increase in cash and cash equivalents (14,598) 15,964 16,715
Cash, cash equivalents and borrowings at the beginning of the period 35,920 19,124 19,124
Effects of exchange rate movements 225 (191) 81
Cash, cash equivalents and borrowings at the end of the period 21,547 34,897 35,920
Cash, cash equivalents and borrowings consist of:
Cash, cash equivalents 21,550 35,037 35,920
Short term borrowings (3) (140) -
Cash, cash equivalents and borrowings at the end of the period 21,547 34,897 35,920
The Character Group plc
Consolidated Statement of Changes in Equity
six months ended 28 February 2022
Called up share capital Shares held in treasury Capital redemption reserve Share premium account Share based payment Profit Non- controlling interest
£'000 £'000 £'000 £'000 Merger reserve £'000 Translation reserve and loss £'000
£'000 £'000 account Total
£'000 £'000
Balance as at 1,181 (1,870) 1,776 17,324 651 3,369 727 11,231 (343) 34,046
31 August 2020
(unaudited)
Profit for the period - - - - - - - 6,148 48 6,196
Exchange differences on translation of foreign operations - - - - - - (137) (105) (5) (247)
Total comprehensive income/(expense) for the period - - - - - - (137) 6,043 43 5,949
Transactions with owners
Change in non-controlling interest - - - - - - - (300) -
300
Dividend paid - - - - - - - (642) - (642)
Deferred tax relating to share options - - - - - - - 19 - 19
Share based payment - - - - - 271 - - - 271
Six months ended 1,181 (1,870) 1,776 17,324 651 3,640 590 16,351 - 39,643
28 February 2021
Balance as at 1,181 (1,870) 1,776 17,324 651 3,369 727 11,231 (343) 34,046
1 September 2020
(audited)
Profit for the year after tax - - - - - - - 12,156 48 12,204
Net exchange differences on translation of foreign operations - - - - - - 40 (28) (5) 7
Total comprehensive income for the year - - - - - - 40 12,128 43 12,211
Transactions with owners
Change in non-controlling interest - - - - - - - (300) 300 -
Share based payment - - - - - 380 - - - 380
Deferred tax 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 period - - - - - - - 5,350 - 5,350
Net exchange differences on translation of foreign operations - - - - - - 120 81 - 201
Total comprehensive income/(expense) for the period - - - - - - 120 5,431 - 5,551
Transactions with owners -
Share based payment - - - - - 108 - - - 108
Deferred tax relating to share options - - - - - - - 37 37
-
Dividend paid - - - - - - - (1,929) - (1,929)
Shares issued - 44 - 216 - - - - - 260
Tender offer fees - - - - - - - (142) - (142)
Cancellation on tender offer (107) - 107 - - - - (13,498) - (13,498)
Six months ended 1,074 (1,826) 1,883 17,540 651 3,857 887 11,173 - 35,239
28 February 2022
The Character Group plc
Notes to the Financial Statements
six months ended 28 February 2022
1. BASIS OF PREPARATION
The financial information set out in this Half Yearly Financial Report 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 2022. These are consistent with the
accounting policies used in the financial statements for the year ended 31
August 2021 as described in those annual financial statements.
As permitted, this Half Yearly 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 Yearly Financial Statements and the financial information for the
six months ended 28 February 2021 do not constitute full statutory accounts
within the meaning of section 434 of the Companies Act 2006 and are
unaudited. These unaudited Half Yearly Financial statements were approved by
the Board of Directors on 11 May 2022.
The information for the year ended 31 August 2021 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
including the potential impact of COVID-19, 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 and has an
ongoing invoice discount facility of £20m, together with overdraft and trade
finance facilities of £38m. 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 Half Yearly
Report.
3. DIVIDENDS
six months ended six months ended 12 months ended
28 February 2022 28 February 2021 31 August 2021
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
On equity shares:
Final dividend paid for the year ended 31 August 2021
- 9.00p (2020: 3.00p) per share 1,929 642 642
Interim dividend paid for the year ended 31 August 2021
- 6.00p per share - - 1,282
1,929 642 1,924
The Character Group plc
Notes to the Financial Statements
six months ended 28 February 2022
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 (2021: one) 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 2022 29 February 2021 31 August 2021
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit attributable to equity shareholders of the parent 5,350 6,148 12,156
Financial instruments fair value adjustments net of tax (13) 391 (1,724)
Gain on sale of property net of tax - (1,622) (1,683)
Profit for adjusted earnings per share 5,337 4,917 8,749
Weighted average number of shares
In issue during the year - basic 21,217,582 21,379,781 21,379,781
Dilutive potential ordinary shares 457,318 66,078 291,974
Weighted average number of ordinary for diluted earnings per share 21,674,900 21,445,859 21,671,755
Earnings per share after highlighted items
Basic earnings per share (pence) 25.21 28.76 56.86
Diluted earnings per share (pence) 24.68 28.67 56.09
Earnings per share before highlighted items
Basic earnings per share (pence) 25.15 23.00 40.92
Diluted earnings per share (pence) 24.62 22.93 40.37
5. ELECTRONIC COMMUNICATIONS
The Half Yearly Financial Report for the six months ended 28 February 2022
will shortly be available for viewing and download on the Group's website,
www.thecharacter.com (http://www.thecharacter.com) .
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