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REG - Character Group PLC - Half-year Financial Report - six months to 28.2.26

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RNS Number : 8826D  Character Group PLC (The)  12 May 2026

 

 

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, TUESDAY 12 MAY 2026

 

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 2026

 

 

 Ø 15% increase in Profit before tax and highlighted item to £2.4m
 Ø Full year results expected to be significantly ahead of current market
 expectations
 Ø Gross Profit margin up from 29.3% in HY25 to 31.7%
 Ø Underlying Earnings per share up 29% at 11.06p
 Ø Strong balance sheet and cash generation and no long-term debt
 Ø Interim dividend increased to 4p per share, up 33%
 Ø Letting of surplus property will further reduce overheads
 Ø Expect the benefit of the cost management measures to continue in the
 second half and beyond

 

 

 KEY PERFORMANCE INDICATORS                                     Six months    Six months    12 months

 CONTINUING OPERATIONS                                          ended         ended         ended

                                                                28 February   28 February   31 August

                                                                2026          2025          2025

                                                                (unaudited)   (unaudited)   (audited)
 Revenue                                                        £48.3m        £53.0m        £100.5m

 Pre-tax profit before highlighted items*                       £2.4m         £2.1m         £1.2m
 Underlying basic earnings per share before highlighted items*  11.06p        8.59p         5.59p
 Diluted earnings per share before highlighted items*           11.06p        8.59p         5.59p

 Profit / (loss) before tax                                     £2.3m         £3.2m         £(1.8)m
 Basic earnings / (loss) per share                              10.68p        12.84p        (6.74p)
 Diluted earnings / (loss) per share                            10.68p        12.84p        (6.74p)

 Dividend per share (declared)                                  4.0p          3.0p          6.0p
 EBITDA                                                         £4.2m         £3.7m         £3.9m
 Cash and cash equivalents                                      £13.7m        £16.0m        £12.6m
 Net assets                                                     £33.4m        £38.7m        £33.1m

 

 *Excludes
 Mark to market (loss) / profit adjustments on FX derivative positions  £(0.1m)   £1.1m   £(3.0m)

 

 

 FTSE sector: leisure: FTSE AIM All-share: symbol: CCT: Market cap: £43.0m

 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 YEARLY FINANCIAL REPORT

for the six months ended 28 February 2026

 

INTRODUCTION

We are pleased to report that we have delivered a 15% increase in profit
before tax and highlighted items of £2.4m in the first half of this financial
year and represents double that produced in the Group's full 2025 financial
year. This is despite  lower year-on-year sales due to the substantial impact
of the imposition of US tariffs. We have also improved margin and reduced
overheads in the period under review.

 

GROUP TRADING

Revenue in the period at £48.3m was down 9% against the comparable period
last year (HY 2025: £53.0m; FY 2025: £100.5m).

 

Despite the reduction in HY 2026 sales, the Group is reporting an increased
profit before tax and highlighted items of £2.4m (HY 2025: £2.1m; FY 2025:
£1.2m).

 

Earnings before interest, tax, depreciation, and amortisation (EBITDA) were
£4.2m (HY 2025 £3.7m; FY 2025: £3.9m).

 

Gross profit margin in the first half improved to 31.7%, compared to 29.3% in
the same 2025 period and 26.2% for 2025 financial year.

Underlying basic earnings per share before highlighted items were up 29% at
11.06p (HY 2025: 8.59p; FY 2025: 5.59p). Diluted earnings per share, on the
same basis, were 11.06p (HY 2025: 8.59p; FY 2025: 5.59p).

 

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 loss of £0.1m.
This compares to a profit of £1.1m shown in the corresponding period in 2025
and a loss of £3.0m reported in the year to 31 August 2025. 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 2026 were £33.4m (HY 2025: £38.7m; FY
2025: £33.1m). The Group generated cash from operations of £4.7m (HY 2025:
£6.7m ; FY 2025: £6.9m ).

 

Inventories at the same date stood at £9.7m (HY 2025: £12.7m; FY 2025;
£16.3m).

 

The Group has no long-term debt. At the end of the first half, net interest
income was £0.1m (HY 2025:£0.1m; FY 2025: £0.2m). After making dividend
payments of £0.5m and financing share buybacks of £1.2m, the Group had cash
and cash equivalents of £13.7m (HY 2025: £16.0m; FY 2025: £12.6m).  In
addition, the Group had unutilised headroom of over £40.0m under its banking
and other finance facilities.

 

DIVIDEND

The Board is declaring an interim dividend of 4.0p per share (HY 2025: 3.0p;
final dividend 2025: 3.0p). The dividend is covered approximately 2.76 times,
based on the underlying basic earnings per share before highlighted items.
 

The interim dividend will be paid on 31 July 2026 to shareholders on the
register as at the close of business on 17 July 2026. The shares will be
marked ex-dividend on 16 July 2026.

OUR PRODUCT PORTFOLIO

We exhibited our main product ranges at the London Toy Fair last January and
received a very positive response to both our new and existing products.

 

Our leading brand, Goo Jit Zu, has benefited from licensed introductions such
as Minecraft, Marvel, Sonic, and Toy Story. In August, we will launch a new
Goo Jit Zu Mystery Surprise Egg collection. This range has been well supported
by retailers and is expected to deliver strong sales.

The success of Sticki Rolls continues, and we expect to increase sales again
this year. New additions to the range include the highly collectable Sticki
Mates and a licensed Minecraft line.

The Peppa Pig range is one of our longest established brands. The arrival of
Peppa's baby sister Evie in 2025 gave the brand a major boost in popularity,
which in turn resulted in a good growth in sales, both in the UK and in our
international markets.

We are also seeing continued sales success from ranges based on social media
influencers. Sales of brands such as Aphmau and Unspeakable remain strong, and
we will shortly be launching new ranges based on PrestonPlayz, Warrior Cats
and Caylus vs Foltyn.

MagMiMi, our new in-house developed brand, has been received extremely well
both in the UK and internationally. Early sales data looks very promising
following the brand's UK marketing launch on 1 May.

Mushykinz is a tabby squishy range developed by three highly successful social
media influencers. Sales are currently strong, and it is expected to become
one of our largest volume lines in 2026.

Our Games range is forecast to be our fastest-growing category this year. Key
lines include our in-house developed Hot Dog Drop, Prickly Pete and Level Out
Balance Board.

The Group's current portfolio of products and brands can be viewed at
www.character-online.com (http://www.character-online.com) .

 

SHARE BUYBACK PROGRAMME

Shareholders passed a resolution at the 2026 Annual General Meeting
authorising the Company to effect share buybacks (including by way of tender
offers) of up to 2,650,000 issued ordinary shares of 5p each in the Company
("Ordinary Shares"). As part of our strategy to reduce the Company's share
capital, we announced a £3.0 million share buyback programme on 2 February
2026. The Company has successfully bought back a total of 226,900 Ordinary
Shares at a total cost (excluding dealing costs) of £549,797 leaving an
unutilised capacity under the authority granted at the 2026 AGM of 2,423,100
Ordinary Shares. The programme will end on 14 January 2027 or sooner if the
total expended by the Company in buying back under the programme reaches £3.0
million (inclusive of the associated dealing costs).

 

TOTAL VOTING RIGHTS (TVR)

As at today's date, the Company's issued share capital consists of 19,404,008
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 17,420,949. The figure of 17,420,949 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

Regardless of all the obstacles faced so far in the current financial year,
our personnel throughout the Group have demonstrated effective team working
skills, perseverance and resilience in rising to every challenge that the
business has been presented with.  Their assertive action and good-natured
responses have ensured that the Group's position has been sustained in
troubled times and that creative plans for the future growth of the business
have been conceived and are being readied for implementation when conditions
improve.

 

Once again, on behalf of all shareholders, the Board wishes to acknowledge the
focus and hard work from everyone around the Group  and thank them for their
achievements in the half-year results and in the fruits of their labours that
have yet to be reaped.

 

PROPERTY

As we announced on 7 April 2026, the Company's property investment subsidiary
agreed terms to lease the Group's surplus warehouse premises (Infinity House),
based in Middleton Lancashire, on a full repairing and insuring basis from 7
April 2026. The rent payable is £773,000 per annum and this income, together
with the associated savings of the overheads attributable to these premises,
is a pleasing development.  Further, the option granted at completion of this
letting, potentially results in a sale of the Infinity House for £9.8m in
cash before the end of the current financial year.

 

OUTLOOK

The macro-economic challenges in global markets have had a bearing on the
first half sales to 28 February 2026 compared to the first half in the last
financial year.  These conditions continue to have an impact on trade
generally and have been augmented by more recent developments in the Middle
East.

 

We continue to anticipate flat turnover for the 2026 financial year as a
whole. However, with the geographical mix, some exciting new additions within
our product portfolio, a projected largely clean inventory position at the
year-end (reducing the need for significant provisions) and favourable FX
rates, we expect to maintain the improved HY26 gross margin for the remainder
of this financial year. We also expect the benefit of the cost management
measures to continue in the second half and beyond. In addition, the benefit
of the rental and/or the potential sale of Infinity House will reduce costs
yet further and will substantially strengthen the Group's balance sheet and
liquidity.

 

Although dependent on achieving forecast trading performance in Q4 (the
Group's key trading period in the financial year), the Board currently expects
that the Group's profit before tax and highlighted items for the year ending
31 August 2026 will be significantly above current market expectations.

 

The Company will provide a further update on progress post the year-end, ahead
of scheduled preliminary results being released in December 2026.

12 May 2026

 

 

 

 

 The Character Group plc

 Consolidated Income Statement

 six months ended 28 February 2026

 

 

                                                 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 2026                       28 February 2026    28 February 2026      28 February 2025                       28 February 2025    28 February 2025        31 August 2025                    31 August 2025       31 August 2025

                                                 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                                         48,280                                 -                    48,280               53,019                                 -                    53,019                 100,465                            -                    100,465
 Cost of sales                                   (32,992)                               -                    (32,992)             (37,508)                               -                    (37,508)               (74,094)                           -                    (74,094)
 Gross profit                                    15,288                                 -                    15,288               15,511                                 -                    15,511                 26,371                             -                    26,371
 Other income                                    146                                    -                    146                  154                                    -                    154                    420                                -                    420
 Selling and distribution expenses               (3,709)                                -                    (3,709)              (4,128)                                -                    (4,128)                (5,725)                            -                    (5,725)
 Administrative expenses                         (9,374)                                -                    (9,374)              (9,535)                                -                    (9,535)                (20,005)                           -                    (20,005)
 Operating profit                                2,351                                  -                    2,351                2,002                                  -                    2,002                  1,061                              -                    1,061
 Finance income                                  94                                     -                    94                   151                                    -                    151                    290                                -                    290
 Finance costs                                   (25)                                   -                    (25)                 (43)                                   -                    (43)                   (134)                              -                    (134)
 Changes in fair value of financial instruments  -                                      (92)                 (92)                 -                                      1,060                1,060                  -                                  (3,032)              (3,032)
 Profit/(loss) before tax                        2,420                                  (92)                 2,328                2,110                                  1,060                3,170                  1,217                              (3,032)              (1,815)
 Income tax                                      (455)                                  23                   (432)                (506)                                  (265)                (771)                  (186)                              758                  572
 Profit/(loss) for the period                    1,965                                  (69)                 1,896                1,604                                  795                  2,399                  1,031                              (2,274)              (1,243)

 

 *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 2026

 

 

                                                                  Notes   six months ended    six months ended    12 months ended

                                                                         28 February 2026     28 February 2025    31 August 2025

                                                                         (unaudited)         (unaudited)          (audited)

                                                                         £'000               £'000                £'000
 Attributable to:
 Owners of the parent
 Profit / (loss) for the period                                          1,896               2,399                (1,243)
 Earnings per share before highlighted items (pence)              4
 Basic earnings per share                                                11.06p              8.59p                5.59p
 Diluted earnings per share                                              11.06p              8.59p                5.59p
 Earnings / (loss)  per share after highlighted items (pence)     4
 Basic earnings / (loss)  per share                                      10.68p              12.84p               (6.74p)
 Diluted earnings / (loss) per share                                     10.68p              12.84p               (6.74p)

 Dividend per share (pence)                                       3      3.00p               11.00p               14.0p

 EBITDA                                                                  4,236               3,680                3,900

 (earnings before interest, tax, depreciation and amortisation)

 

 

The Character Group plc

Consolidated Statement of Comprehensive Income

six months ended 28 February 2026

 

 

                                                                                                     six months ended    six months ended    12 months ended

                                                                                                     28 February 2026    28 February 2025     31 August 2025

                                                                                                     (unaudited)        (unaudited)          (audited)

                                                                                                     £'000              £'000                £'000
 Profit / (loss) for the period after tax                                                            1,896              2,399                (1,243)
 Items that may be reclassified subsequently to profit and loss                                      71                 313                  (15)

 Net exchange differences on translation of foreign operations
 Total comprehensive Income / (loss) for the period                                                  1,967              2,712                (1,258)

 Total comprehensive income / (loss) for the period attributable to:
 Equity holders of the parent                                                                        1,967              2,712                (1,258)

 

 

 The Character Group plc

 Consolidated Balance Sheet

 at 28 February 2026

 

 

                                                                28 February 2026  28 February   31 August

                                                                (unaudited)       2025           2025

                                                                £'000             (unaudited)   (audited)

                                                                                  £'000         £'000
 Non-current assets
 Intangible assets                                              1,229             1,334         1,682
 Investment property                                            1,224             1,290         1,257
 Property, plant and equipment                                  10,204            10,245        10,282
 Right of use assets                                            609               638           634
 Deferred tax assets                                            1,495             384           1,939
                                                                14,761            13,891        15,794
 Current assets
 Inventories                                                    9,666             12,676        16,288
 Trade and other receivables                                    13,354            8,656         19,113
 Current income tax receivable                                  800               564           712
 Derivative financial instruments                               8                 355           16
 Cash and cash equivalents                                      13,914            16,305        13,295
                                                                37,742            38,556        49,424
 Current liabilities
 Short term borrowings                                          (225)             (349)         (708)
 Trade and other payables                                       (13,531)          (11,445)      (25,524)
 Lease liabilities                                              (488)             (620)         (393)
 Income tax payable                                             -                 (302)         (478)
 Derivative financial instruments                               (4,540)           (702)         (4,455)
                                                                (18,784)          (13,418)      (31,558)
 Net current assets                                             18,958            25,138        17,866
 Non - current liabilities
 Deferred tax                                                   (215)             (302)         (294)
 Lease liabilities                                              (121)             (45)          (274)
                                                                (336)             (347)         (568)
 Net assets                                                     33,383            38,682        33,092
 Equity
 Called up share capital                                        978               1,022         1,000
 Shares held in treasury                                        (1,664)           (1,664)       (1,664)
 Capital redemption reserve                                     1,979             1,935         1,957
 Share based payment reserve                                    4,307             4,247         4,266
 Share premium account                                          17,902            17,902        17,902
 Merger reserve                                                 651               651           651
 Translation reserve                                            649               1,112         573
 Profit and loss account                                        8,581             13,477        8,407
 Total equity attributable to equity holders of the parent      33,383            38,682        33,092

 

 

 The Character Group plc

 Consolidated Statement of Cash Flows

 six months ended 28 February 2026

 

 

                                                                       six months ended  six months      12 months

                                                                       28 February       ended           ended

                                                                       2026               28 February     31 August

                                                                       (unaudited)       2025            2025

                                                                       £'000             (unaudited)     (audited)

                                                                                         £'000           £'000
 Cash flow from operating activities
 Profit/(loss) before taxation for the period                          2,328             3,170           (1,815)
 Adjustments for:
 Depreciation of property, plant and equipment                         467               417             827
 Depreciation of investment property                                   33                33              66
 Depreciation of right of use assets                                   179               264             471
 Amortisation of intangible assets                                     1,253             963             1,485
 (Profit) / loss on disposal of property, plant and equipment          (47)              1               (25)
 Interest (income)/expense                                             (69)              (108)           (156)
 Financial instruments fair value adjustments                          92                (1,060)         3,032
 Share based payments                                                  41                16              35
 Decrease in inventories                                               6,622             7,427           3,815
 Decrease in trade and other receivables                               5,759             15,335          4,878
 Decrease in trade and other creditors                                 (11,993)          (19,752)        (5,673)
 Cash generated from operations                                        4,665             6,706           6,940
 Interest received                                                     69                108             156
 Income tax paid                                                       (632)             (67)            (329)
 Net cash inflow from operating activities                             4,102             6,747           6,767
 Cash flows from investing activities
 Payments for intangible assets                                        (801)             (679)           (1,549)
 Payments for property, plant and equipment                            (389)             (593)           (1,069)
 Proceeds from disposal of property, plant and equipment               47                -               47
 Net cash outflow from investing activities                            (1,143)           (1,272)         (2,571)
 Cash flows from financing activities
 Payment of leasing liabilities                                        (208)             (243)           (483)
 Proceeds from issue of share capital                                  -                 233             233
 Purchase of own shares for cancellation                               (1,188)           (857)           (1,955)
 Dividends paid                                                        (529)             (2,052)         (2,593)
 Net cash used in financing activities                                 (1,925)           (2,919)         (4,798)
 Net increase/(decrease) in cash and cash equivalents                  1,034             2,556           (602)
 Cash, cash equivalents and borrowings at the beginning of the period  12,587            13,153          13,153
 Effects of exchange rate movements                                    68                247             36
 Cash, cash equivalents and borrowings at the end of the period        13,689            15,956          12,587

 

 

 Cash, cash equivalents and borrowings consist of:
 Cash, cash equivalents                                          13,914  16,305  13,295
 Short term borrowings                                           (225)   (349)   (708)
 Cash, cash equivalents and borrowings at the end of the period  13,689  15,956  12,587

 

 

The Character Group plc

Consolidated Statement of Changes in Equity

six months ended 28 February 2026

 

 

                                                            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 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

 

 Balance as at                                                  1,038  (1,756)  1,919  17,761  651  4,231  698    14,088   38,630

 1 September 2024

 (audited)
 Loss for the year after tax                                    -      -        -      -       -    -      -      (1,243)  (1,243)
 Net exchange differences on translation of foreign operations  -      -        -      -       -    -      (125)  110      (15)
 Total comprehensive income/(expense) for the year              -      -        -      -       -    -      (125)  (1,133)  (1,258)
 Transactions with owners
 Share based payment                                            -      -        -      -       -    35     -      -        35
 Dividends                                                      -      -        -      -       -    -      -      (2,593)  (2,593)
 Shares issued                                                  -      92       -      141     -    -      -      -        233
 Shares cancelled                                               (38)   -        38     -       -    -      -      (1,955)  (1,955)
 At 31 August 2025                                              1,000  (1,664)  1,957  17,902  651  4,266  573    8,407    33,092

 (audited)
 Profit for the period                                          -      -        -      -       -    -      -      1,896    1,896
 Exchange differences on translation of foreign operations      -      -        -      -       -    -      76     (5)      71
 Total comprehensive income for the period                      -      -        -      -       -    -      76     1,891    1,967
 Transactions with owners
 Share based payment                                            -      -        -      -       -    41     -      -        41
 Dividend paid                                                  -      -        -      -       -    -      -      (529)    (529)
 Shares cancelled                                               (22)   -        22     -       -    -      -      (1,188)  (1,188)
 Six months ended                                               978    (1,664)  1,979  17,902  651  4,307  649    8,581    33,383

 28 February 2026

 

 

 

 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 2026 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 2026.  These are consistent with the accounting policies used in the
 financial statements for the year ended 31 August 2025 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 11 May 2026.

 The information for the year ended 31 August 2025 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 2026   28 February 2025   31 August 2025

                                                           (unaudited)        (unaudited)        (audited)

                                                           £'000              £'000              £'000
 On equity shares:
 Final dividend paid for the year ended 31 August 2025
 -       3.00p (2024: 11.00p) per share                    529                2,052              2,052
 Interim dividend for the year ended 31 August 2025
 -       3.00p per share                                   -                  -                  541
                                                           529                2,052              2,593

 

 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 (2025: 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 2026   28 February 2025   31 August 2025

                                                                         (unaudited)        (unaudited)        (audited)

                                                                         £'000              £'000              £'000
 Profit / (loss) attributable to equity shareholders of the parent       1,896              2,399              (1,243)
 Financial instruments fair value adjustments net of tax                 69                 (795)              2,274
 Profit for adjusted earnings per share                                  1,965              1,604              1,031
 Weighted average number of shares
 In issue during the year - basic                                        17,760,908         18,677,989         18,430,863
 Dilutive potential ordinary shares                                      -                  2,314              1,124
 Weighted average number of ordinary for diluted earnings per share

                                                                         17,760,908         18,680,303         18,431,987

 

 Earnings per share
 Basic earnings / (loss) per share (pence)    10.68  12.84  (6.74)
 Diluted earnings / (loss) per share (pence)  10.68  12.84  (6.74)

 

 Adjusted earnings per share
 Basic earnings per share (pence)    11.06  8.59  5.59
 Diluted earnings per share (pence)  11.06  8.59  5.59

 

 5.  Electronic Communications
 The Half-Year Financial Report for the six months ended 28 February 2026 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 EADSFFAKKEAA



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