4th Dec 2019 09:42
(Alliance News) - Toy company Character Group PLC on Wednesday warned a "challenging" outlook for the Christmas period is to hurt performance in its new financial year.
This follows a similarly "challenging" year that ended in August, with revenue rising 13% to GBP120.4 million, but pretax profit falling by 4.3% to GBP11.1 million.
The decline in profitability was due to a rise in finance, selling & distribution, and administrative costs.
Despite this, New Malden, Surrey-based Character is paying a 13 pence per share final dividend, taking the year's total payment to 26.0p, 13% higher than the year before.
"As stated in the trading update issued by the company in September, the year under review was challenging for the group. The principal factors in this were the failure of the Scandinavian toy market to recover fully from the demise of Top Toy (formerly the largest toy retailer in that market), the continued decline of the UK toy market (believed by the board to be as much as 15% over the last two years) and the weakness of sterling," said Character.
"These factors, together with the well-publicised effects of Brexit on the entire UK retail market, have had a negative impact on the group as a whole. Although this was somewhat disappointing and led to a downward revision in market expectations for the year under review and for the current financial year, the group's market share in the UK did not materially change in the period," the company continued.
Character did say its portfolio is performing well, with some "exciting" new product to be unveiled over the coming months. It owns the licence to brands such as Peppa Pig, Teletubbies, Scooby-Doo, and Doctor Who.
However, looking forward, Character warned the prospects for Christmas trading look "challenging", which will affect performance in the first half of its new financial year. It did say the second half has a positive outlook, however.
Character will provide an update on Christmas trading when holding its annual general meeting on January 17. Shares were 6.0% lower on Wednesday morning in London at 390.00p each.
By George Collard; [email protected]
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