12th May 2022 15:15
(Alliance News) - Character Group PLC on Thursday reported a fall in interim profit as margins came under pressure amid a "challenging" backdrop.
The Surrey, England-based toy, games, and gifts manufacturer reported revenue of GBP90.9 million in the six months to February 28, a rise of 22% compared to GBP74.5 million a year ago.
Meanwhile, Character Group's pretax profit decreased by 14% to GBP6.5 million from GBP7.6 million. Cost of sales rose by 30% to GBP68.3 million from GBP52.8 million, with this rate of growth outpacing its revenue rise.
The company reported a gross profit margin of 24.8%, below the 29.2% registered a year ago, as it noted higher production and freight costs.
"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," it said.
In addition, the firm booked a GBP2.0 million profit on the sale of property in the 2021 period, a gain which did not repeat in the recent half-year.
The company declared an interim dividend of 7.00 pence per share, reflecting a 17% increase compared to 6.00p a year before.
Looking ahead, Character Group noted headwinds up against the business but held its full-year outlook, expecting pretax profit before highlighted items for the financial year to August 31 to be in line with market forecasts.
For the half-year, pretax profit before highlighted items rose 6.6% to GBP6.5 million from GBP6.1 million a year before.
Shares in Character Group were down 3.8% at 560.00p in London on Thursday afternoon.
By Sophie Rose; [email protected]
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