1st May 2014 12:33
LONDON (Alliance News) - Toy maker Character Group PLC Thursday said it swung to a pretax profit and increased revenues in the first half of the year, boosted by strong trading both at home and abroad.
The toy company, which makes children's toys based on characters including Postman Pat, said its balanced portfolio provides the engine for future growth in the UK and overseas markets. The group left its interim dividend at 3.30 pence per share, but said it is confident of achieving current market expectation for the financial year ending August 31.
"The board will recommend returning to its progressive dividend policy as soon as is practicable and will consider the matter further at the year end," the company said in a statement.
For the six months ended February 28, the group reported a pretax profit of GBP3.1 million, compared with a pretax loss of GBP1.9 million the prior year.
As a significant proportion of the group's purchases are made in US dollars, Character said that the strength of the sterling wiped GBP2.9 million off its profit in the first half, compared with only GBP90,000 the prior year.
Revenue for the first-half was GBP46.9 million, up from GBP30.6 million a year earlier, as stock levels improved and customer purchases matched expectations. It said sales in the first-half, particularly over the Christmas period, were driven by popular products such as Minecraft, Teksta and younger kid's favourites Peppa Pig and Fireman Sam.
"Overall, we are witnessing solid trading, both at home and internationally. We therefore remain comfortable, at this stage, that forecasted sales are currently on track for the calendar year as a whole," said Executive Chairman Richard King in a statement.
The group has been re-balancing its UK product portfolio across several brands, and said that now no single product category accounts for more than 20% of its UK sales.
"Whilst the growth of UK sales across several categories is very satisfying, we have been very pleased with the strong revenue growth coming from international sales," the company said.
Character said that, driven by its Peppa Pig brand in Europe and Australia and by Doctor Who in the US, international revenue grew by more than 50% during the first half of the year.
The group said that working capital continues to be managed effectively, with the cost base and inventory levels under tight control.
Character Group shares were up 4.2% at 188.00 pence Thursday early afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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