Almost 90 per cent of the drop in Character Group's half-year turnover was down to lower sales of Zhu Zhu furry hamster toys, which have returned to more sustainable levels after a phenomenally successful period last year. Elsewhere, the company broadly maintained sales as around 60 per cent of revenues came from own-developed and branded products.
Selling toys is an unpredictable business and the key to this year's performance will be the Christmas order intake in July and August – just as the 2012 Olympics take central stage. So Character must rely on new toys to attract the attention of cash-strapped parents. One new product that might take off is Topps Minis: a table-top game where you can control "constructible" players such as Arsenal whizz Theo Walcott or England goalie Joe Hart, rather than anonymous soccer players. Then there are apps for five to 12-year-olds to use on tablet computers; one of the first titles will be a Doctor Who virtual game.
Fortunately in these uncertain times, Character has been able to prune back working capital while still being confident enough to continue its aggressive share buybacks. Broker Charles Stanley forecasts a fall in full-year revenues from £94.9m to £80m, flat pre-tax profits of £9m and EPS up 9 per cent to 27.75p.
CHARACTER (CCT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 151p | MARKET VALUE: | £33.9m | |
| TOUCH: | 149-153p | 12-MONTH HIGH: | 191p | LOW: 123p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 41p* | NET DEBT: | 33% | |
| Half-year to 29 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 58.1 | 6.64 | 20.3 | 3.00 |
| 2012 | 44.3 | 5.57 | 19.3 | 3.30 |
| % change | -24 | -16 | -5 | +10 |
Ex-div: 04 July Payment: 27 July Aim: Leisure products *Including intangibles of £1.16m, or 5p a share | ||||
