The diminutive size of toy designer and distributor Character (CCT) means the playground for investors is quite small. But that could change, following a near-doubling of the share price over the past year. Character will be the global toy partner for the Teletubbies toys that will accompany a new BBC series from next year. These popular children's characters will join an existing suite that includes Peppa Pig, Minecraft and Scooby Doo.
The company, which is the fourth-largest toy distributor in the UK, posted a 73 per cent increase in pre-tax profit to nearly £12.3m in the year to August, thanks mainly to a strong performance in the domestic market. The numbers were helped, however, by a £2m non-cash credit due to the value of US dollar hedges.
Importantly for income investors, Character raised the dividend, but the payout remains 4.4 times covered by earnings. The balance sheet also swung from a £4.5m net debt position to a net cash one of the same magnitude after the company generated more than £18m of operating cash flow in the period.
Analysts at joint house broker Allenby Capital have revised up their pre-tax profit expectations for the year to August 2016 to £12.6m, leading to EPS of 48.6p.
| CHARACTER (CCT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 486p | MARKET VALUE: | £105m | |
| TOUCH: | 482-490p | 12-MONTH HIGH: | 533p | LOW: 231p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 71p | NET CASH: | £4.5m | |
| Year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 95.0 | 9.05 | 28.5 | 6.0 |
| 2012 | 75.0 | 7.08 | 25.6 | 6.0 |
| 2013 | 67.2 | 0.20 | 0.7 | 6.6 |
| 2014 | 97.9 | 7.11 | 27.7 | 6.6 |
| 2015 | 99.1 | 12.27 | 48.6 | 9.0 |
| % change | +1 | +73 | +76 | +36 |
Ex-div: 7 Jan Payment: 29 Jan | ||||
