Character (CCT) is still suffering from lingering effects from the collapse of Toys ‘R’ Us in early 2018. The toy retailer had been its third-largest customer, and its demise continued to weigh on US sales in the six months to February 2019. However, the toy manufacturer doesn't expect the negative effects to extend beyond this year.
Retailer woes weren't confined to the UK, though. In October, the group acquired a 55 per cent shareholding in Danish toy distributor OVG-PROXY A/S (Proxy), whose business was impacted by the failure of Nordic retailer Top Toy in January. However, its market share is being gradually absorbed by Proxy’s other customers.
In spite of the liquidations, trading has been active across in-house lines, such as Peppa Pig, and third-party products such as Pokémon, which is expected to get a boost with this month’s release of Detective Pikachu. Launching new ranges continues to be a core part of the strategy, and further additions are expected in the coming months. The group has also been expanding into 'trend' lines: products that tap into the growing trend for impulse buying. The market is refashioning itself towards these more dynamic – although potentially more disposable – products.
House broker Panmure Gordon is forecasting adjusted pre-tax profits of £15.9m, giving EPS of 47.3p for the full year, up from £12.9m and 44.4p in 2018.
| CHARACTER GROUP (CCT) | ||||
| ORD PRICE: | 593p | MARKET VALUE: | £126m | |
| TOUCH: | 585-600p | 12-MONTH HIGH: | 593p | LOW: 468p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 158p | NET CASH: | £19.8m | |
| Half-year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 50.5 | 4.52 | 2.1 | 11.0 |
| 2019 | 58.8 | 5.60 | 19.8 | 13.0 |
| % change | +17 | +24 | +857 | +18 |
| Ex-div: | 11 Jul | |||
| Payment: | 26 Jul | |||
