Toys group issues profit warning after poor Christmas trading

Character Group, the Oldham-based toys business, has issued a profits warning after the Christmas market contracted for a second successive year.

Ahead of the group’s Annual General Meeting this morning, Character issued a trading update for the important Christmas period.

It said: “The 2019 Christmas trading period was extremely challenging with the total toy market in the UK contracting for the second successive year, and those conditions will impact our results for the first half of the financial year.

“Sales of our core products were down against the comparable period last year. Nevertheless, they performed well with good sell through at retail in the UK.”

The group said it enters the 2020 calendar year with a very strong product portfolio and, although the first half results will be below last year, it anticipates that the group will deliver one of its strongest second half performances to date.

“Our confidence for the second half has been boosted by the reactions from our customers to recent product previews and presentations.

“With further viewing opportunities and product launches planned for the London Toy Fair, which takes place next week at Olympia, we expect the momentum to continue.”

However, it added: “Despite the anticipated strong finish to the current financial year, the weakened Christmas performance has led the board to believe that the group’s profit before tax for the year ending 31 August 2020 will be circa £10m, which is lower than current consensus expectations.”

Character Group will issue its interim results in early May.