Toys business anticipates benefits from current festive surge

Annual figures for Character Group, the Oldham-based toys firm, showed declines in the year to August 31, but it said trading in the run up to this Christmas, following the UK’s second national lockdown, has been “significantly ahead” of last year.

The group said it expects its current reporting year to benefit from the recovery.

Sales of £105.3m were down from £120.4m in 2019, and pre-tax profits were more than halved, from £11.1m to £5m. The dividend has been slashed from 26p per share to 5p per share.

However, net cash improved, from £6.5m to £19.1m.

The group said demand for its diverse and exciting product range has been sustained since the onset of the COVID-19 pandemic with all ranges performing well, including Peppa Pig, Goo Jit Zu, Pokémon, Little Live Pets, Shimmer ‘n Sparkle, Squeakee the Balloon Dog, PenSilly, Gotta’ Go Flamingo, Treasure X , My Baby Tumbles, Project X, Tap It and flipside.

The success of Peppa Pig sustainable, environmentally-friendly, wooden toy products has led to winning more licences from well-known brand owners that are keen to increase the ‘green’ credentials of their own brands.

These include Batman, Disney Princess, Fireman Sam and Ben and Holly

Agreement, subject to contract, has been reached with the brand owner, Hasbro, to continue Character’s current European Peppa Pig wood products licence through to December 31, 2023, and to significantly extend the product range under that licence.

Product development, which has been key to success in broadening and strengthening Character’s portfolio, has continued apace. The current range and the developments in prospect bode well for an exciting future, it said.

The group said: “The resilience of Character’s performance has arisen from the ability of many of its customers to effectively service demand by migrating sales from bricks and mortar outlets to online shops and marketplaces, when needed.

“Character’s success in preserving profitability in troubled times and positioning itself to take advantage of the current opportunities has been down to the management’s ability to read and respond to fast-evolving trends in the group’s markets.

“Trading in the lead up to Christmas 2020, despite the second UK lockdown, has been significantly ahead of the previous year’s sales. Sales in Q1 are up by more than 30% over the same period last year and the prospects for the current financial year are looking extremely positive.”

The statement added: “We expect FY 2021 to be the beneficiary of the deferral of the strong trading that we originally anticipated.

“Whilst we will continue to monitor the position, it is apparent that the group is ahead of management expectations for the first half to February 2021, and market expectations for the financial year as a whole.”

The group said it does not expect to be affected by Brexit as its inventory is mostly imported from the Far East.

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