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Character Group confident despite recent headwinds
Branded toys, games and giftware developer The Character Group issued an update on itrs trading on Friday morning, as investors gathered for its annual general meeting.
The AIM-traded firm said that, following on from its trading statement of 11 October and the publication of the 2017 annual report and accounts on 21 December, it could confirm that trading for the first four months of the current financial year - which included 2017 Christmas retail sales - were in line with expectations.
Its board said that, whilst international sales were adversely impacted by many factors - not least of which was the bankruptcy and refinancing of Toys 'R' Us, domestic sales continued to perform well, showing growth when compared against the comparable period in the previous year.
"Our leading brands, the top five being Peppa Pig, Little Live Pets, Stretch, Mashems and Teletubbies, continue to trade well," the board said in the update.
"These core ranges will be strengthened as we add innovative product extensions to them.
"We continue to add exciting new ranges, such as the new line up of Pokémon products, which will be launched at retail this summer."
The directors said they were "confident" that the performance of its core ranges and the new introductions would positively impact the 2018 calendar year as a whole.
They added that in difficult trading periods, it was "reassuring" that the firm could rely on management to not only read the market well but to react "speedily and skilfully" to address the impact of the rapidly changing conditions, notably in terms of the group's commitment to inventory levels.
"Consequently, under their stewardship, we have emerged from the Christmas period with virtually no excess stocks to deal with in-house, and with our major retailers having experienced a clean sell-through of our products."
The Character Group said it will be exhibiting its full range of 2018 products at the London Toy Fair, which was being held at Olympia next week.
"We expect the initial enthusiasm expressed by our major customers to be shared by all trade visitors to our exhibition display and to see it result in further growth in demand for our products and in our sales, both domestically and internationally, in the calendar year," the board said.
As it reported in the 2017 annual report and accounts, whist the group's performance for the half year to 28 February 2018 would reflect the overall lower trading compared to 2017, the board said it remained confident that, absent any major external factors, the group would return to its previous growth pattern during the second half of this calendar year and that would be fully reflected in the strength of the trading for the financial year to 31 August.
"A further update on the group's progress will be made in April, when the financial results for the period ending 28 February 2018 are to be released."