Character returns to profitability in second half

Following a difficult first half, market share increases to five per cent.
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Firm reports preliminary results for the year ended August 31st 2009.

Group sales for the year were £68.6 million, down 16.6 per cent compared to £82.3 million in 2008.

The operating loss in the same period was £2.15 million, compared to a profit of £5.3 million in the 2008 financial year. 

The loss included an exceptional cost of £1.06 million, relating to the bad debt suffered from the Woolworths administration.

The loss before tax, on the same basis, was £2.17 million, compared to a profit of £5.14 million for the previous year.

Gross margin was 29.2 per cent, compared to 35.8 per cent for the year-ended August 2008.

Chairman, Richard King,commented: "We have had to face the drastic changes to the marketplace following the closure of Woolworths, which affected not only our Christmas 2008 sales but had an even greater impact on our Spring 2009 business following this closure.

"As a business, we had to consolidate and re-group, whilst our focus was to deliver a portfolio that met both the new market aspirations and consumer demand at the same time as we had to continue to deliver service and support to both our customers and suppliers, who were all being squeezed by the more difficult conditions… against this backdrop and the tough environment continuing, we traded profitably during the second half of the year.

"It remains difficult to know exactly how the toy market will fare in the sales leading up to Christmas 2009, however, there are some very positive signs that our strategy of focusing on our own brands has been the correct approach for the Group and that there will be a general shortage of stock in the market place by Christmas with many of our products featuring in this shortage.

"The Board remains optimistic that, as a business, Character Group is strong and well positioned, both product wise and financially, to further develop its business and improve profitability going forward."


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