Character Share Discussion Threads

[rcturner2] 06/10/2016 09:00

I have bought in after the IC tip.

[stoxx67] 04/10/2016 08:56

here we go again with the £/$

[maddox] 03/10/2016 16:57

With a progressive dividend policy, good cash generation, a 40% hike in the interim dividend, a prospective shrinking of the shares in issue by 15%. If all that doesn't shift the share price nothing will!

Regards, Maddox

[glaws2] 30/9/2016 06:30

Thanks h1a3

[h1a3] 29/9/2016 18:35

Hi All,
Today, Investors Chronicle are stating: Buy the Buyback King Character.

Their comments are:

Anyone with children or grandchildren will know the powerful pull the likes of Peppa Pig, Teletubbies and Fireman Sam have on young folk. Toy wholesaler Character (CCT) licenses these brands and many more.

The business, based in New Malden, is awarded licences to develop toy ranges based on children's TV and film characters. The manufacture of the toys is outsourced to a company in China, meaning Character's capital investment costs are kept low and its main competencies are focused on in-house design and development.
Manufacturing in China also means much of the company's purchasing costs are in dollars, which has posed an issue due to the pound's post-referendum slump. While the shares have fallen since the vote for Brexit, management hedges its currency exposure, which should help. Also, the group's success at boosting overseas sales should act as a natural currency hedge - US sales rose to 24 per cent of the total in the first half, up from 17 per cent for the same period in 2015.

Character's reliance on licences means its relationships with intellectual property owners are key. It has a good track record on this front, having had the licence for star character Peppa Pig for 12 years. Other encouraging recent developments include its appointment by DHX as global master toy partner for Teletubbies and appointment by Hasbro for the iconic Stretch Armstrong brand.

Conditions in the international toy market currently look buoyant following 7 per cent growth in 2015. That said, the market is very sensitive to the general state of the economy. This cyclicality, coupled with Character's dependence on licences, rather than company-owned brands, creates inherent uncertainty, which helps explain Character's shares' lowly rating of just nine times forecast earnings.

However, we think that rating looks too low. What's more, so does the company - it has a huge appetite for its own shares. Last financial year alone it spent £6m buying back 11.2 per cent of its shares, and over the past 10 years buybacks have reduced the number of shares in issue by almost three-fifths. The company has also recently announced it has authorisation to spend up to £5m on up to 3.1m shares, or 15 per cent of those in issue, until 20 January next year, which could allow it to take advantage of the post-referendum share-price fall.

Importantly, strong cash conversion means it has been able to substantially reduce the number of shares in issue - thus driving up earnings per share (EPS) - while also pursuing a progressive dividend policy. Indeed, the company reported a £10.3m year-on-year rise in net cash at the half-year stage and hiked the interim dividend by two-fifths. The increased payout was still 4.7 times covered by earnings.

CHARACTER (CCT)
ORD PRICE: 455p MARKET VALUE: £96m
TOUCH: 445-465 12M HIGH / LOW: 572p 425p
FORWARD DIVIDEND YIELD: 3.6% FORWARD PE RATIO: 9
NET ASSET VALUE: 101p NET CASH: £14.5m
Year to 31 Aug Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2013 67 0.2 0.7 6.6
2014 98 7.1 27.7 7.3
2015 99 12.3 48.6 11.0
2016* 111 12.6 49.1 15.0
2017* 121 13.6 53.1 16.5
% change +9 +8 +8 +10
Normal market size: 2,000

Matched bargain trading

Beta: 0.02

*Allenby Capital forecasts, adjusted PTP and EPS figures


The IC view is: The group's top management have been with the business for a long time and have dealt well with past fluctuations in consumer sentiment and swift changes in its young clientele's fickle tastes. We think the shares' rating looks too low and that buybacks make good sense at this level. The well-covered dividend is also an attraction. Buy.

[stoxx67] 26/9/2016 07:35

unbelievable they were sold down to £4.50

[tratante] 22/9/2016 11:06

Well done h1a3. You're bang on in your prediction!

[h1a3] 21/9/2016 18:57

I think the MM's have been keeping the share price down to facilitate today's 3 very big buys of circa 450K.
I am expecting CCT to be issuing a RNS tomorrow and if that happens, I would expect the share price to rise.

[mcartdon] 20/9/2016 19:13

There will be a big bounce when the results come, if, there is a positive statement on progress at christmas. Consumer spending is up, their export market should be boyant.
this isnt going to be a dull christmas online for sure though shops are an outdated concept for mid priced item sales.
brexit is fairly neutral for the company but margins have been cut a bit they report in pounds so dollar earnings will help next year with teletubbies, growth in volume that counteracts profit margin tightening would be very positive.
I still think this is a good point to buy back or buy in again,

[orange1] 20/9/2016 18:41

I don't know if they have to be that quick. We'll see what tomorrow brings. I wonder if they put out their announcement and made their purchase after worried shareholders contacted them to ask them how their plans to enhance shareholder value were progressing.

[gdjs100] 20/9/2016 18:36

If they did, then would they not have issued an RNS after the close stating so?

[gdjs100] 20/9/2016 17:13

That's how I read it - but why not then just buy back 25% of the ADV, i.e. do as much as they can? Strange statement.

[orange1] 20/9/2016 15:58

Is the company trying to say in today´s announcement ( that it would like to buy back more shares but is hamstrung by the rule that it cannot on any one trading day buy more than 25% of the average daily volume?

[r1singson] 19/9/2016 15:28

I sold out of this stock some time ago but interested observer. The results just didn't seem satisfactory to me and the managements commentary I found really quite unhelpful. As I suspected it's not really going anywhere although the results never seem to be that bad. Strange share and a bit disappointing.

[orange1] 16/9/2016 20:29

Teletubbies licensees Licensees are reporting strong sell through on the first wave of products, some ahead of expectations as DHX Media appoints new broadcasters for Teletubbies.



‘Teletubbies continues to perform extremely well and is gaining global momentum,’ says DHX Media’s Dana Landry.

DHX Media has bolstered its offering for Teletubbies with the addition of seven new broadcast deals.

New broadcast licensees include SRC (Canada), POP TV (Slovenia), TV3 (Ireland), HRT (Croatia), Medialaan (Belgium), MTG (Lithuania), and NRK (Norway, for Sami language).

“As the flagship series in DHX Media’s strategy to build global brands, Teletubbies continues to perform extremely well and is gaining global momentum,” said Dana Landry, CEO of DHX Media.

“Children love the new show and the consumer products built off the brand. Licensees are reporting strong sell through on the first wave of products, some ahead of expectations, which bodes well as more categories are set to roll out.

“Both the series and toys are scoring high ratings in the UK, while the show is off to a positive start in the US and international broadcasters continue to come on board. We expect to continue making tremendous strides with the brand in fiscal 2017 and beyond.”

The new deals take the total number of broadcasters to 23 for the pre-school show, while DHX Media has signed more than 85 merchandising and licensing deals for Teletubbies to date.

[coppertrader] 15/9/2016 17:54

Character Group plc (LON:CCT)'s stock had its "buy" rating reiterated by investment analysts at Panmure Gordon in a research report issued to clients and investors on Wednesday. They presently have a GBX 635 ($8.46) price target on the stock. Panmure Gordon's target price would indicate a potential upside of 33.68% from the company's current price.

[carcosa] 15/9/2016 06:14

Updated note from Allenby: hxxp://allenbycapital.com/research/research-char_15_3723852609.pdf Maintaining 700p price target.

[h1a3] 15/9/2016 00:10

A reasonable article in tomorrow's Daily Mail re CCT and Twozies.

[orange1] 14/9/2016 10:22

So who are Twozies?

This was published back in June:

Twozies is a line of little babies and pets who do everything together. Presented in shadow boxes that can be stacked or mounted, each character is collectable in its own way, but can be pairing to its matching friend.

"Collectables are really driving the dolls category at present," said Jerry Healy, marketing director of Character Options.

"Finding your perfect match, plus the celebration of friendship and the realisation that everything is better when done together, is at the core of Twozies brand DNA and is the unique point of difference from anything else in the market and will get kids hooked.

"We are delighted therefore to be launching Twozies; we believe it has a winning formula.”

Series one of Twozies will launch with over 140 characters to collect find and match, plus play-sets displayed in a large shadow box will also be available.

Twozies will launch in late August with a huge marketing drive, details of which will be announced in coming weeks.

[tintin82] 14/9/2016 09:16

'All our major product ranges have performed well.' That's teletubbies

[carcosa] 14/9/2016 07:44

No mention of Teletubbies? Strange.

[campbed] 14/9/2016 07:17

In-line trading update for the year ending 31Aug. Nothing about USD hedges.