Character Group – A strong business

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The Character Group (LSE:CCT) has the same leaders today as when created in 1991. The three founders are Richard King, who is now Chairman; Joseph Kissane, now Managing Director of the main subsidiary, and; Kiran Shah, now Joint Managing Director and Finance Director.  Jonathan Diver joined in 1991 and was quickly promoted to Marketing Director. He is now Group Joint Managing Director.

Despite these managers having been around a long time they know how to keep up with the times.  They are continually scanning to decide how the company should morph to incorporate new product brands to maximise opportunities as they arise.

For example, at the time of its stock market flotation in 2004 CCT had a division devoted to digital products (mostly cameras), and another focused on sourcing giftware from the Far East and selling it in the UK, in addition to the division designing importing and distributing toys and games.  The camera and gift divisions have gone and been replaced with an ever-greater emphasis on toys.

In 2011 Zhu Zhu Pets (Disney) was a big hit and CCT had “outstanding success” with toys based on this animated series. But the next year, sales of Zhu Zhu Pets products fell by over £20m.

Also exciting in 2011 were the new line of toys based on Scooby Doo and Fireman Sam. Peppa Pig was in the line-up back then and still is, but the company also had Angry Birds, Bob the Builder, Squishies and Character Building. Of these 2011 products, only Fireman Sam, Squishies and Peppa Pig are part of the 41-brand line-up today.

None of the products introduced in 2012 are still around: Sports Stars, AppGear, XiaXia, Deadly60, Mike the Knight. And yet the profits of the company have leapt. It’s the case that either (a) a product has its time in the sun, and then dies, or (b) CCT try something, and it doesn’t work, so they move on.

More examples in 2013: CCT’s Tekstra, Zelfs and Minecraft products were in the Toy Retailer’s Association Dream Toys Top 50 list but are no longer in CCT’s range.

We can see the degree of evolution necessary to maintain leadership in the toy sector in the following list, which shows the current 41 brands, many of which have only been around for a few years.

Most brands are own-developed brands – as far back as 2011 60% of revenue came from own-created brands.

  • Ballerina Dancer
  • Ben & Holly’s. This was a key range in 2016 but has not been mentioned since.
  • Blinger
  • Chillfactor: a key range in 2014
  • Crazloom
  • Crazair sand
  • Shimmer ‘n Sparkle
  • Cra-Z-Slimy. In the “Dream Toy” list compiled by the Toy Retailer’s Association in 2018.  A top performer in 2018.
  • Disney Doorables
  • Doctor Who. Mentioned as a key range in 2014 and 2015, but not since.
  • Easy
  • Foam Alive
  • Fireman Sam. A key range in 2014 and 2015.
  • Fizz ‘N Surprise
  • Flip a Zoo
  • Glow Friends
  • Goo Goo Galaxy
  • Goo Jit Zu
  • Hair Dooz
  • Laser X. In “Dream Toy” list 2018
  • Little Live Pets. A key range in 2015 and 2016. Also, in “Dream Toy” list in 2018. A “core product” for CCT in 2018 – “top performing”.
  • Wrapples
  • Wraptiles
  • A key range in 2016
  • Mine It
  • Mocheez Babies
  • ORB Odditeez. In “Dream Toy” list 2018
  • Oonies
  • Orbeez
  • Peppa Pig. In “Dream Toy” list in 2018.  A “core product” for CCT in most years. In 2018: “top performing”.
  • Appointed master toy distributor in 2017 for UK and Eire
  • Postman Pat: a key range in 2016
  • RAD Robots. “Dream Toy” list in 2018
  • Skeleton Blast
  • Smart Sketcher
  • Soft ‘N Slo Squishies. “Dream Toy” list in 2018 and a top performer for CCT in 2018
  • Swarm Squad
  • Introduced 2016. A top performing product for CCT in 2018.
  • Stretch Armstrong: Introduced in 2017 and went into Toy Retailer’s Association “Dream Toy” list at number 12. Also in list for 2018. A “top performing” product for CCT in 2018.
  • Treasure X. In “Dream Toy” list in 2018
  • Zookiez Slappy

The shifts in product range over time indicates that moving on from a brand such as Peppa Pig is quite normal. Indeed, CCT’s managers will be discussing new licenses to take Peppa’s place as I write this.

More on the directors

The capabilities, experience and strong relationships built by the directors and other senior managers over three decades is key to the success of this business, so it is worth looking at them.

Jonathan Diver, 55, Joint MD

Joined from Rainbow Toys

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