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CCT.GB Character Group Plc

268.00
0.00 (0.00%)
06:57:51 - Realtime Data
Share Name Share Symbol Market Type Share ISIN Share Description
Character Group Plc AQSE:CCT.GB Aquis Stock Exchange Ordinary Share GB0008976119
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 268.00 258.00 278.00 268.00 268.00 268.00 0.00 06:57:51
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Character Group PLC AUDITED ANNUAL RESULTS -YEAR ENDED 31 AUGUST 2022 (5932K)

22/12/2022 7:00am

UK Regulatory


Character (AQSE:CCT.GB)
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TIDMCCT

RNS Number : 5932K

Character Group PLC

22 December 2022

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

LONDON : Thursday, 22 December 2022

THE CHARACTER GROUP PLC

("Character", "Group" or "Company")

Designers, developers and international distributor of toys, games and giftware

AUDITED ANNUAL RESULTS FOR THE YEARED 31 AUGUST 2022

The information contained within this announcement is a summary taken from the Group's audited 2022 Annual Report and Accounts, which can be viewed in full on the Company's website at: www.thecharacter.com . The 2022 Annual Report and Accounts will also be posted to shareholders who have elected to receive printed copies.

The Company gives notice that the 2023 Annual General Meeting of the Company will be held at , 86 - 88 Coombe Road, New Malden, Surrey, KT3 4QS on Friday, 20 January 2023 at 11.00 am. T he Notice of AGM appears at the end of the 2022 Annual Report and Accounts.

Highlights:

 
 KEY PERFORMANCE INDICATORS                        12 months   12 months ended 
                                                       ended    31 August 2021 
                                                   31 August 
                                                        2022 
                                                 ----------- 
 Revenue                                           GBP176.4m         GBP140.0m 
 Operating profit (before highlighted items)        GBP11.4m          GBP11.2m 
  * 
 Profit before tax (before highlighted items)       GBP11.3m          GBP11.1m 
  * 
 Statutory profit before tax                        GBP11.4m          GBP15.3m 
 EBITDA                                             GBP14.2m          GBP14.0m 
 
 Basic earnings per share before highlighted 
  items*                                              45.73p            40.92p 
 Diluted earnings per share before highlighted 
  items*                                             44.77 p            40.37p 
 
 Basic earnings per share after highlighted 
  items                                              46.37 p            56.86p 
 Diluted earnings per share after highlighted 
  items                                               45.39p            56.09p 
 
 Dividends declared per share for the year             17.0p             15.0p 
 
 Net assets                                         GBP38.9m          GBP44.9m 
 Net cash                                           GBP20.0m          GBP35.9m 
-----------------------------------------------  -----------  ---------------- 
 
 
 *Excludes: 
  Mark to market profit adjustments on FX 
  derivative positions                      GBP0.2m   GBP2.1m 
  Profit on sale of property                      -   GBP2.0m 
 
 
 
        *    Notable performers in 2022 included Goo Jit Zu - 
             distributed in over 40 territories, Chill Factor , 
             Weebles , Cra-Z-Art Shimmer 'n Sparkle and Peppa Pig 
 
        *    Toy Retailers Association's prestigious "DreamToys", 
             'Top 12 list' for Christmas included two of our 
             products, namely Heroes of Goo Jit Zu and Jiggly Pets 
             Gigi the Giraffe 
      Going into 2023: 
 
        *    the Group has a strong product offering for its 
             markets and has been very well received by customers 
 
        *    The new ranges and additions include new products 
             under our multi-territory Stretch Armstrong product 
             range including Star Wars and Transformers; a line of 
             Teenage Mutant Ninja Turtles products from Playmates 
             International for domestic distribution to coincide 
             with a new Turtles movie to be released in the second 
             half; and the distribution of exciting toy ranges 
             from Bonkers Toys based on the Aphmau and Lanky Box 
             brands. 
 

"The strength of our brands and products portfolio in 2022 has enabled us to significantly increase sales despite intense margin pressure T rading conditions have become more challenging and sales have slowed in the lead up to Christmas and combined with other factors will adversely affect the Group's performance in the first half of the current financial year."

This being said, as we look ahead on the back of a strong 2023 offering, international sales are forecast to grow significantly in the second half of the current financial year with margin improvement from that time. Although we expect domestic sales to be flat in the second half, the substantial reductions in freight rates, together with reduced costs of production from factories in China and strengthening of Sterling against the US Dollar from its recent low point has given the Board considerable optimism for a second half rebound."

 
ENQUIRIES: 
 
The Character Group plc 
 Jon Diver, Joint Managing Director 
 Kiran Shah, Joint Managing Director & Group Finance Director 
 Office: +44 (0) 208 329 3377 
 Mobile: +44 (0) 7831 802219 (JD) 
 Mobile: +44 (0) 7956 278522 (KS) 
Email: info@charactergroup.plc.uk 
 
 
                                            FTSE sector : leisure 
                                FTSE AIM All-share: symbol: CCT.L 
                                            Market cap : GBP 82 m 
     Product ranges can be viewed at www.character-online.co.uk . 
Panmure Gordon 
 (Nominated Adviser and Joint Broker) 
 Atholl Tweedie, Investment Banking 
 Rupert Dearden / Charles Leigh-Pemberton, Corporate Broking 
 Tel: +44 (0) 20 7886 2500 
 
Allenby Capital Limited 
 (Joint Broker) 
 Nick Athanas, Corporate Broking 
 Amrit Nahal, Sales & Corporate Broking 
 Tel: +44 (0) 20 3328 5656 
 
TooleyStreet Communications Limited 
 (Investor and media relations) 
 Fiona Tooley 
 Tel: +44 (0) 7785 703523 
 Email: fiona@tooleystreet.com 
 
 
 
Note: 
            The Key Performance Indicators (KPI's) table shown at the top of this 
             Announcement provide the data on an underlying basis and, also by reference 
             to Generally Accepted Accounting Practice (GAAP) as adopted and applied 
             consistently by the Group. 
 

THE CHARACTER GROUP plc

Designers, developers and international distributor of toys, games and giftware

FINAL AUDITED RESULTS FOR THE YEARED 31 AUGUST 2022

INTRODUCTION

The preliminary indications given in the trading update issued by the Company on 4 October 2022 have been confirmed in the final results for the year ended 31 August 2022, with the Group delivering a creditable profit before tax before highlighted items, of GBP11.3m. The turnover in the year improved significantly to GBP176.4m (FY 2021: GBP 140.0m ), driven primarily by increased sales of the Group's Goo Jit Zu product line in the USA. However, increases in costs of materials, production and freight throughout the year, resistance to price increases and, increasingly in the second half, the strengthening of the US Dollar have eroded margins and denied the Group a corresponding uplift in profitability.

The Group continued to be cash generative, delivering GBP4.2m of cash from operations in the year (2021: GBP27.3m), despite an increase in inventories of GBP15.3m due to a conscious decision to bring stock in early. We finished the year with a net cash balance of GBP20.0m (2021: GBP35.9m), after funding the GBP13.6m tender offer buyback of shares , which completed in February 2022.

OPERATIONAL PERFORMANCE

Group revenue in the year to 31 August 2022 was GBP 176.4m , against a turnover of GBP 140.0 m in the comparable 2021 period. The gross profit margin was 23.5 % (FY 2021: 28.9%) and, on an absolute basis, the gross profit was GBP41.3 m compared to GBP40.4m for the previous year.

A significant proportion of the Group's purchases are made in US dollars; the Group is therefore exposed to foreign currency fluctuations and manages the associated risk through the purchase of forward exchange contracts and derivative financial instruments. Under International Financial Reporting Standards (IFRS), at the end of each reporting period the Group is required to make an adjustment in its financial statements to incorporate a "mark to market" valuation of such financial instruments. The "mark to market" adjustment for this financial period results in a notional profit of GBP0.2m. This compares to a corresponding notional profit of GBP2.1m reported in the year to 31 August 2021. These "mark to market" adjustments are non-cash items calculated by reference to unpredictable and sometimes volatile currency spot rates at the relevant balance sheet dates. To present the results on a "normal" basis, these "mark to market" profit adjustments on FX derivative positions are excluded, although shown separately as "highlighted items" to demonstrate the "underlying" position.

The Group is reporting a profit before tax in the period under review after highlighted items, of GBP 11.4 m (FY 2021: GBP 15.3 m). Underlying earnings before interest, tax, depreciation and amortisation were GBP14.2m (FY 2021: GBP14.0m).

Underlying basic earnings per share before highlighted items amounted to 45.73p (FY 2021: 40.92 p). Diluted earnings per share, on the same basis, were 44.77p (FY 2021: 40.37p).

Basic earnings per share after highlighted items were 46.37p (FY 2021: 56.86p). Diluted earnings per share, on the same basis, were 45.39p (FY 2021: 56.09p).

FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW

The Group's net assets at 31 August 2022 totalled GBP 38.9 m (FY 2021: GBP 44.9 m), the reduction reflecting the GBP13.6m buyback of approximately 10% of the Company's issued voting share capital pursuant to the tender offer by the Company in the financial period.

Inventories were c.GBP 15.3 m higher at the end of the financial period at GBP 26.2 m (FY 2021 GBP 10.9 m), reflecting the Group's policy this year of making our purchases early; this stock is largely current product and should sell through.

During the period, the Group generated cash from operations of GBP4.2m (FY 2021: GBP 27.3 m), which was impacted by the substantially increased inventories held at the year-end. Net interest charges on short-term use of working capital facilities during the year amounted to GBP 0.2 m (FY 2021: GBP 0.1 m).

At the end of the financial year, the Group had a net cash position of GBP20.0m, compared to GBP35.9m at the end of the 2021 comparative period, despite financing the GBP13.6m tender offer buyback.

DIVID

The Board remains committed to maintaining a progressive dividend policy. Accordingly, the Directors will be recommending to shareholders a final dividend of 10.0p (2021 H2: 9.0 p per share). This, together with the interim dividend of 7.0 p per share paid in July 2022, will bring the total dividend for the year to 17.0p per share (FY 2021: 1 5.0 p), an increase of 13.3%. The total dividend for the year is covered approximately 2.7 times by underlying annual earnings (2021: 2.7 times).

Subject to approval by shareholders at the Annual General Meeting ("AGM") at 11am on Friday, 20 January 2023, the following timetable will apply for this dividend:

 
 Event                         Date 
 Ex-dividend date   12 January 2023 
                   ---------------- 
 Record date        13 January 2023 
                   ---------------- 
 Payment date       27 January 2023 
                   ---------------- 
 

OUR PRODUCT PORTFOLIO

The strength of our brands and products portfolio has enabled us to significantly increase sales at a time when margins have come under intense pressure. The notable performers during the year under review were Goo Jit Zu (our star product range which is being distributed in over 40 territories and continues to maintain a strong presence), Chill Factor (the brand acquired in 2021 which we have reinvigorated and which has significantly increased its domestic and international penetration), Weebles (the " wibbly wobbly fun" concept that has proved to have lasting consumer appeal and now features in our Peppa Pig , Bluey , Cocomelon and My Little Pony licensed product ranges), Cra-Z-Art Shimmer 'n Sparkle (the popular ranges of play makeup, nail bar, body art and beauty products and accessories) and Peppa Pig (our range of toys developed through our continued and valued collaboration with Hasbro).

Once again, in November 2022 we featured in the Toy Retailers Association's prestigious "DreamToys", which showcases the most sought-after toy categories in the UK for Christmas 2022. We were delighted that the 'Top 12 list' included two of our products, namely Heroes of Goo Jit Zu and Jiggly Pets Gigi the Giraffe .

A number of exciting new brand concepts, additions and extensions, including of our own brands, will be added to our offering and unveiled during the London Toy Fair in January 2023 and through to Spring next year.

The Group's current portfolio of products and brands can be viewed at www.character-online.com .

PROXY

The Scandinavian markets have been subjected to very similar conditions to our domestic market in the UK and the strength of the US Dollar in particular resulted in a broadly comparable outcome for the Group's Scandinavian operations to that of the previous year. The integration of Proxy into the Group has continued with a large degree of alignment in the product listings, processes and procedures being achieved during the year under review.

It is encouraging to report that two of Proxy's hero products, the Pokémon toy products range from Jazwares and the extensive range of Funko collectable Pop! figurines, have sold well in the Scandinavian territories and continue to be solid brands .

SHARE BUY-BACK PROGRAMME

In the period under review, the Company acquired for cancellation a total of 2,142,572 ordinary shares in the Company at an aggregate cost of GBP13.5m (excluding associated costs) and a cost of GBP6.30 per ordinary share (FY 2021: nil). This buyback was made pursuant to a tender offer issued on behalf of the Company on 28 January 2022 and completed in February 2022. The Company currently has a remaining authority to buy-back up to a further 1,057,428 ordinary shares under the authority granted at the AGM in January 2022, which authority will expire at the 2023 AGM.

It remains part of the Group's overall strategy to continue to repurchase the Company's own shares, when considered appropriate. The Board believes that it is in the Company's and all investors' interests to provide shareholders who wish to realise part or all of their investment in the Company with an opportunity to access liquidity that is not otherwise available in the market and to return excess capital to shareholders. Therefore, the Board will be seeking a new authority to buy back up to 2,890,000 ordinary shares (constituting approximately 15% of the total voting rights in the Company) at the 2023 AGM. This authority will also allow the Company to implement buybacks either by way of an announced buyback programme or by way of further tenders for its issued shares. In line with the Board's buyback strategy, the Company will continue to repurchase the Company's own shares as and when considered appropriate. Details of any intention to exercise this authority will be announced and any tender proposal(s) will be fully communicated to shareholders if and when the Board resolves to implement such arrangements.

TOTAL VOTING RIGHTS

As at today's date, the Company has 21,465,929 ordinary shares in issue, excluding shares held in treasury. The Company holds 2,149,477 ordinary shares in treasury, representing approximately 10.0 per cent. of the issued share capital, which do not carry voting or dividend rights. Therefore, the total number of voting rights in the Company is 19,316,452 . This figure of 19,316,452 may be used by shareholders as the denominator for the calculations by which they may determine if they are required to notify their interest, or change to their notified interest, in the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

OUR PEOPLE

The Group employs approximately 216 permanent staff across its locations in the UK, Scandinavia and Asia (FY 2021: 209), supplemented by additional seasonal labour at its warehouses in Oldham during peak demand periods. The longevity of staff employment with the Group, many with over 15 years' service, demonstrates the bond and loyalty that many of them feel towards their colleagues and the Group as a whole.

On behalf of our shareholders, the Board pays tribute to and thanks all our personnel for their dedication and hard work in delivering the results for the year under review and for their continued support.

THE BOARD

The Board was delighted to announce the appointment of Jonathan Shearman as an additional independent, non-executive director in June 2022. Jonathan has been appointed to all of the Board's committees and to the Chair of the Board's Remuneration Committee and has already had a positive impact on the Company's governance.

David Harris, who joined us in 2004 and is the longest serving non-executive director, has notified the Board that he wishes to retire and therefore he will not be offering himself for re-election at our AGM in January 2023. On behalf of all shareholders and staff around the business, the Board thanks David for his valued service and wise counsel over the years; we wish him all the best for the future.

As announced in June 2022, Mike Hyde, the Managing Director of the Group's Far East operations, will be relinquishing his executive role from 31 December 2022 to pursue other challenges. He will, however, remain on the Board in a non-executive capacity from 1 January 2023. We have greatly appreciated Mike's contributions over the years. Since July this year, he has worked closely with the general manager appointed to replace him , to ensure an orderly transition of responsibilities.

THE 2023 ANNUAL GENERAL MEETING (AGM)

The Company's 2023 AGM will take place as an in-person meeting at 11:00 a.m. on Friday, 20 January 2023. The Meeting is to be held at the Group's head office in New Malden, Surrey and the formal notice of the meeting is set out in the Audited Annual Report and Accounts. Explanatory notes in relation to the resolutions to be proposed at the AGM are set out at the end of the notice of meeting . Attendance can be in person or by proxy or, in the case of a company or organisation, by appointment of a corporate representative.

The Company is providing facilities which will enable shareholders to:

   -      view the live meeting electronically.  If you wish to attend in this fashion, please email info@charactergroup.plc.uk  (stating "Character Group: 2023 AGM virtual attendance" in the subject line of the email) by 11:00 a.m. on Wednesday, 18 January 2023 to ensure the issue to you of a Microsoft Teams invitation. Invitations enabling remote attendance will be issued by 6:00 p.m. on 19 January 2023.  Please note, however, that joining remotely will not constitute attendance at the meeting for the purposes of being counted in the quorum for the AGM and that virtual attendees will not be able to vote at the AGM.  Shareholders wishing to attend the meeting virtually in this fashion are, therefore, requested to exercise their votes by submitting their forms of proxy appointing the Chair of the AGM as their proxy, in accordance with the instructions set out in the notice of meeting by no later than 11:00 a.m. on 18 January 2023.  If the Chair of the AGM is appointed as proxy to a shareholder, he will vote in accordance with any instructions given to him. If the Chair of the meeting is given discretion as to how to vote, he will vote in favour of each of the resolutions to be proposed at the AGM; and 

- submit written questions prior to the AGM. Any shareholder that wishes to put questions to the Board is invited to submit those questions in writing in advance of the meeting by sending them to info@charactergroup.plc.uk (stating "Character Group: 2023 AGM Questions" in the subject line of the email) by 11:00 a.m. on 18 January 2023. The Board will seek to respond to questions which are put forward in this way either in advance of the AGM, during the AGM and/or by publishing written responses on the Company's website after the AGM, together with results of voting. Although it will be possible to take questions during the course of the meeting itself, time may not permit responses to all of the questions to be given at the meeting and, in those circumstances, written responses will be published on the Company's website after the meeting.

OUTLOOK

As we anticipated at the time of the update in October 2022, trading conditions have become more challenging and sales have slowed in the lead up to Christmas. Whilst this has been a trend in both our domestic markets and in our other major international markets, the effect has been particularly discernible in the USA. In addition, the weakening of sterling in September and October 2022 has continued to squeeze margins in our domestic markets. These factors will adversely affect the Group's performance in the first half of the current financial year. The slow-down in sales means the Group's stock levels remain unseasonably high but the Board expects these will sell through as it is largely current inventory.

The Group has a strong product offering for its markets going into 2023. The recent previews and presentations of our 2023 ranges and new additions to our retail and distribution customers have been very well received by customers. The new ranges and additions include:

- new products under our multi-territory Stretch Armstrong product range, including Star Wars and Transformers ;

- a line of Teenage Mutant Ninja Turtles products from Playmates International for domestic distribution in the UK and Ireland, to coincide with a new Turtles movie to be released in the second half; and

- the distribution of exciting toy ranges from Bonkers Toys based on the Aphmau and Lanky Box brands established by two influencer concepts that have generated large followings on social media and created YouTube stars.

International sales, other than those to USA, are forecast to grow significantly in the second half of the current financial year. Although we expect domestic sales to be flat in the second half, the substantial reductions in freight rates, which have now returned to (if not reduced below) pre-pandemic levels, together with reduced costs of production from factories in China and strengthening of Sterling against the US Dollar from its recent low point, should improve our margins. This is greatly heartening and has given the Board considerable grounds for optimism for a second half rebound.

Character Group has a strong balance sheet and is debt-free, with cash and considerable unutilised working capital facilities. The business continues to trade satisfactorily and shall be profitable for the financial year as a whole. The Board is, accordingly, committed to maintaining its progressive dividend policy.

The Board looks forward to further updating shareholders at the time of its forthcoming AGM on the outcome of the 2022 Christmas trading period.

22 December 2022

 
                                                                                              GROUP INCOME STATEMENT 
                                                                                   for the year ended 31 August 2022 
-------------------------------------------------------------------------------------------------------------------- 
                                  12 months                                   12 months 
                                      ended                                       ended 
                                  31 August       12 months    12 months      31 August       12 months    12 months 
                                       2022           ended        ended           2021           ended        ended 
                                     Result       31 August    31 August         Result       31 August    31 August 
                                     before            2022         2022         before            2021         2021 
                                highlighted     highlighted    Statutory    highlighted     highlighted    Statutory 
                                      items           items       Result          items           items       Result 
 
                        Note        GBP'000         GBP'000      GBP'000        GBP'000         GBP'000      GBP'000 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Revenue                   1        176,402               -      176,402        139,997               -      139,997 
 Cost of sales                    (135,036)               -    (135,036)       (99,553)               -     (99,553) 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Gross profit                        41,366               -       41,366         40,444               -       40,444 
 Other income                           502               -          502            332               -          332 
 Selling and 
  distribution 
  expenses                          (8,260)               -      (8,260)        (8,248)               -      (8,248) 
 Administrative 
  expenses                         (22,173)               -     (22,173)       (21,301)               -     (21,301) 
 Profit on sale of 
  property                                -               -            -              -           2,016        2,016 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Operating profit          2         11,435               -       11,435         11,227           2,016       13,243 
 Finance income                          51               -           51             36               -           36 
 Finance costs                        (207)               -        (207)          (113)               -        (113) 
 Changes in fair 
  value 
  of financial 
  instruments                             -             159          159              -           2,128        2,128 
 Profit before tax                   11,279             159       11,438         11,150           4,144       15,294 
 Income tax                         (2,018)            (30)      (2,048)        (2,353)           (737)      (3,090) 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Profit for the 
  period                              9,261             129        9,390          8,797           3,407       12,204 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 
   Attributable to: 
 Owners of the parent                                              9,390                                      12,156 
 Non-controlling 
  interest                                                             -                                          48 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Profit for the 
  period                                                           9,390                                      12,204 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 
 Earnings per share 
 before 
 highlighted items 
 (pence) 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Basic earnings per 
  share                    3                                      45.73p                                      40.92p 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Diluted earnings per 
  share                    3                                      44.77p                                      40.37p 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Earnings per share 
 after 
 highlighted items 
 (pence) 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Basic earnings per 
  share                    3                                      46.37p                                      56.86p 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 Diluted earnings per 
  share                    3                                      45.39p                                      56.09p 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 
 Dividend per share 
  (pence)                  4                                       16.0p                                        9.0p 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 
 EBITDA 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 (earnings before 
  interest, 
  tax, depreciation, 
  amortisation 
  and gain on 
  property 
  disposal)                                                       14,195                                      14,036 
---------------------  -----  -------------  --------------  -----------  -------------  --------------  ----------- 
 
 
                                   GROUP STATEMENT OF COMPREHENSIVE INCOME 
                                         for the year ended 31 August 2022 
-------------------------------------------------------------------------- 
                                                         Total       Total 
                                                          2022        2021 
                                                      GBP000's    GBP000's 
------------------------------------------------    ----------  ---------- 
 Profit for the year after tax                           9,390      12,204 
--------------------------------------------------  ----------  ---------- 
 Items that may be reclassified subsequently 
  to profit and loss 
 Exchange differences on translation of foreign 
  operations                                             1,070           - 
 Income tax on exchange differences                         21           7 
-------------------------------------------------   ----------  ---------- 
 Other comprehensive income/(expense) for 
  the year, net of income tax                            1,091           7 
-------------------------------------------------   ----------  ---------- 
 Total comprehensive income for the year                10,481      12,211 
--------------------------------------------------  ----------  ---------- 
 Total comprehensive income for the year 
  attributable to: 
 Equity holders of the parent                           10,481      12,163 
 Non-controlling interest                                    -          48 
--------------------------------------------------  ----------  ---------- 
                                                        10,481      12,211 
  ------------------------------------------------  ----------  ---------- 
 
 
                                                     GROUP BALANCE SHEET 
                                                    as at 31 August 2022 
------------------------------------------------------------------------ 
                                                        2022        2021 
                                                    GBP000's    GBP000's 
----------------------------------------------    ----------  ---------- 
 Non - current assets 
 Intangible assets                                     1,963       1,806 
 Investment property                                   1,453       1,519 
 Property, plant and equipment                         9,307       8,230 
 Right of use assets                                   1,216       1,454 
 Deferred tax assets                                     542         243 
------------------------------------------------  ----------  ---------- 
                                                      14,481      13,252 
  ----------------------------------------------  ----------  ---------- 
 Current assets 
 Inventories                                          26,173      10,893 
 Trade and other receivables                          24,728      26,019 
 Current income tax receivable                           576         766 
 Derivative financial instruments                        412          75 
 Cash and cash equivalents                            26,646      35,920 
-----------------------------------------------   ----------  ---------- 
                                                      78,535      73,673 
  ----------------------------------------------  ----------  ---------- 
 Current liabilities 
 Short-term borrowings                               (6,627)           - 
 Trade and other payables                           (42,151)    (38,390) 
 Lease Liabilities                                     (577)       (557) 
 Income tax                                          (3,345)     (1,610) 
 Derivative financial instruments                      (343)       (165) 
                                                    (53,043)    (40,722) 
  ----------------------------------------------  ----------  ---------- 
 Net current assets                                   25,492      32,951 
------------------------------------------------  ----------  ---------- 
 Non-current liabilities 
 Deferred tax                                          (427)       (405) 
 Lease liabilities                                     (648)       (946) 
------------------------------------------------  ----------  ---------- 
                                                     (1,075)     (1,351) 
  ----------------------------------------------  ----------  ---------- 
 Net assets                                           38,898      44,852 
------------------------------------------------  ----------  ---------- 
 Equity 
 Called up share capital                               1,074       1,181 
 Shares held in treasury                             (1,813)     (1,870) 
 Capital redemption reserve                            1,883       1,776 
 Share-based payment reserve                           3,957       3,749 
 Share premium account                                17,566      17,324 
 Merger reserve                                          651         651 
 Translation reserve                                   1,950         767 
 Profit and loss account                              13,630      21,274 
------------------------------------------------  ----------  ---------- 
 Attributable to equity holders of the parent         38,898      44,852 
------------------------------------------------  ----------  ---------- 
 Total equity                                         38,898      44,852 
------------------------------------------------  ----------  ---------- 
 
 
GROUP CASH FLOW STATEMENT 
 as at 31 August 2022 
                                                                          Group 
                                                                           2022                     2021 
                                                                       GBP000's                 GBP000's 
----------------------------------------------   ------------------------------  ----------------------- 
Cash flow from operating activities 
 Profit before taxation for the year after 
 highlighted items                                                       11,438                   15,294 
-----------------------------------------------  ------------------------------  ----------------------- 
Adjustments for: 
Depreciation of property, plant and equipment                               556                      567 
Depreciation of investment property                                          66                       65 
Depreciation of right of use assets                                         632                      556 
Amortisation of intangible assets                                         1,509                    1,621 
Write off plant and equipment                                                 -                      132 
(Profit) on disposal of property, plant and 
 equipment                                                                  (3)                  (2,028) 
Net interest expense                                                        156                       77 
Financial instruments fair value adjustments                              (159)                  (2,128) 
 Share-based payments                                                       208                      380 
(Increase)/decrease in inventories                                     (15,280)                    3,853 
Decrease / (increase) in trade and other 
 receivables                                                              1,291                  (3,006) 
 Increase in trade and other creditors                                    3,761                   11,957 
-----------------------------------------------  ------------------------------  ----------------------- 
Cash generated/(utilised) from operations                                 4,175                   27,340 
-----------------------------------------------  ------------------------------  ----------------------- 
Finance income                                                               51                       36 
Finance expense                                                           (207)                    (113) 
Income tax paid                                                           (401)                  (1,788) 
-----------------------------------------------  ------------------------------  ----------------------- 
Net cash inflow/(outflow) from operating 
 activities                                                               3,618                   25,475 
-----------------------------------------------  ------------------------------  ----------------------- 
Cash flows from investing activities 
Purchase of business                                                          -                    (945) 
 Payments for intangible assets                                         (1,666)                  (1,615) 
Payments for property, plant and equipment                              (1,845)                  (7,128) 
Proceeds from disposal of property, plant 
 and equipment                                                              225                    3,458 
Net cash outflow from investing activities                              (3,286)                  (6,230) 
-----------------------------------------------  ------------------------------  ----------------------- 
Cash flows from financing activities 
Payment of lease liabilities                                              (538)                    (606) 
Proceeds from issue of share capital                                        299                        - 
Purchase of own shares for cancellation                                (13,640)                        - 
Dividends paid                                                          (3,280)                  (1,924) 
Net cash used in financing activities                                  (17,159)                  (2,530) 
-----------------------------------------------  ------------------------------  ----------------------- 
Net (decrease)/increase in cash and cash 
 equivalents                                                           (16,827)                   16,715 
Cash, cash equivalents and borrowings at 
 the beginning of the year                                               35,920                   19,124 
Effects of exchange rate movements                                          926                       81 
-----------------------------------------------  ------------------------------  ----------------------- 
Cash, cash equivalents and borrowings at 
 the end of the year                                                     20,019                   35,920 
-----------------------------------------------  ------------------------------  ----------------------- 
 

Cash, cash equivalents and borrowings consist of:

 
Cash and cash equivalents                    26,646  35,920 
Total borrowings                            (6,627)       - 
------------------------------------------  -------  ------ 
Cash, cash equivalents and borrowings at 
 the end of the year                         20,019  35,920 
------------------------------------------  -------  ------ 
 
 
                                                                                                          GROUP STATEMENT OF CHANGES IN EQUITY 
                                                                                                             for the year ended 31 August 2022 
---------------------------------------------------------------------------------------------------------------------------------------------- 
                              Shares                                                                     Profit 
                   Called       held      Capital      Share              Share-based                       and    Non-controlling 
                 up share         in   redemption    premium     Merger       payment    Translation       loss           interest 
                  capital   treasury      reserve    account    reserve       reserve        reserve    account           GBP000's       Total 
                 GBP000's   GBP000's     GBP000's   GBP000's   GBP000's      GBP000's       GBP000's   GBP000's                       GBP000's 
-------------   ---------  ---------  -----------  ---------  ---------  ------------  -------------  ---------  -----------------  ---------- 
 The Group 
 At 1 
  September 
  2020              1,181    (1,870)        1,776     17,324        651         3,369            727     11,231              (343)      34,046 
--------------  ---------  ---------  -----------  ---------  ---------  ------------  -------------  ---------  -----------------  ---------- 
 Profit for 
  the 
  year after 
  tax                                                                                                    12,156                 48      12,204 
==============  =========  =========  ===========  =========  =========  ============  =============  =========  =================  ========== 
 Other comprehensive income/(expense) 
 Net exchange 
  differences 
  on 
  translation 
  of 
  foreign 
  operations            -          -            -          -          -             -             40       (28)                (5)           7 
 Total other comprehensive expense                                                                40       (28)                (5)           7 
-------------------------------------------------------------------------------------  -------------  ---------  -----------------  ---------- 
 Total comprehensive income for the year                                                          40     12,128                 43      12,211 
-------------------------------------------------------------------------------------  -------------  ---------  -----------------  ---------- 
 Transactions with owners, recorded directly in equity 
 Change in non 
  controlling 
  interest              -          -            -          -          -             -              -      (300)                300           - 
 Share-based 
  payment               -          -            -          -          -           380              -          -                  -         380 
 Deferred tax 
  debit 
  relating 
  to share 
  options               -          -            -          -          -             -              -        139                  -         139 
 Dividends              -          -            -          -          -             -              -    (1,924)                  -     (1,924) 
 At 31 August 
  2021              1,181    (1,870)        1,776     17,324        651         3,749            767     21,274                  -      44,852 
--------------  ---------  ---------  -----------  ---------  ---------  ------------  -------------  ---------  -----------------  ---------- 
 Profit for 
  the 
  year after 
  tax                                                                                                     9,390                          9,390 
==============  =========  =========  ===========  =========  =========  ============  =============  =========  =================  ========== 
 Other comprehensive income/(expense) 
 Net exchange 
  differences 
  on 
  translation 
  of 
  foreign 
  operations            -          -            -          -          -             -          1,183       (92)                  -       1,091 
 Total other comprehensive expense                                                             1,183       (92)                  -       1,091 
-------------------------------------------------------------------------------------  -------------  ---------  -----------------  ---------- 
 Total comprehensive income for the year                                                       1,183      9,298                  -      10,481 
-------------------------------------------------------------------------------------  -------------  ---------  -----------------  ---------- 
 Transactions with owners, recorded directly in equity 
 Share-based 
  payment               -          -            -          -          -           208              -          -                  -         208 
 Current tax 
  credit 
  relating to 
  exercised 
  share 
  options               -          -            -          -          -             -              -         18                  -          18 
 Deferred tax 
  debit 
  relating 
  to share 
  options               -          -            -          -          -             -              -       (40)                  -        (40) 
 Dividends              -          -            -          -          -             -              -    (3,280)                  -     (3,280) 
 Shares Issued          -         57            -        242          -             -              -          -                  -         299 
 Tender offer 
  fees                  -          -            -          -          -             -              -      (142)                  -       (142) 
 Shares 
  cancelled 
  on tender 
  offer             (107)          -          107          -          -             -              -   (13,498)                  -    (13,498) 
 At 31 August 
  2022              1,074    (1,813)        1,883     17,566        651         3,957          1,950     13,630                  -      38,898 
--------------  ---------  ---------  -----------  ---------  ---------  ------------  -------------  ---------  -----------------  ---------- 
 

The financial statements were approved by the Board of Directors on 21 December 2022, and were signed on its behalf by:

 
 J J Diver         K P Shah 
  Joint Managing    Joint Managing Director and Group 
  Director          Finance Director 
 

NOTES

   1.     GEOGRAPHICAL DESTINATION OF REVENUE 
 
                         31 August   31 August 
                              2022        2021 
                          GBP000's    GBP000's 
-------------------     ----------  ---------- 
 United Kingdom             84,605      79,509 
 Rest of the world          91,797      60,488 
----------------------  ----------  ---------- 
 Total Group               176,402     139,997 
----------------------  ----------  ---------- 
 
   2.     EXPENSES BY NATURE - Group 
 
                                                                       12 months    12 months 
                                                                              to           to 
                                                                       31 August    31 August 
                                                                            2022         2021 
                                                                        GBP000's     GBP000's 
-------------------  -----------------------------------------  ---  -----------  ----------- 
 Operating profit is stated after charging/(crediting): 
 Cost of inventories recognised as an expense 
  (included in cost of sales)                                            117,586       88,729 
==========================================================   ======  ===========  =========== 
 Product development costs incurred                                        1,957        1,736 
 Product development costs capitalised                                   (1,666)      (1,615) 
 Amortisation of capitalised product development 
  costs                                                                    1,489        1,619 
==========================================================   ======  ===========  =========== 
 Product development costs expensed to 
  cost of sales                                                            1,780        1,740 
==========================================================   ======  ===========  =========== 
 ( Credit)/debit financial instruments 
  fair value adjustments                                                   (159)      (2,218) 
 Inventories debit / (credit)                                                634      (1,022) 
 Exchange losses                                                           2,406          130 
 Staff costs                                                              15,171       13,958 
 Depreciation of tangible fixed assets 
  - owned assets                                                             556          567 
 Depreciation of investment property                                          66           65 
 (Profit)/loss on disposal of property, 
  plant and equipment                                                        (3)      (2,028) 
 Depreciation - right of use assets                                          632          556 
 Auditor's remuneration                                                      160          141 
--------------------------------------------------------------  ---  -----------  ----------- 
 
 
   3.     Earnings per share - group 

The earnings used in the calculation of basic and diluted earnings per share are as follows:

 
                                                      Year ended      Year ended 
                                                       31 August       31 August 
                                                            2022            2021 
                                                    Profit after    Profit after 
                                                        taxation        taxation 
                                                             GBP             GBP 
------------------------------------------------  --------------  -------------- 
 Profit attributable to equity shareholders of 
  the parent                                           9,390,000      12,156,000 
------------------------------------------------  --------------  -------------- 
 Financial instruments fair value adjustments 
  net of tax                                           (129,000)     (1,724,000) 
------------------------------------------------  --------------  -------------- 
 Profit on sale of property net of tax                         -     (1,683,000) 
------------------------------------------------  --------------  -------------- 
 Profit for adjusted earnings per share                9,261,000       8,749,000 
------------------------------------------------  --------------  -------------- 
 
 Weighted average number of ordinary shares in 
  issue during the year - basic                       20,251,532      21,379,781 
  Weighted average number of dilutive potential 
   ordinary shares                                       436,409         291,974 
------------------------------------------------  --------------  -------------- 
 Weighted average number of ordinary shares for 
  diluted earnings per share                          20,687,941      21,671,755 
------------------------------------------------  --------------  -------------- 
 
 Earnings per share before highlighted items 
  Basic earnings per share (pence)                        45.73p          40.92p 
------------------------------------------------  --------------  -------------- 
 Diluted earnings per share (pence)                       44.77p          40.37p 
------------------------------------------------  --------------  -------------- 
 Earnings per share after highlighted items 
  Basic earnings per share (pence)                        46.37p          56.86p 
------------------------------------------------  --------------  -------------- 
 Diluted earnings per share (pence)                       45.39p          56.09p 
------------------------------------------------  --------------  -------------- 
 
   4.     DIVIDEND - group 
 
                                                        12 months    12 months 
                                                               to           to 
                                                        31 August    31 August 
                                                             2022         2021 
                                                         GBP000's     GBP000's 
----------------------------------------------------  -----------  ----------- 
 On equity shares: 
 Final dividend paid for the year ended 31 August 
  2021 
 9.0 pence (2020: 3.0 pence) per share                      1,929          642 
 Interim dividend paid for the year ended 31 August 
  2022 
 7.0 pence (2021: 6.0 pence) per share                      1,351        1,282 
----------------------------------------------------  -----------  ----------- 
 16.0 pence (2021: 9.0 pence) per share                     3,280        1,924 
----------------------------------------------------  -----------  ----------- 
 

The directors recommend a final dividend of 10.0 pence per share (2021: 9.00 pence) amounting to GBP1,930,745(2021: GBP1,924,000). If approved by shareholders, the final dividend will be paid on 27 January 2023 to shareholders on the register on 13 January 2023.

 
 5. ANNUAL REPORT AND ACCOUNTS 
================================================================================= 
 The financial information set out in the announcement does not constitute 
  the Company's statutory accounts for the years ended 31 August 2022 
  and 2021. The financial information for the year ended 31 August 2021 
  is derived from the statutory accounts for that year which have been 
  delivered to the Registrar of Companies. The financial information 
  for the year ended 31 August 2022 is derived from the statutory accounts 
  for that year and those accounts have today been published and may 
  be viewed and/or downloaded from the Company's website at www.thecharacter.com. 
  The auditors reported on each of those accounts: their report was 
  unqualified, did not draw attention to any matters by way of emphasis 
  and did not contain a statement under s498(2) or (3) of the Companies 
  Act 2006. The audited statutory accounts for the year ended 31 August 
  2022 will be delivered to the Registrar of Companies following the 
  Company's Annual General Meeting. 
 
 
 6. ANNUAL GENERAL MEETING 
========================================================================= 
 The Annual General Meeting will be held at 2(nd) Floor, 86-88 Coombe 
  Road, New Malden, Surrey KT3 4QS on Friday, 20 January 2023 at 11.00am. 
 
 
 7. ELECTRONIC COMMUNICATIONS 
=============================================================================== 
 The full Financial Statements for the year ended 31 August 2022, incorporating 
  the Notice of Meeting convening the Company's 2023 Annual General 
  Meeting, is available for viewing on and download from the Group's 
  website: www.character.com 
 

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