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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Character Group Plc | LSE:CCT | London | Ordinary Share | GB0008976119 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 277.00 | 274.00 | 280.00 | 277.00 | 274.00 | 277.00 | 28,586 | 08:00:16 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Toys,hobby Gds & Supply-whsl | 122.59M | 3.5M | 0.1807 | 15.33 | 53.64M |
From Apr 2019 to Apr 2024
TIDMCCT
RNS Number : 4541Y
Character Group PLC
09 May 2019
LONDON, THURSDAY 9 MAY 2019
The information contained within this announcement
is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
The Character Group plc
Designers, developers and international distributor of toys, games and giftware
HALF YEARLY FINANCIAL REPORT
for the six months ended 28 February 2019
Hot Features
Premium
KEY PERFORMANCE INDICATORS Half-year Half-year Full-year
CONTINUING OPERATIONS ended ended ended
28 February 28 February 31 August
2019 2018 2018
------------- -------------
Revenue GBP58.8m GBP50.5m GBP106.2m
Operating profit* GBP5.9m GBP4.6m GBP11.7m
Pre-tax profit* GBP5.6m GBP4.5m GBP11.6m
Underlying basic earnings per share* 20.98p 16.96p 45.09p
Underlying diluted earnings per
share* 20.67p 16.64p 44.38p
Dividend per share 13.0p 11.0p 23.0p
EBITDA GBP6.9m GBP5.8m GBP13.6m
Net cash GBP19.8m GBP14.3m GBP15.6m
Net assets GBP33.5m GBP24.7m GBP31.8m
-------------------------------------- ------------- ------------- -----------
*Excludes mark to market (loss)
adjustments on FX derivative positions
and taxation thereon shown as significant
items GBP(0.3)m GBP(3.9)m GBP0.14m
---------- ----------
-- Character has delivered a strong first half
performance and the Directors remain optimistic about
the progress the business will make over this
calendar year and the important 2019/20 winter season
-- Leading in-house ranges include Peppa Pig and Stretch,
and exclusive, third-party lines including Little
Live Pets and Pokémon, all continue to trade
well
-- Character also continues to add exciting, innovative
ranges, such as Hair Dooz, Odditeez Ploppz, and OMG
pets
-- Impulse buying at the right price point is a growing
trend and Character has successfully tapped into this
category with innovative new trend lines being
sourced and introduced regularly. Our brands
currently include Cra.Z.Slimy, Treasure X and
Bubbleezz
-- The Group will be introducing further new products
and range extensions to its portfolio in the coming
months, which will further enhance and strengthen the
Group's product offering for the coming year.
-- The Board remains confident in its strategy and the
Group's flexibility to adapt to change
-- Group trading remains in line with management
expectations and market consensus.
FOLLOW THIS LINK To listen to the interview with JOINT MDs' jON dIVER AND kIRAN SHAH discussing WITH
brr MEDIA THE GROUP'S hy1 2019 PERFORMANCE AND OUTLOOK:
Live link: https://www.brrmedia.co.uk/broadcasts-embed/5cd29f46cfde5e11cc82430a/?cct&popup=true
FTSE sector: leisure: FTSE AIM All-share: symbol: CCT.L: Market cap: GBP122.2m Copies of this statement can be viewed at www.thecharacter.com. Product ranges can be viewed at www.character-online.co.uk. ENQUIRIES The Character Group plc Jon Diver, Joint Managing Director Kiran Shah, Joint Managing Director Office: +44 (0) 208 329 3377 Mobile: +44 (0) 7831 802219 (JD) Mobile: +44 (0) 7956 278522 (KS) Email: info@charactergroup.plc.uk Panmure Gordon (Nominated Adviser and Joint Broker) Atholl Tweedie, Investment Banking Charles Leigh-Pemberton, Corporate Broking Tel: +44 (0) 20 7886 2500 Allenby Capital Limited (Joint Broker) Nick Athanas Tel: +44 (0) 20 3328 5656 TooleyStreet Communications Limited (Investor and media relations) Fiona Tooley Tel: +44 (0) 7785 703523 Email: fiona@tooleystreet.com
The Character Group plc
(the "Company" or "Group" or "Character")
Designers, developers and international distributor of toys, games and giftware
HALF YEARLY FINANCIAL REPORT
for the six months ended 28 February 2019
INTRODUCTION
Character is pleased to report that, with the good sell-through at retail during the 2018 Christmas period, the business has had a solid start to the 2019 calendar year. With stocks remaining firmly under control, a further enhanced net cash position, a strong balance sheet and a proven and balanced product portfolio, the Group's performance and prospects remain healthy.
On 17 October 2018, we acquired a 55% shareholding in OVG-PROXY A/S ("Proxy"), a Danish toy distributor based in Copenhagen.
For the period to 28 February 2019, turnover at GBP58.8m was 16.5% up on the previous comparable period (GBP50.5m). Profit before tax increased to GBP5.6m (2018 HY1 2018: GBP4.5m) and the net cash at the end of the period was GBP19.8m (2018 HY1 2018: GBP14.3m).
OUR PORTFOLO
We work in a dynamic market place and our business model is designed and has evolved to have the necessary agility to operate efficiently in adapting to the demands of change. We work tirelessly to anticipate and then deliver what our customers seek in terms of product, quality and price point. Our current portfolio is derived from our own-developed, in-house ranges, including those that we produce 'under licence', and those of third-party manufacturers, which we distribute in our territories on an exclusive basis. Our close partnerships and ongoing dialogue with our suppliers and customers give us invaluable feedback that enables us to develop and adjust our plans to optimise our sales penetration. This informed and responsive approach to understanding and working within our market gives us a strong platform across which we are able to promote and sell a broad portfolio of relevant, in-demand products. Our blend of long-term customers and suppliers and more recent entrants to the retail market, sees our business well balanced and diversified in both its customers and suppliers, thereby marginalising any potential concentration risk.
During this period, our evergreen branded, pre-school Peppa Pig range, now in its 15(th) year, has continued to grow well, both domestically and in our international markets. This brand is a striking example of how our business model is applied to understand what the market and consumer wants from a product range and to develop it over many years, keeping it fresh, innovative, fun and educational. To view some of these exciting developments within this range, follow this link: https://www.youtube.com/watch?v=VR5AViNTvno.
Old favourites like Fireman Sam and Ben and Holly (https://youtu.be/C2c3PlMbgMU), which are now well-established ranges, have also performed with resilience in the market. The Stretch range remains popular and in demand and is trading well in both our home market and internationally. We are also currently focused on capturing new licence opportunities for this range, which we anticipate will lead to exciting extensions to this enduring brand.
Our strong and diverse, core portfolio has been complemented, over the last few years, by trend lines. Positioned in the market at the right price point, this category of toy has been a growing trend since its introduction to the market a couple of years ago. We have successfully built our offering in this dynamic category and continue to add to it, with new novel and innovative products being sourced and added to our ranges regularly. Our brands in this category currently include Cra.Z.Slimy (https://www.youtube.com/watch?v=P43wXCEytPQ), Treasure X, Bubbleezz and Odditeez Ploppz (https://www.youtube.com/watch?v=OOVUnCiM3z0).
At the recent toy fairs, we once again successfully launched our next season's ranges and a great variety of new products and range extensions. Our product development team has also been working hard on several collaborations with overseas toy companies; these partnerships have played an important part in evolving our expanded, innovative product offering.
The Group will be introducing further new products and range extensions to its portfolio in the coming months, which will further enhance and strengthen the Group's product offering for the coming year. Examples of these are:
Ø Character's own-developed ranges:
Peppa Pig wooden playhouse, theatre stage playset and a vehicle, https://youtu.be/Z_csn8Mr5f0
Stretch figures https://youtu.be/juHkTpGXBNg
Ø Third-party ranges:
Hair Dooz https://www.youtube.com/watch?v=0hjycCPP5_Y
Pokémon - Classic, and movie related products - due for summer
launch http://www.thecharacter.com/detectivepikachuplush
OMG pets (Little Live Pets range)
Laser X Original Double Pack "30 https://www.youtube.com/watch?v=5LYlLCyzzyY
Ballerina Dreamer Dancing Ballerina https://youtu.be/H3BKk0wmSGg
"What's in a Box" which is a YouTube sensation.
To view our current portfolio, go to www.character-online.co.uk.
AWARDS
We were delighted to achieve two accolades at the annual Toy Industry Awards held in January, during the all important London Toy Fair. We were awarded the coveted "Supplier of the Year" Award in recognition of the excellent standard of service that we provide to our customers. In addition, Soft 'n Slo Squishies was announced the winner of the "Craze of the Year" category. Two further Character Options brands received recognition, with nominations in the pre-school category for Peppa Pig and in the craze category for Bubbleez.
OUR PEOPLE
Our experienced, knowledgable and long serving teams in our UK and Far Eastern operations are proactive and focused on the delivery of the best service possible to customers and the supply of high-quality and in demand/most sought-after children's toys.
On behalf of all stakeholders, the Board would like to thank our personnel at all levels thoughout the business for their hard work, dedication and loyalty, which continues to underpin and develop both our enduring high-level customer relationships and collaborations and the Group's overall performance.
GROUP TRADING
We are pleased to report an improved first half performance compared to the same time last year.
Revenue in the period being reported was GBP58.8m, against GBP50.5m in the comparable 2018 period (FY2018: GBP106.2m). Proxy contributed GBP6.2m of turnover in this period.
Our UK sales increased whilst the international sales, excluding USA, remained steady. Whilst USA sales continue to be challenging following the demise of Toys R Us, we are making good progress and should see an improvement in the second half.
A significant proportion of the Group's purchases are made in US dollars. The business 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 the financial period under review results in a charge of GBP0.3m. This compares to a charge of GBP3.85m shown in the corresponding period in 2018 and an additional profit of GBP0.14m reported in the year to 31 August 2018. These 'mark to market' adjustments are non-cash items, calculated by reference to unpredictable and sometimes volatile currency spot rates at the respective balance sheet dates. To highlight profitability on a normal basis, these adjustments are shown separately as significant items to demonstrate the "underlying" profit measures presented in this report.
Gross profit margin in the period improved to 36.8%, compared to 35.2% in the same 2018 period and 34.2% for the August 2018 financial year. Once again, the improvement in margin reflects the ongoing change in mix, with a greater percentage of revenue being derived from UK sales and a lesser amount from the lower margin FOB sales.
The Group is reporting a profit before tax for the period of GBP5.6m, (HY1 2018: GBP4.5m; FY 2018: GBP11.6m). Earnings before interest, tax, depreciation and amortisation (EBITDA) were GBP6.9m (HY1 2018: GBP 5.8m; FY 2018: GBP13.6m).
Adjusted basic earnings per share amounted to 20.98p (HY1 2018: 16.96p; FY2018:45.09p). Diluted earnings per share, on the same basis, were 20.67p (HY1 2018: 16.64p; FY 2018: 44.38p).
FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW
The Group's capital base remained solid with net assets at 28 February 2019 of GBP33.5m (HY1 2018: GBP24.7m; FY 2018: GBP31.8m).
Inventories at 28 February 2019 increased to GBP11.2m of which GBP3.4m relates to Proxy (HY1 2018: GBP8.0m; FY 2018: GBP10.9m).
During the period the Group generated cash from operations of GBP17.0m (HY1 2018: GBP9.0m; FY 2018: GBP14.0m) which was predominantly due to the decrease in trade and other receivables.
The Group has no long-term debt. Net interest charges on the use of working capital facilities during the period were GBP0.2m (HY1 2018: GBP0.05m; FY 2018: GBP0.05m). Most of the interest charge relates to Proxy. After making dividend payments and financing share buy-backs (see below) and the acquisition of Proxy, the Group had net cash of GBP19.8m (HY1 2018: GBP14.3m; FY 2018: GBP15.6m) at the end of the first-half period.
PROXY
Proxy's turnover in HY1 was GBP6.2m and covers the period from 17 October 2018 (the date of completion of the acquisition of the Group's 55% interest in Proxy). This delivered a contribution of GBP357,000 to the Group's operating profit. We have been working closely with our new team members at Proxy on a number of joint initiatives and they have embraced and are benefiting greatly from our collaborative culture and platform.
As we previously announced , whilst Proxy's sales have been adversely affected by the occurrence of one of its major customers (Top Toy) going into liquidation in January this year, this is believed to be a short-term set back as the Nordic markets formerly served by Top Toy are quickly absorbing this retail capacity and other existing and new Proxy customers are seizing the available, additional market share, much as occurred in the UK toy market following the demise of Toys R Us and, previously, Woolworths. Additional opportunities have also arisen for Proxy, given that its distribution footprint in the Nordic region matches that of Top Toy's former cross-border presence in the region. Proxy is also very well positioned to offer a "one-stop" distribution service in the Nordic region to former suppliers to Top Toy, as has been seen with Proxy's capture of the Nordic distribution rights for Little Live Pets and Laser X in succession to Top Toy.
As stated at the time of the acquisition of the Group's shareholding interest in Proxy, whilst Character is supporting some of Proxy's finance facilities, these are independent and not part of the Group's overall banking arrangements The disruption caused by the demise of Top Toy has increased Proxy's short-term working capital requirements. In this context, the discussions for the refinancing of Proxy's banking facilities with alternative banking sources have exposed an element of under-capitalisation of its business and, that this will be required to be addressed to ensure that Proxy can be viewed by the lending banks as an independent, stand-alone entity. An additional loan or guarantee will need to be made by the Group and/or other shareholders in Proxy before the replacement facilities can be agreed. Discussions are taking place currently with the management of Proxy (who retain the remaining 45% of the equity). Proxy's existing bankers require the position to be resolved by 31 August 2019 and the Board will keep shareholders updated with developments in this position in due course.
SHARE BUY-BACK PROGRAMME
In the period under review, the Company acquired a total of 178,010 ordinary shares in the Company at an aggregate cost of GBP0.94m (excluding dealing costs), with the average cost being GBP5.26 per ordinary share (HY1 2018: 338,700 ordinary shares at an aggregate cost of GBP1.36m and an average cost of GBP4.03 per ordinary share).
Since 28 February 2019, the Company has made further share buy backs totalling 27, 000 ordinary shares at an aggregate cost of GBP0.15m at an average cost of GBP5.41 per ordinary share. Under the authority granted at the 2019 Annual General Meeting, the Company has an unutilised authority to buy-back up to a further 3,134,983 ordinary shares.
It remains part of the Group's overall strategy to continue to repurchase the Company's own shares when appropriate under its current share buy-back programme.
TOTAL VOTING RIGHTS (TVR)
As at today's date. the Company's issued share capital consists of 23,687,798 Ordinary Shares. The Company holds 2,433,256 Ordinary Shares in treasury which do not carry voting rights and therefore the total number of voting rights in Character Group is 21,254,542. The figure of 21,254,542 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest, or change to their interest, in the Company under the FCA's Disclosure Guidance and Transparency Rules.
DIVID
The Directors remain committed to a progressive dividend policy. Given our ongoing progress, the Board is declaring an interim dividend of 13p per share, an increase of 18.1% on the interim dividend in 2018 (HY1 2018: 11.0p). This interim dividend, which is covered 1.6 times by the underlying earnings, will be paid on 26 July 2019 to shareholders on the Register as at the close of business on 12 July 2019. The shares will be marked ex-dividend on 11 July 2019.
OUTLOOK
Character has delivered a strong first half performance and the Directors remain optimistic about the progress the business will make over this calendar year and the important 2019/20 winter season.
At the various trade fairs and presentations around the world this year, we have once again received positive feedback on our 2019 listings from our customers and we are confident that the performance of our core ranges, together with new introductions, will result in further growth in demand for our portfolio in the calendar year ahead. Our highly experienced teams are dedicated to developing, marketing and distributing innovative and exciting toys that meet today's high expectations that both our customers and the consumer demand in terms of quality, value and price.
Generally, our market is rapidly changing from a standard toy market to a trend-led, fast-moving sector and we believe that we are in a great position, both in market share terms and in experience and agility, to exploit this changing environment. We have made excellent progress and we are actively taking up opportunities, both at home and internationally, to deliver further fresh and new products, that meet demands of the market and that further enhance our portfolio.
The political landscape is providing an unwelcome distraction for many businesses and the performance of the UK economy generally. The macroeconomic factors, including currency volatility and the potential implications of Brexit, will continue to influence market behaviour, however, the Board remains confident in its strategy and the Group's flexibility to adapt to change and will continue to strive to grow the business, while facing and addressing any challenges as and when they arise. Overall, trading remains encouraging and in line with management expectations and market consensus for the financial year and we look forward to updating on our progress later in the year.
8 May 2019
The Character Group plc
Consolidated Income Statement
six months ended 28 February 2019
Notes 6 months 6 months 12 months
ended ended ended
28 February 28 February 31 August
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------ -------------- ---------------
Revenue 58,841 50,493 106,229
Cost of sales (37,216) (32,698) (69,891)
----------------------------------------------- ------ -------------- --------------- -----------
Gross profit 21,625 17,795 36,338
Net operating expenses
Selling and distribution costs (6,055) (4,952) (7,355)
Administration expenses (10,028) (8,646) (17,874)
Other operating income 345 380 543
----------------------------------------------- ------ -------------- --------------- -----------
Operating profit 5,887 4,577 11,652
Discount charge on deferred consideration (49) - -
Finance income 27 7 45
Finance costs (263) (61) (91)
----------------------------------------------- ------ -------------- --------------- -----------
Profit before taxation 5,602 4,523 11,606
Taxation (1,168) (968) (2,108)
----------------------------------------------- ------ -------------- --------------- -----------
Profit after taxation before significant
items 4,434 3,555 9,498
Significant items
Movements in fair value of financial
instruments (309) (3,853) 141
Tax relating to fair value movements
of financial instruments 59 732 (27)
----------------------------------------------- ------ -------------- --------------- -----------
Profit for the period after significant
items 4,184 434 9,612
----------------------------------------------- ------ -------------- --------------- -----------
Attributable to:
----------------------------------------------- ------ -------------- --------------- -----------
Owners of the parent 4,197 434 9,612
Non- controlling interest (13) - -
----------------------------------------------- ------ -------------- --------------- -----------
Profit for the period 4,184 434 9,612
----------------------------------------------- ------ -------------- --------------- -----------
Earnings per share before significant
items (pence) 5
Basic earnings per share 20.98p 16.96p 45.09p
Diluted earnings per share 20.67p 16.64p 44.38p
Earnings per share after significant
items (pence) 5
Basic earnings per share 19.80p 2.07p 45.63p
Diluted earnings per share 19.51p 2.03p 44.91p
Dividend per share (pence) 4 12.00p 10.00p 21.00p
----------------------------------------------- ------ -------------- --------------- -----------
EBITDA
(earnings before interest, tax, depreciation
and amortisation) 6,851 1,953 13,578
----------------------------------------------- ------ -------------- --------------- -----------
The Character Group plc
Consolidated Statement of Comprehensive Income
six months ended 28 February 2019
6 months 6 months 12 months
ended ended ended
28 February 28 February 31 August
2019 2018 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------------------- ---- ------------- --------------- ------------
Profit for the period after tax 4,197 434 9,612
-------------------------------------------------------- ------------- --------------- ------------
Items that will not be reclassified subsequently
to profit and loss
Current tax credit relating to exercised
share options 3 - 6
Deferred tax relating to share options 4 (5) 25
-------------------------------------------------------- ------------- --------------- ------------
7 (5) 31
------------------------------------------------------- ------------- --------------- ------------
Items that may be reclassified subsequently
to profit and loss
Net exchange differences on translation
of foreign operations (20) (98) (247)
-------------------------------------------------------- ------------- --------------- ------------
Total comprehensive income for the period
attributable to the equity holders of the
parent 4,184 331 9,396
-------------------------------------------------------- ------------- --------------- ------------
The Character Group plc
Consolidated Balance Sheet
at 28 February 2019
28 February 28 February 31 August
2019 2018
(unaudited) (unaudited) 2018
GBP'000 GBP'000 (audited)
GBP'000
---- ------------- -------------
Non-current assets
Goodwill 3,132 - -
Intangible assets - product development 471 496 803
Investment property 1,682 1,747 1,715
Property, plant and equipment 3,322 3,151 3,130
Deferred tax assets 678 1,200 469
----------------------------------------------- ------------- ------------- -----------
9,285 6,594 6,117
---------------------------------------------- ------------- ------------- -----------
Current assets
Inventories 11,201 8,047 10,890
Trade and other receivables 12,733 12,015 25,555
Current income tax receivable 126 141 14
Derivative financial instruments 19 - 167
Cash and cash equivalents 23,502 14,269 34,630
----------------------------------------------- ------------- ------------- -----------
47,581 34,472 71,256
---------------------------------------------- ------------- ------------- -----------
Current liabilities
Short term borrowings (3,717) - (19,050)
Trade and other payables (15,866) (11,165) (24,666)
Deferred consideration (325) - -
Income tax payable (870) (605) (1,123)
Derivative financial instruments (930) (4,597) (770)
----------------------------------------------- ------------- ------------- -----------
(21,708) (16,367) (45,609)
---------------------------------------------- ------------- ------------- -----------
Net current assets 25,873 18,105 25,647
----------------------------------------------- ------------- ------------- -----------
Non - current liabilities
Deferred Consideration (1,659) - -
----------------------------------------- ---- ------------- ------------- -----------
Deferred tax - - (3)
----------------------------------------------- ------------- ------------- -----------
Net assets 33,499 24,699 31,761
----------------------------------------------- ------------- ------------- -----------
Equity
Called up share capital 1,186 1,194 1,195
Contingent issuable shares 714 - -
Shares held in treasury (2,091) (2,353) (2,242)
Capital redemption reserve 1,771 1,762 1,762
Share based payment reserve 3,088 2,945 2,990
Share premium account 16,491 16,084 16,258
Merger reserve 651 651 651
Translation reserve 816 863 898
Profit and loss account 11,037 3,553 10,249
----------------------------------------------- ------------- ------------- -----------
Attributable to equity holders of
the parent 33,663 24,699 31,761
Non-controlling interest (164) - -
----------------------------------------- ---- ------------- ------------- -----------
Total equity 33,499 24,699 31,761
----------------------------------------------- ------------- ------------- -----------
The Character Group plc
Consolidated Statement of Cash Flows
six months ended 28 February 2019
6 months 6 months 12 months
ended
28 February ended ended
2019
(unaudited) 28 February 31 August
2018
GBP'000 (unaudited) 2018
GBP'000 (audited)
GBP'000
------------- --------------
Cash flow from operating activities
Profit before taxation for the period 5,293 670 11,747
-------------------------------------------------- ------------- -------------- -------------
Adjustments for:
Depreciation of property, plant and equipment 233 192 398
Depreciation of investment property 33 33 65
Amortisation of intangible assets 1,007 1,004 1,463
Loss/(profit) on disposal of property, plant
and equipment 1 (9) (8)
Unwinding of discount on deferred consideration 49 - -
Interest expense 236 54 46
Financial instruments fair value adjustments 309 3,853 (141)
Share based payments 98 17 62
Decrease/(increase) in inventories 3,373 947 (1,896)
Decrease in trade and other receivables 20,957 13,802 262
(Decrease)/Increase in trade and other creditors (14,558) (11,535) 1,966
-------------------------------------------------- ------------- -------------- -------------
Cash generated from operations 17,031 9,028 13,964
-------------------------------------------------- ------------- -------------- -------------
Interest paid (236) (54) (46)
Income tax paid (1,280) (2,777) (3,219)
-------------------------------------------------- ------------- -------------- -------------
Net cash inflow from operating activities 15,515 6,197 10,699
-------------------------------------------------- ------------- -------------- -------------
Cash flows from investing activities
Purchase of subsidiary company (7,284) - -
Payments for intangible assets (675) (802) (1,568)
Payments for property, plant and equipment (286) (147) (326)
Proceeds from disposal of property, plant
and equipment 28 12 11
Net cash outflow from investing activities (8,217) (937) (1,883)
-------------------------------------------------- ------------- -------------- -------------
Cash flows from financing activities
Proceeds from issue of share capital 384 991 1,277
Purchase of own shares for cancellation (939) (1,367) (1,367)
Dividends paid (2,539) (2,101) (4,435)
-------------------------------------------------- ------------- -------------- -------------
Net cash used in financing activities (3,094) (2,477) (4,525)
-------------------------------------------------- ------------- -------------- -------------
Net increase in cash and cash equivalents 4,204 2,783 4,291
Cash, cash equivalents and borrowings at
the beginning of the period 15,580 11,536 11,536
Effects of exchange rate movements 1 (50) (247)
-------------------------------------------------- ------------- -------------- -------------
Cash, cash equivalents and borrowings at
the end of the period 19,785 14,269 15,580
-------------------------------------------------- ------------- -------------- -------------
Cash, cash equivalents and borrowings consist
of:
Cash, cash equivalents 23,502 14,269 34,630
Short term borrowings (3,717) - (19,050)
----------------------------------------------- -------- ------- ---------
Cash, cash equivalents and borrowings at
the end of the period 19,785 14,269 15,580
----------------------------------------------- -------- ------- ---------
The Character Group plc
Consolidated Statement of Changes in Equity
six months ended 28 February 2019
Called Contingent Capital Share Share Profit Non-
up issuable Treasury redemption premium Merger based Translation and controlling
share shares shares reserve account reserve payment reserve loss interest Total
capital GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 account GBP'000 GBP'000
GBP'000 GBP'000
-------- ----------- ---------- ----------- -------- --------- -------- ------------- -------- ------------
Balance as
at
1 September
2017 -
(unaudited) 1,211 - (2,743) 1,745 15,483 651 2,928 1,145 6,408 26,828 ------------------ -------- ----------- ---------- ----------- -------- --------- -------- ------------- -------- ------------ --------- Profit for the period - - - - - - - - 434 434 Exchange differences on translation of foreign operations - - - - - - - (282) 184 - (98) Deferred tax relating to share options - - - - - - - - (5) - (5) Total comprehensive income/(expense) for the period - - - - - - - (282) 613 - 331 ------------------ -------- ----------- ---------- ----------- -------- --------- -------- ------------- -------- ------------ --------- Transactions with owners Dividend paid - - - - - - - - (2,101) - (2,101) Share based payment - - - - - - 17 - - - 17 Shares issued - - 390 - 601 - - - - - 991 Shares cancelled (17) - - 17 - - - - (1,367) - (1,367) ------------------ -------- ----------- ---------- ----------- -------- --------- -------- ------------- -------- ------------ --------- Six months ended 28 February 2018 1,194 - (2,353) 1,762 16,084 651 2,945 863 3,553 - 24,699 ------------------ -------- ----------- ---------- ----------- -------- --------- -------- ------------- -------- ------------ --------- Balance as at 1 September 2017 (audited) 1,211 - (2,743) 1,745 15,483 651 2,928 1,145 6,408 - 26,828 ------------------------ ------ -------- ------ ------- ---- ------ ------ -------- -------- Profit for the year after tax - - - - - - - 9,612 - 9,612 Exchange differences on translation of foreign operations - - - - - - - (247) - - (247) Deferred tax credit relating to share options - - - - - - - - 25 - 25 Current tax credit relating to exercised share options - - - - - - - - 6 - 6 ------------------------ ------ -------- ------ ------- ---- ------ ------ -------- -------- Total comprehensive income/(expense) for the year - - - - - - - (247) 9,643 - 9,396 ------------------------ ------ -------- ------ ------- ---- ------ ------ -------- -------- Transactions with owners Share based payment - - - - - - 62 - - - 62 Dividends - - - - - - - - (4,435) - (4,435) Shares issued 1 - 501 - 775 - - - - - 1,277 Shares cancelled (17) - - 17 - - - - (1,367) - (1,367) ------------------------ ------ -------- ------ ------- ---- ------ ------ -------- -------- Year ended 31 August 2018 1,195 - (2,242) 1,762 16,258 651 2,990 898 10,249 - 31,761 ------------------------ ------ -------- ------ ------- ---- ------ ------ -------- -------- Balance as at 1 September 2018 (unaudited) 1,195 - (2,242) 1,762 16,258 651 2,990 898 10,249 - 31,761 ------------------------ ------ ---- -------- ------ ------- ---- ------ ------- -------- -------- -------- Profit/(loss) for the period - - - - - - - - 4,197 (13) 4,184 Exchange differences on translation of foreign operations - - - - - - - (82) 62 4 (16) Deferred tax relating to share options - - - - - - - - 4 - 4 Current tax relating to exercised share options - - - - - - - - 3 - 3 ------------------------ ------ ---- -------- ------ ------- ---- ------ ------- -------- -------- -------- Total comprehensive income/(expense) for the period - - - - - - - (82) 4,266 (9) 4,175 ------------------------ ------ ---- -------- ------ ------- ---- ------ ------- -------- -------- -------- Transactions with owners Non- controlling interest on acquisition of subsidiary - - - - - - - - - (155) (155) Dividend paid - - - - - - - - (2,539) - (2,539) Share based payment - - - - - - 98 - - - 98 Shares issued - - 151 - 233 - - - - - 384 Contingent issuable shares - 714 - - - - - - - - 714 Shares cancelled (9) - - 9 - - - - (939) - (939) ------------------------ ------ ---- -------- ------ ------- ---- ------ ------- -------- -------- -------- Six months ended 28 February 2019 1,186 714 (2,091) 1,771 16,491 651 3,088 816 11,037 (164) 33,499 ------------------------ ------ ---- -------- ------ ------- ---- ------ ------- -------- -------- --------
The Character Group plc
Notes to the Financial Statements
six months ended 28 February 2019
1. Basis of Preparation
The financial information set out in this Half Yearly Financial Report
has been prepared under International Financial Reporting Standards (IFRS)
as adopted by the European Union and in accordance with the accounting
policies which will be adopted in presenting the Group's Annual Report
and Financial Statements for the year ending 31 August 2019. These are
consistent with the accounting policies used in the financial statements
for the year ended 31 August 2018 as described in those annual financial
statements.
As permitted, this Half Yearly Financial Report has been prepared in accordance
with the AIM rules and not in accordance with IAS 34 'Interim Financial
Reporting'.
The consolidated financial statements are prepared under the historical
cost convention, as modified by the revaluation of certain financial instruments
and share based payments at fair value.
These Half Yearly Financial Statements and the financial information for
the six months ended 28 February 2018 do not constitute full statutory
accounts within the meaning of section 434 of the Companies Act 2006 and
are unaudited. These unaudited Half Yearly Financial statements were approved
by the Board of Directors on 8 May 2019.
The information for the year ended 31 August 2018 is based on the consolidated
financial statements for that year on which the Group's auditor's report
was unqualified and did not contain a statement under section 498 (2) or
(3) of the Companies Act 2006.
2. Acquisition
On 17 October 2018, the Group agreed to acquire 55% of the equity shareholding
in OVG-PROXY A/S, a Danish toy distributor based in Copenhagen. The purchase
price comprises an initial cash consideration of DKK2.5 million, with further
"earn-out" consideration of up to DKK25 million depending on performance,
in each of the years ending 31 December 2018, 2019 and 2020. The first
part of any first year earn-out will be satisfied by allotment of ordinary
shares of 5p each in the share capital of The Character Group Plc, subject
to a cap of 150,000 ordinary shares.
The cash outflow under purchase of a subsidiary of GBP7,284,000 on the
face of the Consolidated Statement of Cash Flows in the six months to 28
February 2019 relates to the following: GBP'000
Initial consideration 294
Invoice discounting 4,694
Bank borrowings 2,296
------------------------------------------ --------
Cash consideration excluding acquisition
costs 7,284
------------------------------------------ --------
Fair value of 150,000 ordinary shares of
the Character Group plc 714
Discounted deferred consideration 1,934
------------------------------------------ --------
Total consideration 9,932
------------------------------------------ --------
The acquisition had the following effect on the Group's assets and liabilities: Acquisition fair value GBP'000
Fixed assets 173
Stock 3,683
Trade & other receivables 8,135
Trade & other payables (5,758)
Current & deferred tax 412
--------------------------- --------
Net Identifiable assets 6,645
--------------------------- --------
Goodwill 3,132
Non controlling Interest 155
--------------------------- --------
9,932
--------------------------- --------
The principal factor contributing to the goodwill relates to the management
team and their extensive knowledge and experience of toy distribution in
the Nordic countries. There are no other separately identifiable acquired
intangible assets.
3. Going concern
The Directors consider that the Group has adequate resources to continue
operating for the foreseeable future and therefore continue to adopt the
going concern basis in preparing the financial statements.
4. Dividends
6 months ended 6 months ended 12 months ended
28 February 28 February 31 August 2018
2019 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--------------- ---------------
On equity shares:
Final dividend paid for the year
ended 31 August 2018
* 12.00p (2017: 10.00p) per share 2,539 2,101 2,101
* Interim - - 2,334
------------------------------------------------- --------------- --------------- ----------------
2,539 2,101 4,435
------------------------------------------------- --------------- --------------- ----------------
5. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
during the period.
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
dilutive potential ordinary shares. The Group has two (2018: one) categories
of dilutive potential ordinary shares, being share options granted where
the exercise price is less than average price of the company's ordinary
shares during this period, and contingent issuable shares as deferred consideration
for acquisition of a subsidiary.
An adjusted earnings per share has also been calculated as, in the opinion
of the directors, this will allow shareholders to gain a clearer understanding
of the trading performance of the Group.
The calculations are based on the following:
six months six months ended 12 months ended
ended
28 February 28 February 31 August 2018
2019 2018
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------ ---------------------- ------------- ----------------- ----------------
Profit attributable to equity shareholders
of the parent 4,197 434 9,612
------------------------------------------------ ------------- ----------------- ----------------
Financial instruments fair value
adjustments net of tax 250 3,121 (114)
------------------------------------------------ ------------- ----------------- ----------------
Profit for adjusted earnings per
share 4,447 3,555 9,498
------------------------------------------------ ------------- ----------------- ----------------
Weighted average number of shares
In issue during the year - basic 21,199,172 20,964,023 21,065,941
Dilutive potential ordinary shares 314,863 403,410 337,283
------------------------------------------------ ------------- ----------------- ----------------
Weighted average number of ordinary
for diluted earnings per share 21,514,035 21,367,433 21,403,224
------------------------------------------------ ------------- ----------------- ----------------
Earnings per share
Basic earnings per share (pence) 19.80 2.07 45.63p
------------------------------------ ------ ----- -----------
Diluted earnings per share (pence) 19.51 2.03 44.91p
------------------------------------ ------ ----- -----------
Adjusted earnings per share
Basic earnings per share (pence) 20.98 16.96 45.09
------------------------------------ ------ ------ ------
Diluted earnings per share (pence) 20.67 16.64 44.38
------------------------------------ ------ ------ ------
6. Electronic Communications
The Half Yearly Financial Report for the six months ended 28 February
2019 will shortly be available for viewing and download on the Group's
website, www.thecharacter.com.
--- ------------------------------------------------------------------------
Independent Review Report to The Character Group plc
-------------------------------------------------------------------------------------
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the Half Yearly Financial Report for the six months ended
28 February 2019, which comprises the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated Balance
Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement
of Changes in Equity and related notes 1 to 5. We have read the other information
contained in the Half Yearly Financial Report which comprises the Board's
letter and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the Company in accordance with guidance contained
in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board. Our review work has been undertaken so that we might state
to the company those matters we are required to state to them in a review
report and for no other purposes. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Company,
for our work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The Half Yearly Financial Report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing
the Half Yearly Financial Report in accordance with the AIM rules of the
London Stock Exchange which requires that the accounting policies and presentation
applied to the financial information in the Half Yearly Financial Report
are consistent with those which will be adopted in the annual accounts
having regard to the accounting standards applicable for such accounts.
As disclosed in Note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this Half Yearly Financial
Report has been prepared in accordance with the AIM rules of the London
Stock Exchange.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the Half Yearly Financial Report based on
our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
Review conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the Half Yearly
Report for the six months ended 28 February 2019 is not prepared, in all
material respects, in accordance with the AIM Rules of the London Stock
Exchange.
MHA MacIntyre Hudson
Statutory Auditors and Chartered
Accountants
New Bridge Street House
30-34 New Bridge Street London, EC4V 6BJ 8 May 2019
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR UGUQPAUPBUPB
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