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 Shares Traded Last Trade
  0.00 0.0% 470.00 3,354 08:00:00
Bid Price Offer Price High Price Low Price Open Price
460.00 480.00 470.00 470.00 470.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 105.32 5.02 18.12 25.9 100
Last Trade Time Trade Type Trade Size Trade Price Currency
12:39:56 O 238 460.25 GBX

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Trade Time Trade Price Trade Size Trade Value Trade Type
2021-04-14 15:19:07476.404191,996.12O
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Character Daily Update: Character Group Plc is listed in the Media sector of the London Stock Exchange with ticker CCT. The last closing price for Character was 470p.
Character Group Plc has a 4 week average price of 450p and a 12 week average price of 405p.
The 1 year high share price is 478.50p while the 1 year low share price is currently 227.50p.
There are currently 21,376,245 shares in issue and the average daily traded volume is 7,299 shares. The market capitalisation of Character Group Plc is £100,468,351.50.
thorpematt: A comparison of outlooks from the results statement for the last 2 years is interesting:- OUTLOOK 2019 dec The challenging trading in prospect for Christmas 2019 will affect the first half of our current financial year. By contrast, the prospects for the second half look positive. OUTLOOK 2020 Dec. "Trading in the lead up to Christmas 2020, despite the second UK lockdown, has been significantly ahead of the previous year's sales. Sales in Q1 are up by more than 30% over the same period last year and the prospects for the current financial year are looking extremely positive." "We expect FY 2021 to be the beneficiary of the deferral of the strong trading that we originally anticipated. Whilst we will continue to monitor the position, it is apparent that the Group is ahead of management expectations for the first half to February 2021 and market expectations for the financial year as a whole." -------------- In mid January of 2020 the AGM report gave rise to a profit warning and kicked a pre-covid decline into play for the share price. I expect another TS at the AGM date in January 2021 to be more upbeat. ---------- Historically CCTs shareholder value is less top line growth and more about shrinking shares in issue and rising dividend. The cash pile is more than healthy at present and I suspect a return to generous divis is likely. Looking at valuation, its hard to argue that an EV of circa £75m versus potential profits before tax of £11m and more, does not reprresent value. CCTs earnings have been choppy of late but the discount here still seems large given the positive trading statements of late.
thorpematt: Looks interesting. Profit for this period is good news I think. FOR REFERENCE TO FIRST HALF:- Half-year ended 29 February 2020 Revenue £51.7m Operating profit* £2.7m Pre-tax profit* £2.5m Underlying basic earnings per share* 9.60p Underlying diluted earnings per share* 9.58p Dividend per share 2.0p EBITDA £4.1m
thorpematt: Trading Update The Board of The Character Group plc (AIM: CCT) (the "Board") provides the following update to shareholders on the Group's trading ahead of the publication of the Company's results for the year ended 31 August 2020. The outcome for the second half of the 2020 financial year has, as expected, been considerably affected by the UK lockdown. Notwithstanding this, we have worked in close collaboration with our customers and distributors to maintain trading at satisfactory levels throughout the period. As predicted at the time of the release of our interim results in May 2020, the second half of the financial year ended 31 August 2020 will produce a profit; the Board now expects this to be at least equivalent to that of the first half. The agile working practices that the Group has developed over recent years have served it very well during the lockdowns and periods of changing government restrictions. We have also noted this week the updated guidance from the Prime Minister and we shall take appropriate steps as and when required. Demand for the Group's exciting and innovative products has remained resilient throughout the year, and the Board is confident that steady progress will continue to be made through to Christmas 2020 and into 2021. As always at this time of year, development of the Group's ranges and products for the Christmas season 2021 is well advanced and early feedback from customers to our previews and presentations have been extremely gratifying. We have developed the ability to read our markets and swiftly react to its changing environment and conditions. We are proud that this has enabled us to maintain good working relations with our customers, distributors, and suppliers. Indeed, the change in our approach to customer engagement during lockdown has led to even closer collaboration and a highly effective strengthening of the bond between our teams and our customers. Character continues to have a strong balance sheet with a sizeable cash balance and substantial unutilised working capital facilities. The Board believes that, with the current strength of Character's product catalogue matched by the commitment and motivation to succeed of our people at all levels, the Group's prospects for weathering the challenging environment remain good. The Company expects to release its preliminary results for the year ended 31 August 2020 in the first week of December 2020.
orange1: Bit of company restructuring going on at Proxy, the Scandinavian subsidiary today: Out with the existing director, in with Jeremiah Healy of Character, share transfer, increase in company share capital. Could be the reason why CCT's share price is inching upwards. Along with new products of course such as Ravel Tales: Meanwhile, McDonalds are promoting Scoob:
h1a3: There appears to be 2 large buys today. I wondering if CCT are buying? Any thoughts?
profdoc: Orange1, Last week I posted the following to my Newsletter subscribers (Deepvalueshares on ADVFN)- it's a bit long but you might pick up something usefu: Character Group’s AGM: On Friday I travelled to London to attend Character Group’s (LSE:CCT) AGM, and to discuss some key issues with directors after the formal meeting. They were very generous with their time. Jon Diver, Joint MD, was willing to chat for half an hour after the meeting; Kiran Shah, FD, and Michael Hyde, MD for the Far East, each spent quarter of an hour with me. I’m very grateful for their welcoming attitude to a lowly private investor and for being so keen on informing shareholders. Toy market decline Before the 11am meeting started Mr Market had pushed the share down 15%. This was in response to a 7am trading update which described the Christmas period as extremely challenging with the UK toy market contracting for the second successive year. A little more on that: in the meeting the directors said they estimated toy sales to be around 15% down over two years and a further 7-9% might occur. Worldwide, the toy market is in decline, but not as much as in the UK. They were asked why the volume of toys sold falls like this. Answer: there are trends in fashions, crazes come and go. In the past Character has ridden some good trends, e.g. slime. This year there was no craze to boost sales. Ups and downs are all part of the game. Optimism for the months ahead The trading update also stated, “We enter the 2020 calendar year with a very strong product portfolio and, although the first half results will be below last year, we anticipate that the Group will deliver one of our strongest second half performances to date.” The foundation for this belief is “the reactions from our customers to recent product previews and presentations”. In this context we need to remember that the company was founded by four people, and those four are still running it. They are used to talking with customers. Indeed, Jon Dover and other directors will be manning stands at the London Toy Fair this week. The enthusiasm with which Jon described the new products (those already announced and those which are still under wraps) is a sight to behold. He really loves this business and the way in which it is constantly renewed by exciting new toys (one is a giraffe which poos!). Putting some numbers on it The update said that despite the anticipated strong finish to the current year (yearend 31 August) Christmas was so poor that profit before tax is expected to be circa £10m (it was £11.1m in 2019). So around £8m after tax for 2020. This is substantially below the expectations of analysts, some of whom attended the meeting and made their displeasure felt (there was about 35 people in the room). At £8m of earnings, with the market capitalisation at £68m the shares stand on a forward PE of 8.5. Using the average earnings per share (35.1p) over ten years the cyclically adjusted price earnings ratio is 320p/35.1p = 9.1. The average for the UK market is 15-16. Dividend yield, assuming no diminution of the dividend in the current year is 26p/320p = 8.1. The company throws off so much cash and has such a strong balance sheet that the board have the task of deciding just how much to hand out by way of dividends or through share buy backs – this is true even in a year when profits fall to a “mere” £8m. In 2019 the decision was £5.3m for dividends and £1.27m for buybacks. I started my conversation with Kiran Shah by congratulating him on achieving rates of return on capital employed (averaged over a number of years) of 87% per year. To my great surprise he responded that he was not content with that number. He aims for more than 100%, as CCT has achieved in years gone by. They simply do not need capital to invest in factories, plant etc., because the heavy stuff is done by Chinese suppliers. Are you paid too much? An institutional investor asked the head of the remuneration committee, David Harris, if the director pay is too loosely linked to performance? After all, profit fell last year and yet board pay was £3.5m compared with £3.6m in 2018. Answer: In some years directors have forgone salary completely (indicating they share the pain in bad years). Also, base salary is not high relative to the market value of the individuals. They could take up posts in other companies in the sector at high pay (two directors are on a base salary of £245,916, but with bonuses total remuneration is £1m for Jon Diver and £0.8m for Kiran Shah). Diver is entitled to 4% of pre-tax profit, Shah to 2% and Joseph Kissane, another MD and co-founder 1% as bonuses. Half of bonuses are in cash and half in shares. David Harris concluded: “without them we would have a significantly inferior company”. I accept that for a £68m MCap company director remuneration around the million mark is high. But I also accept that these three, together with chairman Richard King, took an enormous risk with their careers in coming out of other toy companies in 1991 to set up Character Group, and so I have little difficulty accepting that part of their pay looks like that obtained by successful entrepreneurs. Is the board distorted? The institutional investor complained about the lack of independence of Board members, with five executives and three non-executives (worse one of the NEDs is a co-founder and another has been on the board beyond the corporate governance guideline limits). Response from Chairman Richard King: Yes, there is a limited amount of independence, but we are a small company which achieved good results, built a good team with a good reputation and relationships with suppliers. Then Richard attacked the policy adopted elsewhere of recruiting so-called independent directors as mere box-ticking. He said despite the Board having worked together for many years there is a diversity of views. When we have a (rare) contentious vote, we argue it through. Personally, I’d rather have a group of people who know the business inside out than a scattering of “independent” names on the board. The current board are all very knowledgeable about the company, its strategy and its people. There is a danger of group-think, or dominant-person stifling rational debate, but I’d rather face these risks than have most votes in non-active board members hands. How confident are you that new product lines will increase profits sufficiently to offset the Entertainment One losses over the next three years? Answer from Jon Diver: the loss of Peppa Pig was “a kick in the balls, for sure”. But there are reasons for hope, not least the wooden Peppa Pig toys license agreed with Hasbro (until December 2022). These toys are being launched at the London Toy Fair this week and have “great potential”. They meet the need for more environmentally friendly toys (than plastic ones). There are also international expansion possibilities. Later I ask Jon if Hasbro might, in 2023, opt for in-house wooden toy production. Apparently, Hasbro are wedded to plastic. And besides they won’t touch a line that offers less than $10m annual turnover. The company has ramped up development of own-brand toys where margins are fatter. Goo Jit Zu is in 30 countries now, with yet more international potential. I asked if I was correct in thinking that the Peppa Pig ranges due to cease in June 2021 account for around 20% to 30% of Character’s profits. Answer: Yes, around 25%. That gives a target for the directors to make up through new franchise deals and in-house toys. They seem bullish. Can you please update us on the losses at PROXY in Scandinavia? Answer: It’s been a challenging year. First, the largest Scandinavian toy retailer went bust. Then the second largest was offered the toy stock from the resultant shell. It bought the stock at a discount and proceeded to sell it through its stores at full price. This meant that it had little appetite to buy more stock from the likes of PROXY. However, the stock has now largely worked its way through and PROXY is anticipating more orders. There is a big push to get PROXY firing on all cylinders: CCT’s managers are over there, helping PROXY get its systems right; overheads are being worked on. But it’s still a “work in progress”. At least, CCT will not be paying more to the previous owner than the £1.44m already paid. But even at this level the meeting was told “with hindsight we paid too much”. Quite a lot of the inventories at PROXY have been cleared, much of it being sold in the UK. PROXY is still seen as a Brexit safeguard. Tom Spain, of Henry Spain, asked if the share buyback programme could be more aggressive (over the last few years the number of shares bought back roughly matched those given out as bonuses to staff)? Response: the directors would like to buy more but are limited by stock market rules. They can’t buy more than 50% of the average volume of the open market trades on the LSE. Open market trades average around 22,000 per day, so the limits is about 11,000 per day. Also, there are a lot of closed periods in a year when buybacks are prohibited. Richard King said that share options are given to all staff except the founder directors. They are very proud that few employees leave the company. Over 80% have been with the firm for at least 20 years. What is a sustainable level of dividends? Answer from Shah, FD: we follow a progressive dividend policy, but we are levelling off on that while profits are stagnant. But we will resume it when we’re back on track. What acquisitions would you consider now? Answer: At the moment, we need to concentrate on handling what we’ve got. How much forward visibility on sales do you have? Jon Diver: most customers order only 2-3 weeks ahead. I’ve bought some more shares. This time I’ve bought for my Warren Buffett-style portfolio. The company has some strong businesses/franchises greatly assisted by reputation and relationships. The managers are both competent and trustworthy. Financial stability is assured. Return on capital employed is astonishing, and cash flow and profits consistently large even in the recent slowdown. I’ll go into more detail later in the week.
rock star: Are the Directors fleecing shareholders? Looks like it with the performance bonuses in the AR released on Christmas Eve! Directors were paid a total of £3.5m. How do the6 get these outrageous performance bonuses when the share price has done nothing for 5 years. The board need to be held accountable imo. Sheer corporate greed.
tkamp: Some of you need to wake up and smell the coffee, with all due respect. Whether it's a closed period or not, the argument that CCT was buying shares at 5.80 in July and is no longer today 'even though the share price is so much lower' is completely invalid because CCT is going to lose Peppa Pig. That's a real event that lowers the value of the company. It's not some fictional thing that doesn't really matter right? The company is going to lose 30% of revenues and probably an even higher % of profits (due to operating leverage + likely above-average margin of Peppa products).CCT shares are no longer worth what they were worth a month ago. Not even nearly. Arguments like 'CCT will make up for it with new licenses or products' are just as invalid. What do you think CCT's business development employees were doing the last year? Just fiddling their thumbs? It's not because they lost Peppa that now all of a sudden the business development people are going to start to look for new brands/licenses/own IP. At best they may become more aggressive in their search, with aggressive being another word for desperate, which would result in them accepting less attractive terms to win new additions to their product portfolio. I owned CCT shares for >1.5 years and was lucky enough to have sold out before the Peppa announcement was made (pure luck, obviously I didn't know this Peppa thing was coming). When I sold out I was thinking I'd like to get back in if the share price would fall substantially. It fell substantially, but for very good reason. There is no way I'm going back in now. IMO shares would be justified to fall to about 300p.
tkamp: The big decline in GBP over the last weeks plays a role, and so does the increasingly negative sentiment around Brexit and the UK economy. Character is directly exposed to all these factors, so a worsening in their outlook is naturally going to affect CCT's share price. Don't forget that CCT imports products from China, paying suppliers in USD. Prolonger GBP depreciation will force CCT to raise prices it charges its own customers, which will likely lower volumes. And that a worsening UK economy is a bad development for CCT speaks for itself.
simso: I think it is that the Stock Market always hates uncertainty above all else, and two recent events have caused uncertainty at CCT. The first was the sudden departure of the FD. I am working on the assumption that this was for personal reasons, and read somewhere that he just went awol for almost two weeks, leaving the Board with no choice. The second is obviously the ToysRUs. I understand that the part of ToysRus which went into Chapter 11 in North America made up less than 3% of CCT Sales. Also I understand a huge Debtor Financing Facility for TRU is in place for them to continue...and am sure they are having to use this to pay all Creditors (like CCT) up to date and on faster terms in order to secure their ongoing supply. The bigger risk comes if the worldwide TRU becomes infected by the Chapter 11, and suppliers struggle to get Credit Insurance. Greater clarity on the TRU situation would help sentiment and the CCT share price This has all masked the fact that second half of Y/E Aug 17 was a PBT of somewhere around £6.5m...which is far better than any second half in CCT's history, and augers well for the year ahead.
Character share price data is direct from the London Stock Exchange
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