Character Share Discussion Threads

[dan_the_epic] 24/7/2017 12:22

I'm in here. Cheap as chips valuation, a stack of cash and earnings forecasts that look too low from 2018 onwards, Panmure Gordon admit they are conservative as such.

Sure it's not 200p anymore but great dividend and think this hits 750p within 18 months, and even that probably only puts it on a rating closER to other global toy peers.

end game here I see a takeover. Superb low capital intensity market dynamics, great margins and return on capital, and a reputation and distribution moat.

Honestly, very little not to like. Product cycles smoothening all the time and balance sheet provides clear optionality IMO.

[tratante] 20/6/2017 10:46

September, judging by last year, don't hold your breath. Pretty boring in the meantime.

[h1a3] 08/6/2017 11:52

All quiet on CCT. When do we expect a trading update?

[h1a3] 11/5/2017 16:16

Another big buy today, £1M +. Another serious investor or a top up?

[fido] 08/5/2017 18:43

Todays RNS shows us that its Otus Capital that has been doing the buying and have gone above 5%

[davebowler] 08/5/2017 16:52

From I.C.
High quality global journalism requires investment. Please share this


Buy: Character Group (CCT)

International sales were down, but importantly they remained flat in the UK — the company’s largest market, writes Julia Faurschou.

Sample the FT’s top stories for a week
You select the topic, we deliver the news.

Unfavourable currency movements and weak US sales took their toll on profits at Character Group during the first half. Shares in the maker of Little Live Pets and Teletubbies toys fell in early trading, but soon rebounded on the back of a good second-half outlook, suggesting that Peppa Pig and other core brands could bring home the bacon.

The group makes most of its purchases in US dollars, so weak sterling reflected on the income statement. The underlying gross profit margin fell by 170 basis points. Lacklustre sales in the US further hurt the top line, and overall gross profit fell 13 per cent to £19.2m. Still, cash generation remained good, and the net cash pile increased to £18.6m from £14.5m a year ago.

Cost-cutting measures are on the way, including more cost-effective packaging and pricing negotiations with suppliers, aimed specifically at compensating for sterling’s fall.

Analysts at Panmure Gordon expect adjusted profit before tax of £15.4m in the year to August 2017, giving earnings per share of 49.9p, rising to £16.4m and 53.6p in full-year 2018 (from £15.1m and 47.7p in full-year 2016).

The cash-generative nature of the business should see it through the currency squeeze. The shares are trading at a fairly average 10 times forward earnings, which does not do justice to the company’s growth prospects.

[h1a3] 02/5/2017 15:44

Hi Fido,
The Share price recently has been rather subdued and when I saw these buys, I wondered if it is CCT buying them? It will be good to know and if it CCT then we should hear soon.

[fido] 02/5/2017 15:01

2 100k buys at the same time first thing totaling a £1 million investment.
That is serious money into Character.

[simso] 01/5/2017 18:48

I have added to my holding here post the results. One question I would appreciate understanding better, if any longer term holders know the answer. I understand that CCT does not actually own the IP of key brands in UK like Teletubbies and Peppa Pig..but has a license to operate them. Is there a risk of losing the Licence to one of its key toys...or has the business acquired the right for many years ahead? Thanks.

[stoxx67] 27/4/2017 14:35

agree mcartdon

[mcartdon] 27/4/2017 12:42

If you look back historically they were turning over 100 m many years ago 1999,
the cycle of growth and collapse is going nowhere.this is the growth i refer to.

the dividend is 2.7% inflation is 2% and rising rapidly.
a real return is in order of 5-7% with dividend and share price.
over the last two years shareholders have received no share growth a low return on dividend with respect to earnings.

the shares are 98m less 18 m cash
80 m in prudential bond made 5-6% last year returned to owner.
why take the risk for 2.7% nullified by share stagnation

[darlocst] 27/4/2017 12:37

Panmure Gordon put out a bullish note this morning post results, this snippet re H2 was reassuring:

(2) our
conversations with management that current trading has picked up in the UK
(recalling that the UK represents 76% of group sales) in the first two months of
H2FY17, slightly ahead of the growth in the UK Toy market; (3) our conversations with
management suggest that the initial favourable reaction of UK retailer customers to
CCT’s 2017 product range including major range extensions for most of the top 10
cornerstone brands, is now translating into a high single digit/low double-digit
increase in product listings for the second half of calendar 2017 with many of CCT’s
major UK retailer customers

[campbed] 27/4/2017 11:54

Mcartdon

The dividend is failing to cover inflation with no growth

They have just hiked the dividend by nearly 30% so how can you say no growth in connection with their dividend.

They don’t have £18m of free cash all the time – it’s seasonal and end of Feb will be a high point (low stocks post Christmas and debtors collected).

Acquisitions, even bolt-on ones, have risk.

They use debt factoring (working capital financing).

I disagree about borrowing to fund acquisitions when they have reasonably good growth prospects from their own range of products.

[dangersimpson2] 27/4/2017 11:54

I agree about the cash - either a more aggressive share buyback or a special dividend would start to make sense if the cash level increases much more.

They do have big swings in working capital due to seasonal effects so maintaining a strong balance sheet with net cash is a prudent way to manage the business but probably a bit too prudent at the moment.

Think you are wrong about the dividend though - since 2014 it has been increased rapidly in the last couple of years and many times the rate of inflation.

[mcartdon] 27/4/2017 11:21

Why do they hold 18m in cash? through a low interest rate period? it earnt very little.
why not borrow 18m and buy earnings in solid expansion of its range with a business enhancing merger.
Then use the income to pay off the debt over 4 years.

Better than buying directors free shares to maintain the same number in circulation over 4 years while pretending this is share price enhancing for shareholders.
The dividend is failing to cover inflation with no growth.
they had better think of something or loose investors and partners interest.

[campbed] 27/4/2017 11:07

I think today’s note from Allenby says it all

hxxp://www.allenbycapital.com/research/research-char_20_3344302872.pdf


Kept target share price of 700p and FY outlook per company’s guidance.

Obviously sales decline of 5.7% in H1 was a bit disappointing but guidance is for sales growth in H2 at improved margins. The directors’ confidence in this guidance is underpinned by 28.6% hike in H1 interim dividend declared.

So I’m prepared to regard last 6-12 months as a period of consolidation ahead of a longer period of improved performance and hold on to see that.

[rcturner2] 27/4/2017 10:06

Nobody got anything to say?

[gargleblaster] 26/4/2017 17:47

zedman - You are right the last two half-year reports were on 27th and 30th of April respectively. Bit of a fingers crossed situation since the company provide minimum on-going info!

[mcartdon] 26/4/2017 17:15

REMARKABLY UNEXCITING LAST TWO YEARS

[zedman_1] 26/4/2017 16:32

Half yearly results any day now.

[orange1] 19/4/2017 14:35

Character is also readying for the launch of its new Telly Tubbies Tiddlytubbies collection.

The Tiddlytubbies made their first appearance in the new Teletubbies in November 2015 and have since gone on to become fan favourites among the show’s pre-school audience.

The new range of plush and interactive toys is now set to land this July.

The first line in the collection of Giggling Tiddlytubbies plush toys are Umby Pumby and Mi-Mi. Squeeze their tummy gently and they release a tumult of giggles.

Press the back of the interactive Shuffle and Giggle Ping and they crawl along the floor.

Mark Hunt, marketing manager at Character Options, said: “We have received a high demand for the Tiddlytubbies from both retailers and consumers, following their introduction to the series.

“They are cute and highly collectable additions to the toy line and should drive incremental sales. We’ll be advertising through TV, print and digital platforms, as well as an extensive programme of blogging and unboxing videos to make sure everyone knows about this exciting new range of Tiddlytubbies toys.”

[coppertrader] 09/3/2017 17:24

If they were, the sold them today!

[h1a3] 09/3/2017 05:33

Just wondering if we may soon a RNS regarding recent share movements/transactions.
Is CCT buying back some shares?

[mcartdon] 16/2/2017 01:57

50% increase in overseas earnings to 32m in 2016. with the brexit effect this may be touching 50% with teletubbies and streach expanding, this has been the company focus growing and stabilising against currency changes.
it may well pay off with much increased t/o and interest in a takeover.