Character Share Discussion Threads

[dan_the_epic] 10/10/2017 16:04

I.e. in December they are going to come out and say they delivered EPS of 54p. If this stays where it is, then that is a PE of 8x or ex cash 6.6x.

That is bonkers. Either things are far worse than I can see or this is mentally cheap

[dan_the_epic] 10/10/2017 16:01

Screw it - back in at full size. Valuation looks mental and Peppa pig renewal has calmed my nerves

[rcturner2] 10/10/2017 15:27

I have also topped up.

[tratante] 10/10/2017 15:20

Thanks for your comments. I've taken a risk on a few more, might live to regret it, but if all's well it's a bargain.

[simso] 10/10/2017 14:47

I am not sure why Managememnt would announce anything. THey have confirmed that the FD leaving was no reflection on trade, and since confirmed trading to Aug 17 was in line. I suspect they dont know any more about TRU in addition to what has been reported.

The share is quite illiquid at times, and the fall in price could just be that. It could also be clumsy selling by the ex-FD...who had been buying earlier in the year.

[dan_the_epic] 10/10/2017 14:05

I am seriously confused as to what is going on here... Are management trying to check that absolutely everything is above board before making any announcements? (positive or negative)

[firip] 10/10/2017 10:03

some sort of statement from CCT would be usefull

[dan_the_epic] 10/10/2017 09:46

Yes the big question here now is "what really happened with the FD?". Did he really just disappear and stop turning up to work? Why? Or is there a poison arrow on its away?

Very confusing situation and very disappointing as felt like CCT was making headway. Market clearly thinks something is wrong and someone appears to be selling in bulk...

[runthejoules] 10/10/2017 09:41

No idea Tratante. Peppa Pig & Pokemon. Tous R Us not bust. If I knew what was wrong, or that nothing was, I might pick up more. For now I'm holding on and overweight.

[simso] 10/10/2017 09:40

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.

[tratante] 10/10/2017 08:55

Anyone any suggestions as to what's driving this fall?

[orange1] 09/10/2017 08:35

Read the full story here:

[mip55] 09/10/2017 08:02

Peppa Pig's master toy licensee Character Options has also renewed its partnership, with surging sales set to be supported by a heavyweight marketing campaign for the range. The licensee expects to see this success continue into 2018 and beyond.

[mickharkins1] 08/10/2017 09:03

My stop also hit...disappointing as looks too cheap!

[mcartdon] 06/10/2017 21:11

just settling down after the report no news no buybacks yet so 2m wait . patience

[dan_the_epic] 06/10/2017 19:05

Straight through my stop - pretty concerning on no news... FD gone, no Peppa Pig renewal yet, and a seemingly small Toys R Us news was unclearly laid out...

That's the negative peer through these last few weeks. But there are way more positives than these three and they really should outweigh these three by some margin. Just looks like the market has cold feet with no real news for 2 months

Really bizarre - either the market knows something I don't or is there news out there somewhere today?

[thorpematt] 27/9/2017 18:34

Good points raised there folks.

Interestingly some commentators refer to the rise in online Giants such as Amazon as a big drain on toy retailers with stores (such as Toys R us).

A quick search using a proxy server to fool Amazon's algorythms a tad, and you'll see that Carachter's tellytubby comes straight to the fore should you wish to search for and wish to buy one online, whilst living in the USA.

In other words any evolution of the market away from traditional retailers should not be an issue for CCT - since it exploits a variety of routes already. Furthermore one of the challenges for Toys R Us is to ensure that it continues to compete with regard to the diversity of its range and therefore it would remain wise to respect and look after the suppliers who can aid them to do so.

A temporary blip for CCT = opportunity to pick up stock IMO.

[carcosa] 27/9/2017 08:18

Hi simso,

I largely agree with your statement with respect to near term business for CCT. The demand will not go away and alternate means of supplying that demand will emerge; probably much more related to direct internet sales; Amazon for example.

However, it has been said (and I do not know how true this is) that what happens to bricks and mortar retail stores in USA tends to be followed in Europe 2-3 years later. Time will tell. For certain I feel confident that CCT management are more than aware of their market place so perhaps come the next AGM this subject will be discussed.

[simso] 27/9/2017 08:08

Thanks Carcosa.
I understand that TRU in USA and Canada make up less than 3% of Cct total business, and that is the part which has gone into Chapter 11. Total TRU worldwide is 8% of CCT business. Cct total debtors are around 25m, so 3% of that might imply a write off of £750k, which would hardly be annoying but hardly the end of the world. It is also very possible that suppliers may refuse to supply TRU going forward unless they are paid what they are owed first, and in extremely fast terms for future supplies. I think TRU will work hard to get every supplier possible on board, as if they lose too many, even smaller ones, their range will have holes and be imbalanced. They appear to have the firepower with this new financing to really sort their supply base out.

If the problems are contained to US and Canada, then any impact on CCt may not be bad at all as outlined above. The danger is if the whole TRU worldwide becomes infected, and suppliers struggle to get Credit Insurance and will therefore not supply. This could cause short term disruption. The behaviour of credit insurers will be key, and these are people who usually take flight at the first hint of trouble, and are like umbrella salesmen who only want to work on hot sunny days.
Plenty of uncertainty, but I have a sizeable stake and remain a buyer on weakness here. Plenty of uncertainty still, but I think the share price is already discounting the worst outcome on TRU.

[carcosa] 27/9/2017 06:07

Can't let this go. There seems to be a misunderstanding as to what Chapter 11 and the the financing package recently raised actually means to a company like Character.

TRU are under no legal obligation to pay any creditors either partially or in full; that's Chapter 11. They are however entitled to full payment for product delivered after Chapter 11 proceedings have been granted. However payment and delivery terms could be changed. There is no obligation by TRU to pay for product already delivered prior to bankruptcy proceedings. The 50 largest claims range from $135m to $2.5m. I somewhat doubt Character Group make it anywhere near the top 50 claims.

It will be up to TRU to decide which toys they must have to bring in future business; with not being in the top 50 suppliers by value I think it is quite reasonable to expect TRU not to prioritise Character supplied products. It is up to Character as to whether they wish to continue doing business with TRU (presumably there is a force majeure clause in their supply contract to allow immediate termination) and take the risk going forward.

So in summary; the recent financing package for TRU has negligible impact on the outstanding invoices Character has with the company and going forward from here will most likely be on the basis of running down that relationship in an orderly manner.

[dan_the_epic] 26/9/2017 20:46

Thanks for pointing out mick, good news. Though fear this now has no catalysts for the next few months especially with the Peppa pig renewal decision seemingly looming :/

Patience is key

[mickharkins1] 26/9/2017 14:20

Toys"R"Us announced that it got $ 3.1 bio of financing yesterday, to support it during the financial restructuring and will also be used for store renovations.

Very positive and should remove any near term uncertainty over their trading and any receivables due to CCT.

I just bought a few on the news coupled with the fact I like the look of the chart.

[dan_the_epic] 20/9/2017 22:01

"Rest of today" was wrong!

Good to see a recovery. Only potential poison pill outside what we know over next few months is if the Peppa Pig licence renewal is not announced soon. Could start to play on fears given that this is a very important range. Expect them to get it, but have to admit that I'd have thought they would have renewed by now

[dan_the_epic] 20/9/2017 08:44

I wont be looking at the screen for the rest of today -

Davros - they have not lost a big customer. That is misleading

RTJ - misread your post :)