Character Share Discussion Threads

[fido] 05/12/2017 08:08

"Our international sales have been adversely affected by a combination of several factors; not least of these was that one of the world's largest toy retailers entered into Chapter 11 bankruptcy protection in the US and Canada in September 2017. As widely reported this has had a subsequent knock-on effect in every market where it trades, and has especially affected our International customers who have also taken a more cautious approach and not placed repeat orders. Furthermore, we have recently learned that the UK arm of this major customer is also likely to undergo a restructure"

"Whilst overall the Group's performance for the half year ending 28 February 2018 will reflect a temporary 'slowdown' when compared to 2017"

"In summary, despite the anticipated short-term weakness which will impact the first half of the current year"

[runthejoules] 05/12/2017 07:39

Results look good to me considering, good forward prospects, underlying EPS, cash & dividend up. Shows how resilient it is as a dividend rather than a growth stock even with headwinds I think. What do you think Dan?

[fido] 04/12/2017 16:56

CCT have already issued a profit warning about their next set of results which when released will probably see another sharp fall in the share price.
CCT are pinning their hopes on good sales of new products, but with retailer confidence in the toy sector low and orders being scaled back, the odds are that CCT`s hopes may be dashed and a further profits warning may be forthcoming.

[dan_the_epic] 04/12/2017 15:14

Hmm.. might cut ahead of the update as not sure they are going to be overly bullish so risk to the downside.... Frustrating as none of this is really CCTs fault

[fido] 04/12/2017 10:59

Toys R Us is not so much an issue about the percentage of sales but the effect a flagship player in trouble has on the whole market. This ripple effect and drop in toy retailer confidence was highlighted by CCT some time ago but ignored by most.
Once the market leaders flag up problems, the whole sector takes cover and this is something that is certainly NOT priced into CCT`s share price

[carcosa] 04/12/2017 07:49

"...US retailer Toys R Us is looking to close a third of its UK stores.... Experts said November had been a disastrous month for the toy industry, with sales down 10% and profit margins under pressure from excessive discounting...."

[dan_the_epic] 03/12/2017 21:47

That's fair comment RTJ. Doesn't inspire me with confidence going into the update this week though :/. Might be some weakness unless they release tomorrow in an upbeat tone

[runthejoules] 03/12/2017 20:49

'Specialist restructuring firm Alvarez and Marsal is understood to be drafting a company voluntary arrangement (CVA) on its behalf.

It hopes to strike a deal on Toys R Us's debts which will allow it to continue trading without being pursued for the money it owes'

Seems like this is a positive move, certainly better than nowt. Long term the collapse of high st / big warehouse retail shouldn't effect one toymaker more than another?

[dan_the_epic] 01/12/2017 21:59

Bit of a kick in the teeth but thankfully not too much of sales

[dan_the_epic] 30/11/2017 19:28

All this and the share price said, would be lying if I said I felt confident going into next week!

[fido] 13/11/2017 17:35

h1a3,
The downside to CCT`s failure to expand the International side of the business is that if pigeonholed in the UK they are much less of a threat to the majors and therefore a bid is far less likely.

[h1a3] 13/11/2017 16:59

I hope the Hasbro rumours about buying Mattel are wrong and they are really looking at CCT. Ah well, just some wishful thinking on a cold Monday evening.

[h1a3] 13/11/2017 16:59

I hope the Hasbro rumours about buying Mattel are wrong and they are really looking at CCT. Ah well, just some wishful thinking on a cold Monday evening.

[dan_the_epic] 09/11/2017 23:21

Very smart idea

[dan_the_epic] 08/11/2017 12:12

I'd suggest giving them a call so you can feel them out. I think the kitchen sink was full thrown here.

Character Group PLC "2 in the Dream Toys Dozen for Character"

That has been announced as an RNS. Very surprised the market has not cottoned on yet as looking back through implied q4s would suggest that being mentioned on the association's list provides a good bump to sales

[rcturner2] 08/11/2017 11:16

I must admit I sold out after the profit warning. I don't think the full story is out there yet. To me it would seem that there are bigger problems than just TRU.

[simso] 08/11/2017 11:04

The more I reflect on this, the more I wonder if the latest Update and Broker Notes are not just "Highly Prudent" as Panmure says, but are actually a complete Kitchen Sink / worst possible case scenario job.
After the Profit Warning, the Panmure forecast sales forecast was reduced for 2018 by 17% to £108m. The total TRU business worldwide is only 8% of the total sales, and even if we lost the whole lot (and surely that will NOT happen), it is less than half of the total downgrade. Given that UK makes up 75% of the total and performance there is fine, the whole scale of this downgrade doesnt feel right, whichever way you look at it.
A conspiracy theorist might argue they have kitchen sinked to the forecasts so that they can buy the shares back aggressively and cheaply. My own theory is more that the FD had lost the plot, and some work was subsequently required in order to prepare proper robust budgets. TRU came along and created further uncertainly, and they felt the safest option was to kitchen sink the forecasts with a worst case view.

[dan_the_epic] 08/11/2017 10:13

Looking back, the last time they had two toys on that industry list was in 2014, when they have a great Xmas as the share price very clearly conveyed....!

[dan_the_epic] 08/11/2017 09:33

Character doing well yet again in the top 12 toys list for Xmas compiled by the Toy Retailers Association. Hasbro tops with 3 toys on there but Character in second with 2 toys with the following. Only had one product on there last year. But two is very very good versus history of what they have achieved.

Laser-X - £49.99 rrp
The original Stretch Armstrong - £21.99

[simso] 03/11/2017 15:03

Sorry Dan, you are right. I remain a holder here, think the company will keep buying shares and this will keep a floor under the price. I think the Broker Downgrade was very prudent for two reasons. Firstly the level of sales downgrade was bigger than the whole TRU business, and think its a case of "uncertainty = safest to put in a lowball number untill things become clearer. Also, EPS will keeping egding up every time some more shares are bought back.

[dan_the_epic] 03/11/2017 14:24

This place is deserted. It's becoming like a monologue! Added some to my Norcros earlier fwiw.

I am increasingly confident this is a useful share price and a very good dividend here at the moment. I recommend you call the company if you doubt that.

[dan_the_epic] 27/10/2017 18:41

£200k shares bought back at 405p announced late yday

Just to think, if is really I the best product slate heading into the back half of 2018, then I'd expect a record sales result, much to the contrary of the downward revised broker forecasts. That would suggest substantial room for upgrades from here on. What would that equal? Well we're staring at about 53p of EPS for the year just gone, maybe down to 40p for the current year, but then possibly up towards 60p-70p for financial year 2019 given the operational gearing?

If that is true, and taking the 60p low end then the PE here is high 6s ish, and into the 5s if you ex our cash.

[dan_the_epic] 26/10/2017 07:20

ToyNews reporting that Character's recently released Oonies range is boasting impressive sales