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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| The Character Group Plc | CCT | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 311.00 | 08:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 311.00 | 311.00 | 311.00 | 311.00 | 311.00 |
| Industry Sector |
|---|
| MEDIA |
| Top Posts |
|---|
Posted at 19/7/2024 15:21 by brucie5 A bit of a sleepy board. Just picked this up for an income folio. If you're happy with the 6% + dividend the metrics on Stocko look good: over 97 with three positive value screens including two Dremans (low p/cf & PE.PE Ratio (ttm) 10.8 PEG Ratio (ttm) 0.24 EPS Growth (ttm) 42.1% Dividend Yield (ttm) 6.27% This was Paul Scott's last write up in May: He notes generous divis and strong balance sheet, which I like. But I also like the chart, which looks primed for recovery. Surprised there isn't more interest? -------------------- Character (LON:CCT) 276p (pre-market) £52m - H1 Results - Paul - GREEN Designers, developers and international distributor of toys, games and giftware I’ve followed this toys company for many years, and my preconception is that shares usually look cheap or very cheap, but it has a rather erratic track record, and disappoints with profit warnings every now and then. It’s been a generous dividend payer in the past, and is doing buybacks too. There might have been question marks over management remuneration too, I vaguely recall. H1 results are much improved on last year - Revenue flat at £57.6m Adj PBT (profit before tax) up 320% to £2.1m (from a low base last year) Adjs are only small, and actually reduce profit this H1 by £154k. Adj diluted EPS up huge % from almost nothing last year, to 8.7p this H1. H1 dividend held at 8.0p, almost all of earnings, and uncovered by earnings LY. Outlook - positive news here - "The Group has a strong portfolio of products, underpinned by a strong balance sheet, and has a net cash position with substantial unutilised working capital facilities in place. On the back of our first half-year's performance and these signs of the Group's robust health, we anticipate profit before tax and highlighted items in respect of the full year to 31 August 2024 will exceed current market expectations. The Board is comfortable that the Group is on course to meet its targets." Balance sheet - looks healthy to me. Inventories have reduced by £6m to £11.7m, with the benefit flowing half through to increased cash of £13.4m, and reduced trade creditors. Working capital looks very comfortable, with £25m net current assets. Put another way, the cash pile of £13.4m almost completely covers what they owe suppliers (£13.8m). There are no significant longer-term liabilities. So my verdict is that CCT is in rude financial health, meaning that there’s no solvency or dilution risk, and it has ample dividend-paying capacity, as it demonstrated last year with divis still paid despite not being covered by earnings. It’s not fashionable at the moment (where everyone seems to chase high ROCE), but I like the safety that a strong balance sheet provides investors with. Cashflow statement - all looks fine to me, no issues. Note that share options charge is very low at £55k in H1, and £204k in FY 8/2023, certainly not excessive. Broker update - thanks to Allenby for crunching the numbers this morning. It increases FY 8/2024 PBT by 10% to £6.6m. In EPS terms that is: OLD: 23.3p, NEW: 26.1p. CCH shares historically have tended to only attract a high single digit PER. Is that fair though? I think a PER of about 12x seems fair here, so that gives me a share price target of 313p. That’s a bit above the current price, so there’s likely to be some upside here. A 10% rise in forecast earnings usually flows straight through to a 10% rise in share price on the day, so I imagine (I haven’t looked yet, as it’s funt o guess!!) we might end today c.300p, which would certainly not be a stretched valuation, especially when you take into account the very strong balance sheet, and generous divis, plus it has authority to do substantial buybacks - which I approve of where a share is cheap on fundamentals, and is not a diversion to cover up excessive management share options (as we saw recently at Trainline for example). -------------------- |
Posted at 11/4/2024 12:58 by arthur_lame_stocks I've just taken a look at the most recent results and have decided these are really very good value and generate an awful lot of cash in even the poor years. As far as I can see this last year they generated around £8m of free cash flow by my preferred measure against a market cap of ~£50m. In better years they have generated far more than this. The dividend yield is nearly 7% and the balance sheet is very strong.They've played the interest rate cycle very shrewdly, borrowing when money is cheap and paying it back when it is not. The board seem to have listened to investor concerns about their remuneration and this year have taken a far more reasonable wage. All in all I reckon this is a great opportunity at this price. |
Posted at 19/3/2024 04:12 by h1a3 Is this board dead?I have been a very long term investor but CCT appears to be drifting no where. Any thoughts? |
Posted at 05/5/2021 14:29 by davebowler htTPs://masterinvest |
Posted at 28/1/2020 09:29 by 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” 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&# 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/franchise I’ll go into more detail later in the week. |
Posted at 12/9/2019 21:52 by orange1 Forager Capital based in Birmingham Alabama now have a 5.4% stake. This is how they operate and the return they are looking for:"We are fundamental value investors applying boots-on-the-ground research methods to the microcap equity universe. We gain an information-based competitive advantage through research intensive due diligence and personal connections with management teams in companies that are overlooked by the market and have virtually no analyst coverage. While most investors automatically avoid microcaps, we focus on the large subset of them with long histories, high returns on capital, and capable management teams. Our typical investment is in a business with potential sources of free cash flow growth that the market hasn’t discovered. We invest when our base case expectation is to double your money in three to five years and downside protection exists to shield us from mistakes." |
Posted at 14/9/2018 10:45 by campbed Most small cap fund managers are pretty good and the ones at Ruffer are. But they can be obliged to adhere to the investment house rules. A good example is Versarien VRS where one 20%+ small cap institutional holder sold out at under 20p/share last autumn which were bought by retail investors who have raised the price to 175p currently.Not saying CCT will go up 10 fold but it could reach 700p within 6 months imo. |
Posted at 06/8/2018 08:14 by mip55 CCT website...Investor relations....financi |
Posted at 15/2/2018 21:00 by orange1 Maybe an idea then to quit posting on this board and concentrate your efforts on the N4 board. You are an incredibly gifted and able investor with enormous intelligence and foresight. Why devote any attention to the "losers" on this board?Unless of course, you are so unsure of yourself and your own worth that you feel that you have to prop up you new investment with a bit of gratuitous ramping. |
Posted at 25/10/2017 22:37 by dan_the_epic Still expecting some multiple expansion as investors zone into this being trough earnings ahead of a product slate that is there best ever moving forward |
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