Character Group looks to new products to ride out slowdown

Character Group said it expected new products to help it ride out a slowdown in the first half of its current financial year.

Reporting annual results, the holder of the Peppa Pig toy franchise said trading was tough and it expected a temporary slowdown in the six months to the end of February.

Underlying pre-tax profit for the year to the end of August rose 6.9% to £13.4m as Character reduced costs. Revenue fell 4.7% to £115.3m due to falling international sales while UK sales were little changed.

Character said international sales were affected by several factors, including the bankruptcy of Toys R Us in the US and Canada in September. The bankruptcy filing of one of the world's biggest toy retailers deterred international customers from placing repeat orders, Character said.

The company, whose other characters include Teletubbies and Mashems, said major customers liked its products for Christmas 2018 and that it would rebuild and expand its business.

"Whilst overall the group's performance for the half year ending 28 February 2018 will reflect a temporary 'slowdown' when compared to 2017, the directors anticipate that the business will return to its previous growth pattern during the second half of the current financial year," Character said.

The shares, down from 540p in early September, fell 1.4% to 421.5p at 10:26 GMT.