Character Group warns of 'challenging' H2 trading environment

Toy company Character Group warned on Friday that second-half trading would be "challenging" as a result of difficulties arising from both the ongoing Covid-19 pandemic and Brexit.

Character said the Christmas 2020 trading period was "buoyant" for the UK toy sector, with the market reportedly up 5% year-on-year, while the group's UK sales for the four months to 31 December were up around 25% year-on-year.

International sales in the period were also "significantly higher" than in the same period last year, with sales to the USA featuring particularly well, boosting overall group sales over 30% on average.

The AIM-listed group noted that despite lockdowns and logistical difficulties arising from container shortages, delays with shipping from Asia, congestion at UK ports and the fall-out from Brexit, underlying profitability for the six months ending 28 February 2021 was still expected to be "significantly higher" than for the same period last year.

However, Character also cautioned that the second half of the year would be "challenging" due to the continuance of said lockdowns, restrictions and the ongoing effect that logistical difficulties were having on freight rates from Asia.

As of 0905 GMT, Character shares were down 5.65% at 401.0p.