Character Group warns on profit after challenging Christmas

Toymaker Character Group warned on profits on Friday after an "extremely challenging" 2019 Christmas trading period, with the total toy market in the UK contracting for the second successive year.

Character cautioned that the rough conditions would impact its results for the first half of the financial year, as sales of the group's core products were down year-on-year.

The AIM-listed group said it was entering 2020 with a "very strong" product portfolio and, although the first-half results were set to be below the prior year, Character anticipates that it will deliver one of its "strongest second-half performances to date".

Despite the expected strong finish to the year, the weakened Christmas performance means it now expects pre-tax profits for the year ending 31 August 2020 to be roughly £10m - lower than current consensus expectations.

"Our confidence for the second half has been boosted by the reactions from our customers to recent product previews and presentations," said Character.

"With further viewing opportunities and product launches planned for the London Toy Fair, which takes place next week at Olympia, we expect the momentum to continue."

At 0910 GMT, Character shares were down 18.53% to 309.60p.