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The Character Group (AIM: CCT) announces that, on Friday 13 September 2019, it bought back for cancellation 8,500 ordinary shares of 5p each in the capital of the Company ("Ordinary Shares") pursuant to the share buy-back programme (the "Programme")announced on 12 December 2018 .
As a result of the above, the Company's issued share capital consists of 23,646,501 Ordinary Shares. The Company holds 2,278,756 Ordinary Shares in treasury which do not carry voting rights and therefore the total number of voting rights in Character Group is 21,367,745. The figure of 21,367,745 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest, or change to their interest, in the Company under the FCA's Disclosure Guidance and Transparency Rules.
The Company has an unutilised capacity to buy back up to a further 3,093,686 Ordinary Shares under the authority granted at the Annual General Meeting on 18 January 2019.
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.
Investing involves risk. The information on this page should not be construed as a guarantee of investment performance.
Wow.. wtf.. Argh bad day for my portfolio.. this is it for me i'm out.. putting my money in PRD.L quick upside CEO owns 50% of company 5m MCAP 3 assets, news incoming extremely soon... huge upside potential.. CEO said DIV will be paid.. insanely low in point before news starts.. wont be long to get in. easily could be £1 by year end huge upside no downside at these levels.
Hi. threeputt. Bitter sweet day. I have stakes in both ETO and CCT. I must admit that Hasbro (a toy maker) bidding for ETO is not a scenario I had envisaged. The talk had always been of the likes of Netflix, etc, which would not have been less threatening for CCT. But we are where we are. Part of CCT's relatively lowly rating has always been the fact they don't own the original Peppa licence. Today's fall brings the company's valuation yet lower. I obviously don't know how this plays out and expect management to put out a statement on the implications. I believe that CCT have exclusivity on Peppa (in their markets) for at least another 2 years, so there is no immediate change. Today's fall also takes the valuation down to less than 3.5x EBITDA / 6x P/E historic. B/S is cash flow positive. All that said, Peppa is obviously a key line. My gut feel is that the market is over reacting (as so often), and I have top sliced a small portion of my ETO holding (it's trading above bid price on the expectation of a counter bid) and re-invested here. The dream scenario would obviously be a successful counter bid from the likes of a Netflix. One can dream. Alternatively, it may be expedient for Hasbro to come to a third-party manufacturing deal with CCT in their markets - where they have done a good job. let's see. Frustrating day...
Lovely trading statement this morning. Character has "witnessed a return to its previous growth pattern during the second half. With Character's UK domestic business delivering record sales, the trading results for the financial year ended 31 August 2018 will comfortably reach market expectations." More importantly "As a business, we feel confident of the prospects for the autumn/winter trading period, which includes the all-important Christmas season". Preliminary results are due out on the 29th November.
I say again that this is such an underrated little company. Exceptional ROCE. A fantastic track record of dividend growth. All achieved with an unlevered balance sheet. If we can get some consistent revenue / profit momentum to take us beyond the Toys R Us scare the shares should fly on a 12-18M view. At under 5.5x forecast EBITDA / 4% yield / 8x PE the current valuation is a steal by all objective standards...
threeputt. I hear you! Re. mgmt comp. The certainly feels high for a smaller co., particularly given recent trading. On the other hand I like the fact that Admin expenses were down by almost �1m in 17 vs. 16. C suite salaries aside they seem to run a tight ship.
Re. Toys r Us. Again I don't disagree with the concern. But I would argue that a large part of this is driven by the switch in retail habirs from traditional retail to offline, and not necessarily in the demand for traditional toys per se i.e. this is obviously bad news for stores but less so for the toy makers. They just have to find alternative routes to market via online. And they are doing so otherwise the revenues of CCT, let alone Mattel, etc, would have collapsed. That said, there is definitely a risk from a continued switch by kids to "digital" distractions away from more traditional toys. This is a risk but from what I have read it has been somewhat overstated and seems to be impacting the pre-teen age groups less, in which I believe CCT concentrate.
At the end of the day CCT is definitely at the riskier end of the spectrum. I just sincerely believe (that barring an unforeseen disaster!) the downside here is really very limited at the current valuation. And arguably the LT upside is high. I see it as one to tuck away, enjoy the divi and forget about for a year or two...
I do agree Threeputt that the first half profitability will suffer as a result of Toys R Us CVR in the USA and Canada and subsequent closures in the UK, however this has been well flagged by Character. The toy market will adapt and others either through bricks and mortar stores or online sales will be the beneficiary�s of Toys R Us over extending of physical stores.
With the launch to come of more of the companies best selling toys and the distribution rights for Pok�mon for the UK I remain confident in the longer term prospects for Character. Looks like the market now agrees as we are back to yesterday�s share price.