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Resilient H1 results under the circumstances. Cash is lower as they paid down some supplier liabilities but no effect on real tangible asset value. Dividend and good outlook maintained for H2.
I see companies like this as dealing with cyclicality in two ways. You have the general economic cycle to contend with but also, within that, the product cycle of the industry. Once in a while a company like Character are going to hit a hot product and have a bumper profit year of 10-15m. When that happens you'll double your money from these prices quite comfortably. The only question for me is whether that happens next year or in five year's time. The really attractive thing about Character in particular is that the balance sheet is so strong that there is almost zero threat of debt or dilution between now and then.
Cannot understand why still no chat despite massive Director Dealing today, presumably for a good reason.
Any thoughts on the RNS today? Forager capital disclosed ownership of 6.88% in CCT. I believe Forager was already an investor in the company so cant tell if they increased or decreased the holding. Would be interesting to know.
Impressive numbers considering all the logistics issues that needed overcoming. Going the right way and so steady. Well done all
Giraffe - I agree. Will be interesting to see how the global supply chain problems affect Character given sourcing from China etc. Toy retailers are expecting shortages and price rises prior to Christmas. Hopefully they’re working hard to mitigate the risks!
Am amazed there is absolutely no discussion on this company. Postman Pat is popular enough. Have held since March and it has always stayed in profit. Will be buying more. Always a demand for toys, I really like this share. Thoughts anyone? And I mean anyone?!
quite brilliant company
solid results
Excellent half year results - truly outstanding. increased sales, profits , loads of cash for buybacks and tripling of dividend.
Peppa Pig Licence extension
property sale
Well done Character for what has been a challenging year. This company flies well under the radar of most investors but have to say BOD are solid here.
Great news about potential contract extension with Hasbro (who bought out Entertainment One).
https://toyworldmag.co.uk/2020-12-10-characters-year-end-results-released/
Someone must have got wind of the good results just released - or assessed the general sentiment towards the toy market which seems to be positive at the moment.
I know this link is old but covers most of the reported 2nd half period and provided an inkling of what was to come when reported back in July.
https://toyworldmag.co.uk/toy-sales-up-16-during-first-six-months-of-2020/
Why the rise this week?
Keeping a close eye on this. P.e. is insane and balance sheet is very healthy. Going to email the company and see if they'll impart how badly inventory has been affected by corona. Seems like crazy value down at these levels.
Anyone who knows why the stock has plummeted? Is it due to CCT sourcing from Asia, i.e. corona virus concerns?
This morning's RNS looks very much like a thinly-disguised profits warning.
Peppa Pig didn't bring home the bacon over Christmas then?
I still think that they are missing the opportunity to produce a Peppa Pig luncheon meat slice.
And 8% dividend maintained. Only slightly below expectations, was £5.5 before all this so seems priced in.
Bought in on Friday after market overreaction but issue with LSE not showing all trades - although they do show on HL.
Summed up nicely by Bowman on iii: https://www.ii.co.uk/discussion/t/reason-for-cct-price-drop/1149940
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.
Thanks for really useful info and discussion. Will watch and wait....
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...
ok just read on 'the other side' about takeover of eto (which I hold woohoo), and possible impact of Peppa Pig, anybody want to discuss the possible impact here
not in here these days but always hold an interest. Fallen 20% today with no obvious reason, anybody know why ?
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...