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(Alliance News) - Character Group PLC on Tuesday warned that the customary boost from Christmas trading has materialised later than expected this year, as UK consumers grapple with cost of living pressure, prompting it to look overseas for growth.
In addition, the Surrey, England-based toy, games and gifts maker said Non-Executive Chair Richard King will step down next month, after a 33-year stint with Character.
Character said trading conditions "remain tough", with consumer spending muted.
"Whilst we have adapted our product range to target lower price points to respond to consumer financial constraints, Christmas demand has been later than usual and is clearly very sensitive to discounting," the toy maker cautioned.
The Christmas period falls in the first half of its current financial year.
For the financial year that ended on August 31, Character on Tuesday said that revenue fell 31% to GBP122.6 million from GBP176.4 million. Pretax profit dropped 59% to GBP4.7 million from GBP11.4 million.
Character said its second half went better than the "disappointing" first half, however.
The company lifted its final dividend by 10% to 11.0 pence from 10.0p. Its total payout for the year was 12% higher at 19.0p from 17.0p.
Looking ahead, it said: "Whilst the UK and Irish domestic markets will always remain critical to Character, the board recognises that opportunities for significant sales and profit growth lie in further developing the group's international markets. We are focussing on this area of our business and we are pleased to report at this early stage that, following the recent previews and presentations of our 2024 ranges and new additions at the Global Toy Fair in Los Angeles to our retail and international distribution customers, our 2024 product offering has been very well received.
"Therefore, with International sales forecast to grow in the second half of the current financial year, this bodes well for the group's strategic focus in this area. In summary, Character Group continues to have a strong product offering, a robust balance sheet, with a net cash position cash and considerable unutilised working capital facilities in place."
The company expects sales and profit for financial 2024 to top what it achieved in the year just gone.
Characater said Chair King will not stand for re-election to the board at the company's annual general meeting on January 19, ending a stint of "nearly 33 years as a director and chairman of companies within the Character Group".
King will remain connected to the company in a new, non-board position of "honorary adviser".
Character named Independent Non-Executive Director Carmel Warren as its next non-executive chair. Warren joined Character's board in April 2021.
Character shares were down 1.8% to 280.00p each in London on Tuesday morning.
By Eric Cunha, Alliance News news editor
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