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(Alliance News) - Character Group PLC on Thursday said there was "no disguising" that the Covid-19 pandemic has battered the global toy market, a bleak outlook for the company whose interim profits sunk by more than half after a tough Christmas period.
Revenue in the six months to February 29, which included the Christmas trading spell, was 12% lower annually at GBP51.7 million from GBP58.8 million. Pretax profit sunk by 56% to GBP2.5 million from GBP5.6 million.
"There is no disguising the fact that the severity and duration of the Covid-19 pandemic has considerably affected the toy sector globally and will affect our second-half results for this financial year," the company said.
Character's dividend was chopped, by 85% to 2.0 pence per share from 13.0p.
The company endured a difficult Christmas period, a crucial trading spell for the toy market.
Character explained: "As anticipated at the time of making the 2019 preliminary results announcement in December last year, the combination of the over-hang of stock from the demise of Top Toy in Scandinavian markets, the continued decline in consumer spending in the UK toy market, the weakness of sterling and uncertainty over Brexit, all occurring in the lead-up to the all-important Christmas period last year, had an adverse impact on our sales in the first half."
Back in January, Character said the toy market in the UK slumped for the second year in-a-row, hurting both Christmas sales and, in turn, its half-year numbers.
Character warned at the time: "The 2019 Christmas trading period was extremely challenging with the total toy market in the UK contracting for the second successive year.
"Sales of our core products were down against the comparable period last year."
Among the standout performers during the first half, the company noted, were Peppa Pig and Pokemon.
"Whilst Character's international sales have held up well, and we are currently planning to move to a full resumption of our global operations in the coming weeks, we cannot hope to make up the sales that we lose during the period of lockdowns in our markets," Character warned.
"With a sizeable cash balance and substantial unutilised bank and finance facilities of at least GBP50.0 million, the group has a strong balance sheet, is financially robust, and poised to return to its normal pattern of trading as soon as conditions allow."
Shares in the company were 6.1% lower at 230.00p each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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