Character Regulatory News (CCT)

21 December 2012

The Character Group plc

("the Company")

Exercise of Options by Directors

and Transaction in own shares

The Company announces that on 20 December 2012 it received from certain Directors of the Company due notices of exercise in respect of options granted under the Company's Enterprise Management Incentive Scheme 2003 (the "EMI Scheme"). The notices were in respect of a total of 370,000 ordinary shares of 5p each in the Company ("Ordinary Shares").

These Ordinary Shares (the "Option Shares") were allotted by the Company today and rank pari passu with the existing issued Ordinary Shares. These Ordinary Shares were admitted today 21 December 2012 pursuant to an existing block listing granted to the Company by London Stock Exchange plc.

In continuance of the Company's stated objective to enhance shareholder value, the Company further advises that it bought back 320,000 Ordinary Shares today for cancellation in the market at a price of 125 pence per share. This represents approximately 1.39 per cent of the current issued share capital of the Company (taking into account the Option Shares but excluding shares held in treasury). These Ordinary Shares were acquired from certain of the Executive Directors (being J.J. Diver and J.J.P. Kissane) of the Company, as detailed below.

The participation by any Director or his related parties in the buy-back programme is deemed to be a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies (the "AIM Rules"). The Non-Executive Directors of the Company, Lord Birdwood and David Harris, who are independent of this deemed related party transaction for the purposes of the AIM Rules, having consulted with Charles Stanley Securities (the Company's Nominated Adviser), consider the participation of the above by certain of the Executive Directors in the buy-back programme to be fair and reasonable insofar as the Company's shareholders are concerned.

Following the allotment of the Option Shares and the buy-back of Ordinary Shares referred to above, the issued share capital of the Company is 22,643,578 Ordinary Shares, excluding Ordinary Shares held by the Company in treasury, (the "Revised Issued Voting Share Capital") and this number 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 Disclosure and Transparency Rules.

The table below sets out further details of these option exercises in respect each of the relevant Directors:

Both J.J. Diver and J.J.P. Kissane have today each sold 185,000 Ordinary Shares at a price of 125 pence per share.

Following the exercise of the above share options, and the share disposals, the interests of the Directors in the issued share capital of the Company are as follows:

Notes:

1. included in the interests of R. King are his interests in 1,635,428 Ordinary Shares held by Cedarberg Investments Limited and 771,750 Ordinary Shares held by the TOPS Pension Scheme;

2. included in the interests of K.P. Shah are the interests of Sarissa Holdings Limited in 4,830,000 Ordinary Shares and 618,250 Ordinary Shares of Mr Shah's personal pension scheme;

3. included in the interests of J.J. Diver are 401,867 Ordinary Shares held by Mr Diver's personal pension scheme;

4. Orbis Pension Trustees Limited is the trustee of the Company's Employee Share Ownership Trust. Each of R. King, K.P. Shah, J.J.P. Kissane, J.J. Diver and M.S.Hyde is deemed to be interested in such Ordinary Shares by virtue of being within the class of beneficiaries defined by such trust.

The Company has a total unutilised capacity to buy back up to a further 4,963,200 Ordinary Shares under the authority granted at the Annual General Meeting in January 2012.

The Company holds 4,019,456 Ordinary Shares in treasury, representing approximately 17.75 per cent of the Revised Issued Voting Share Capital, which do not carry voting rights.