Character Regulatory News (CCT)

31 Jul 2008 11:10



Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: Thursday, 31 July 2008

The Character Group plc

("Character" or "The Group")

Trading Update

As the Group moves into the final and most important month of its financial year, it has become clear to the Directors that slow trading conditions are being experienced by retailers generally, with toy stores being reported by the British Shops and Stores Association to be one of the hardest hit, with sector sales for the quarter to June 2008 estimated to be down by 7.5%. 

Although the Directors continue to be pleased with the Group's offering for both this coming Christmas as well as for next year, it is likely that, as a consequence, there will be a slower intake by the Group's customers than originally anticipated, which may have a significant impact on August 2008 sales as well as during the run up to Christmas.

Character has a management team experienced in operating in such adverse trading conditions and the Directors are confident that the Group will be able to deal with the effects of this downturn, not least by ensuring that inventory exposure is reduced in line with more conservative expectations for the lead up to Christmas. Whilst this may limit opportunities if the economic conditions improve over the next six  months, it is believed that preserving positive cash-flow and a strong balance sheet are prudent policies for the Group to follow at this time.

The Group continues to be cash generative and has cash at bank and substantial un-drawn banking and invoice discounting facilities available to it.

The Directors will continue to keep shareholders updated as appropriate.