Character Regulatory News (CCT)

designers, developers and international distributors of toys, games and giftware

Issued on behalf of The Character Group plc

Date: Wednesday 18 January 2012 Immediate Release

Character Group -Trading Update

The Character Group plc ("Character" or the "Group"), which holds its Annual General Meeting today (18 January) at 11am, publishes the following Trading Update ahead of the Meeting:-

"As is well known, Christmas trading was generally very difficult for all trading companies and presented many challenges.

Acknowledging the poor economic outlook early, the Group took action in the first part of the financial year to ensure that stock levels were not excessive whilst costs were reduced.

We believe that the Group's key brands have held up well with no substantial casualties.  This is encouraging when compared to the market as a whole. Around 60% of Group sales derive from own-developed and branded products and this has helped Character to maintain its position as one of the UK's leading toy companies.

It is especially pleasing therefore to note that despite lower sales to date, when these are added to our internal forecasts for the remainder of the financial year ending 31 August 2012, the Group is still likely to produce a result in line with current market expectations.

Looking ahead, it is of course more difficult than normal to forecast in these conditions and added to the complexity is the possible disruption to trade yet to be felt by the events leading up to both the Diamond Jubilee and the Olympics.

Despite these potentially adverse factors, the Directors believe that our key brands will continue to do well through the year and that some new and exceptionally exciting new product introductions, which are to be launched to the trade at next week's International Toy Fair at Olympia (24-26 January), will add both store presence as well as substantial sales and may even create a new toy category suited to the technological age.

Whilst the results for the current financial year rely heavily on July and August sales, we are confident that our new introductions plus an increased retail presence giving us wider distribution should enable us to meet our forecasts for the year as a whole.

We look forward to keeping shareholders updated with developments over the coming year."