Character Regulatory News (CCT)

16 February 2011

The Character Group plc

('Company')

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

Transaction in Own Shares

Directors' Shareholdings

As part of the Company's stated objective to enhance shareholder value, the Company advises that today, 16 February 2011, it bought back for cancellation a further 500,000 ordinary shares of 5p each in the capital of the Company ("Ordinary Shares") in the market, at a price of 210 pence per share. This represents approximately 2.02 per cent. of the current issued share capital of the Company (excluding shares held in treasury).

For the purposes of the Financial Services Authority's Disclosure and Transparency Rules, the total number of Ordinary Shares in issue as at the date of this notice (taking into account the Ordinary Shares purchased for cancellation by the Company announced above and excluding Ordinary Shares held in treasury) is 24,231,331 ("Revised Issued Voting Share Capital").

The Company announces that all of the Ordinary Shares bought back for cancellation today by the Company were acquired from the Executive Directors, namely Richard King, Kiran Shah, Joseph Kissane and Jonathan Diver, or their related parties.

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-mentioned Directors in the buy-back programme to be fair and reasonable insofar as the Company's shareholders are concerned.

The interests of all of the Directors following these transactions are set out below:

Notes:

1. included in the interests of R. King are his interests in 1,635,428 Ordinary Shares held by Cedarberg Investments Limited, 320,000 Ordinary Shares held by his spouse, Mrs M.H. King and 1,036,750 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 5,830,000 Ordinary Shares and 333,250 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 and J.J. Diver is deemed to be interested in such Ordinary Shares by virtue of being within the class of beneficiaries defined by such trust.

Following the purchase of 500,000 Ordinary Shares announced today, the Company is seeking to purchase up to a further 386,750 Ordinary Shares in this stage of the programme to bring the total number of Ordinary Shares since the 2011 AGM on 19 January 2011 to 1 million Ordinary Shares, as announced yesterday. The purchase of any further shares will be made by the Company through the market.

The Company has a total unutilised capacity to buy back up to a further 5,984,750 Ordinary Shares under the authority granted at the Annual General Meeting on 19 January 2011. The Directors will continue to monitor the position and will authorise further purchases of the Company's Ordinary Shares up to this limit, if they consider that such action will further enhance shareholder value.

The Company holds 4,019,456 Ordinary Shares in treasury, representing approximately 16.59 per cent. of the Revised Issued Voting Share Capital, which do not carry voting rights.

The figure of 24,231,331 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.