Character Regulatory News (CCT)

Date: Tuesday, 18 May 2010

The Character Group plc

('Company' or 'Group')

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

Transaction in Own Shares

As part of the Group's stated objective to enhance shareholder value, the Company advises that it yesterday bought back for cancellation 390,000 ordinary shares of the Company in the market, through Charles Stanley Securities, at a price of 137 pence per share. This represents approximately 1.32 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 shares held in treasury) is 29,131,654 ("Revised Issued Voting Share Capital").

Included within yesterday's buy back was a total of 275,000 ordinary shares sold by Richard King, Executive Chairman, through the market at a price of 137 pence per share. This represents approximately 0.93 per cent. of the current issued share capital of the Company. The table below details the number of shares Mr. King has sold and the resulting beneficial holdings of all of the Directors following yesterday's transactions.

The interests of all of the Directors in the issued shares of the Company following these transactions is 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, 320,000 ordinary shares held by his spouse, Mrs M.H. King, and 1,186,750 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 6,545,000 ordinary shares and 608,250 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.

The sale of shares by Mr King is considered to be a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies.The Directors of the Company other than Mr. King (i.e. those who are independent of this transaction for the purposes of the AIM Rules), having consulted with Charles Stanley Securities (the Company's Nominated Adviser), consider this purchase of shares from Richard King to be fair and reasonable insofar as the Company's shareholders are concerned.

The Company holds 4,019,456 ordinary shares in treasury, representing approximately 13.80 per cent. of the Revised Issued Voting Share Capital, which do not carry voting rights.

The figure of 29,131,654 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 any change to their interest, in the Company under the Disclosure and Transparency Rules.

The Company now has an unutilised capacity to buy back up to a further 3,042,673 ordinary shares in the Company (approximately 10.44 per cent. of the Revised Issued Voting Share Capital) under the authority granted at the AGM on 20 January 2010.