Character Regulatory News (CCT)

14 September 2010

The Character Group plc

('Company')

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

Transaction in Own Shares

Directors' Shareholdings

The Character Group plc announced on 20 August 2010 that the Company was seeking authority from shareholders to buy back up to 6.6 million ordinary shares of 5p each in the capital of the Company ("Ordinary Shares") at a General Meeting of the Company on 9 September 2010, details of which were sent to shareholders with a notice of the General Meeting on 20 August 2010. It was announced on 9 September 2010 that the resolution was duly passed at the General Meeting and the authority granted.

The Company is currently seeking to purchase in the market up to 2,000,000 Ordinary Shares and announces that that it yesterday purchased 1,000,000 Ordinary Shares for cancellation at a price of 150p per Ordinary Share. This represents approximately 3.79 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) is 25,393,231 ("Revised Issued Voting Share Capital").

The Company announces that 1,000,000 Ordinary Shares purchased for cancellation were acquired, with the agreement of the Independent Directors, from Joseph Kissane and Jonathan Diver (each an Executive Director of the Company) and Sarissa Holdings Limited, a company in which Kiran Shah (also an Executive Director of the Company) has a direct beneficial interest.

The interests of all of the Directors following this transaction 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 1,186,750 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 5,830,000 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 participation by the Executive Directors or their 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 Independent Directors of the Company, 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 relevant Executive Directors or their related parties in the buy back programme to be fair and reasonable insofar as the Company's shareholders are concerned.

The Company now has an unutilised capacity to buy back up to a further 5,600,000 Ordinary Shares under the authority granted at the General Meeting on 9 September 2010. 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 15.83 per cent. of the Revised Issued Voting Share Capital, which do not carry voting rights.

The figure of 25,393,231 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.