Toy design firm looks to future after tough Christmas
The company behind 'Doctor Who' and 'Spiderman' toys today said there was light at the end of the tunnel for investors despite disappointing Christmas trading.
Shares in toy designer and distributor Character soared more than 20% after the firm said it expected “substantial revenue growth” in the second half of its current financial year, which ends in August.
Although the firm said first-half results – encompassing the festive season - would be poor, Character added that it had “weathered the problems” of tough high street conditions and a mass recall of its popular Bindeez craft toys.
The voluntary recall of up to 500,000 Bindeez children’s craft toys in November followed concerns that the product contained a chemical that converted into a powerful “date rape” drug when eaten – dealing a £2.5m (€3.3m) blow to revenues.
The firm’s shares tumbled by half last month when it warned on profits. But Character said today: “Despite acknowledging that trading conditions are likely to remain testing for some time, we believe that we are now back on track.”
The firm also stressed the strength of its balance sheet, with no debts and funds for potential further expansion.
It added that reaction from its major customers to its latest ranges of toys had been “positive and pleasing”.
Charles Stanley analyst Paul Bates said the firm was in a “comfortable position despite recent trading issues.”
He said: “Character has had the misfortune of a product recall followed by a weak trading environment. Yet the share price falls since the December trading statement have been severe, and, in our opinion, a significant over-reaction to events.”
The company, which employs around 230 staff, sells under its own brand and through retailers such as Argos, Woolworths and Toys “R” Us.
It is headquartered in Surrey, England, and also has a base in Lancashire, England.
