TIDMCCT
RNS Number : 1988L
Character Group PLC
12 May 2022
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018.
Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to
be in the public domain.
LONDON, THURSDAY 12 MAY 2022
The Character Group plc
(the "Company" or "Group" or Character")
Designers, developers and international distributor of toys,
games and giftware
HALF YEARLY FINANCIAL REPORT
for the six months ended 28 February 2022
KEY PERFORMANCE INDICATORS Six months Six months Full-year
CONTINUING OPERATIONS ended ended ended
28 February 28 February 31 August
2022 2021 2021
------------- -------------
Revenue GBP90.9m GBP74.5m GBP140.0m
Operating profit before highlighted GBP11.2m
items* GBP6.5m GBP6.1m
Pre-tax profit before highlighted GBP11.1m
items* GBP6.5m GBP6.1m
Basic earnings per share before
highlighted items* 25.15p 23.00p 40.92p
Diluted earnings per share before
highlighted items* 24.62p 22.93p 40.37p
Profit before tax GBP6.5m GBP7.6m GBP15.3m
Basic earnings per share 25.21p 28.76p 56.86p
Diluted earnings per share 24.68p 28.67p 56.09p
Dividend per share 7.0p 6.0p 15.0p
EBITDA GBP8.4m GBP7.9m GBP14.0m
Cash and cash equivalents (after GBP35.9m
a share buy-back of GBP13.6m) GBP21.5m GBP34.9m
Net assets (after a share buy-back GBP44.9m
of GBP13.6m) GBP35.2m GBP39.6m
------------------------------------- ------------- ------------- -----------
*Excludes
Mark to market (loss)/profit adjustments
on FX derivative positions - GBP(0.48)m GBP2.1m
Profit on sale of property - GBP2.02m GBP2.0m
* Against a backdrop of challenging operational
conditions, the Group has delivered a very solid
result first half result
* Goo Jit Zu , our number 1 brand continues to sell
well in UK and internationally in over 30 countries.
We are also seeing consistent growth in other brands
- Fireman Sam , Mashems , Jiggly Pets and Stretch
Armstrong
* New exciting products launched at the London Toy Fair
in January 2022 and being well received by our
customers
* The Group's strategy is to increasingly develop its
own products, either under its own brands or under
well-known marques licenced from global brand owners.
This strategy has enabled the Group to expand its
global sales.
"The momentum seen in sales in the first half is continuing,
particularly in the strong performance from our international FOB
business. We remain mindful, however, of the current difficult
macro-economic conditions and the recent weakness of Sterling. Like
many others across the industry, we also continue to experience
inbound shipping delays and other operational adversities due to
continuing COVID-19 concerns, particularly in China. Despite these
challenges, we expect the profit before tax and highlighted items
for the full financial year ending 31 August 2022 to be in line
with market expectations."
FTSE sector : leisure: FTSE AIM All-share: symbol: CCT.L: Market cap:
GBP112.3m
Copies of this statement can be viewed at www.thecharacter.com . Product
ranges can be viewed at www.character-online.co.uk .
The Character Group plc
Jon Diver, Joint Managing Director
Kiran Shah, Joint Managing Director
Office: +44 (0) 208 329 3377
Mobile: +44 (0) 7831 802219 (JD)
Mobile: +44 (0) 7956 278522 (KS)
Email : info@charactergroup.plc.uk
Panmure Gordon (Nominated Adviser and Joint Broker)
Atholl Tweedie, Investment Banking
Charles Leigh-Pemberton / Rupert Dearden, Corporate Broking
Tel: +44 (0) 20 7886 2500
Allenby Capital Limited (Joint Broker)
Nick Athanas, Corporate Finance
Amrit Nahal, Sales & Corporate Broking
Tel: +44 (0) 20 3328 5656
TooleyStreet Communications Limited (Investor and media relations)
Fiona Tooley
Tel: +44 (0) 7785 703523
Email : fiona@tooleystreet.com
The Character Group plc
(the "Company" or "Group" or "Character")
Designers, developers and international distributor of toys,
games and giftware
HALF YEARLY FINANCIAL REPORT
for the six months ended 28 February 2022
INTRODUCTION
Against a backdrop of challenging operational conditions, the
Group has delivered a very solid result for the period under
review.
The Group's income in the period was GBP90.9m, an increase of
22% over the same six months in 2021 (HY 2021: GBP74.5m). This is a
great achievement given the global logistics challenges encountered
in the first half, particularly in the lead up to Christmas 2021.
The profit before tax and highlighted items was GBP6.5m, an
increase of 7.7% over the same period in the previous year (HY
2021: GBP6.1m). The Group also generated cash of GBP3.4m from
operations. At the end of the period, cash at bank was GBP21.5m
after a share buyback of c.GBP13.6m.
COVID-19 concerns and effects remained at the core of the global
supply chain difficulties. Although the majority of countries where
we sell or distribute our products relaxed or even eliminated
COVID-19 restrictions, the strict controls applied in China, where
almost all of the Group's manufacturing takes place, resulted in
delays in production at factories and shipping exports to our
global markets. Consequently, this led to extended lead times,
uncertainty over delivery dates and significant cost increases. In
the UK, the shortage of HGV driver capacity and delays at ports
added to the convolutions that all these factors have presented to
the business.
Despite such difficulties, the business has traded well in the
first six months of the current financial year, as the Group's
reported revenue reflects, and the sales momentum is continuing
into the second half.
GROUP TRADING
As stated, revenue in the period at GBP90.9m was up 22% on the
comparable period last year (HY 2021 GBP74.5m; FY 2021:
GBP140.0m).
The Group is reporting a profit before tax and highlighted items
for the period of GBP6.5m (HY 2021: GBP6.1m; FY 2021: GBP11.1m). E
arnings before interest, tax, depreciation and amortisation
(EBITDA) were GBP8.4m (HY 2021 GBP7.9m; FY 2021: GBP14.0m) .
Gross profit margin in the period came in at 24.8%, compared to
29.2% in the same 2021 period and 28.9% for the August 2021
financial year. The reduction in margin reflects the growth in
international FOB sales, particularly in the competitive USA
market, which attracts a lower margin than the Group's domestic
sales. The increases in costs of production in the Far East and the
continuing high freight costs also affected the margin.
Basic earnings per share before highlighted items amounted to
25.15p (HY 2021: 23.0p; FY 2021: 40.92p). Diluted earnings per
share, on the same basis, were 24.62p (HY 2021: 22.93p; FY 2021:
40.37p).
A significant proportion of the Group's purchases are made in US
dollars. The business is therefore exposed to foreign currency
fluctuations and manages the associated risk through the purchase
of forward exchange contracts and derivative financial instruments.
Under International Financial Reporting Standards (IFRS), at the
end of each reporting period the Group is required to make an
adjustment in its financial statements to incorporate a 'mark to
market' valuation of such financial instruments. The 'mark to
market' adjustment for the financial period under review results in
a profit of GBP16,000. This compares to a charge of GBP0.48m shown
in the corresponding period in 2021 and a profit of GBP2.1m
reported in the year to 31 August 2021. These 'mark to market'
adjustments are non-cash items, calculated by reference to
unpredictable and sometimes volatile currency spot rates at the
respective balance sheet dates.
FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW
The Group's capital base remained solid, with net assets at 28
February 2022 of GBP35.2m, after a share buyback of GBP13.6m (HY
2021: GBP39.6m; FY 2021: GBP44.9m). During the period, the Group
generated cash from operations of GBP3.4m (HY 2021: GBP21.3m; FY
2021: GBP27.3m). The reduction in cash generation is mainly due to
the increase in the inventory position.
The Group has no long-term debt. Net interest charges on the use
of working capital facilities during the period were GBP23,000
(HY 2021: GBP0.1m; FY 2021: GBP0.1m). After implementing the
GBP13.6m tender offer in February 2022 and making dividend
payments, the Group had cash and cash equivalents of GBP21.5m (HY
2021: GBP34.9m; FY 2021: GBP35.9m) at the end of the first-half
period. In addition, the Group had unutilised headroom of over
GBP50m under its banking and other finance facilities.
One of the difficulties experienced in the lead up to Christmas
2021 was the Group's inability to satisfy all customer demand due
to the shortage of stock. Inventory at 28 February 2022 of GBP17.9m
was materially up against the comparative period last year
(HY 2021: GBP9.1m). These remain high, due in part to late
arrivals of stock but increasingly to a conscious decision to bring
stock in early to ensure the ability of the Group to satisfy demand
and maintain sales in the second half.
DIVID
The Board remains committed to maintaining a progressive
dividend policy. Reflecting its confidence in the Company's ability
to continue to grow profits and generate and develop further
sustainable cash flow, t he Board is declaring an interim dividend
of 7.0 p per share (HY 2021: 6.0p; final dividend 2021: 9.0p). This
interim dividend, which is covered 3.6 times by the earnings before
highlighted items (HY 2021: 3.8 times), will be paid on 29 July
2022 to shareholders on the register as at the close of business on
15 July 2022. The shares will be marked ex-dividend on 14 July
2022.
SHARE BUYBACK PROGRAMME
Shareholders passed a resolution at the Annual General Meeting
held in January 2022 authorising the Company to effect share
buybacks (including by way of tender offers) of up to 3,200,000
issued ordinary shares of 5p each in the Company ("Ordinary
Shares").
The Company announced a Tender Offer to buyback up to 10% of the
Company's total voting rights on 28 January 2022. The exercise was
successfully completed in February 2022 and the Company bought back
a total of 2,142,572 Ordinary Shares at a price of GBP6.30 per
Ordinary Share pursuant to the Tender Offer. The Company has a
remaining unutilised capacity to buyback up to a further 1,057,428
ordinary shares under the authority granted at the 2022 AGM.
T he Board continues to believe that it is in the interests of
all shareholders to provide investors who wish to realise part or
all of their investment in the Group with an opportunity to access
liquidity that is not otherwise available in the market and to
return excess capital to shareholders. The Board will consider
further buyback initiatives in the future, reflecting its
confidence in the Group's ability to maintain strong, ongoing cash
generation in excess of the current and projected requirements of
the business .
TOTAL VOTING RIGHTS (TVR)
As at today's date, the Company's issued share capital consists
of 21,465,929 Ordinary Shares. The Company holds 2,165,577 Ordinary
Shares in treasury which do not carry voting rights and,
accordingly, the total number of voting rights in Character is
19,300,352 . The figure of 19,300,352 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 FCA's Disclosure
Guidance and Transparency Rules.
OUR PRODUCT PORTFOLIO
Goo Jit Zu , our number 1 brand continues to sell well in the UK
and internationally in over 30 countries. We are also seeing
consistent growth in other brands - Fireman Sam , Mashems , Jiggly
Pets and Stretch Armstrong .
We introduced some exciting new products at the London Toy Fair
in January 2022:
Ø Weebles , including licenced ranges featuring Peppa
Pig , Cocomelon and Bluey;
Ø Chill Factor (the brand we acquired last year), with
a number of new brand extensions;
Ø Mouse in the House , a new concept and brand that we
have wholly developed in-house; and
Ø Shimmer and Sparkle , including the Instaglam make
up-range.
The Group's strategy is to increasingly develop its own
products, either under its own brands or under well-known marques
licenced from global brand owners. This approach has enabled the
Group to expand its global sales in recent years. Whilst
opportunities to capture distribution rights for third-party
products in our domestic markets in the UK and Scandinavia continue
to be sought and taken, the increase in investment in our own
product development demonstrates that we remain committed to
developing this successful strategy further and enhancing our
global toy company credentials.
To view our full current portfolio of products and brands, go to
www.character-online.co.uk .
OUR PEOPLE
The teams at Character in the UK, Scandinavia and the Far East
have consistently demonstrated an ability to anticipate and adapt
to the conditions in our markets.
The onset of COVID-19 could not have been anticipated. However,
the Board believes that the manner in which the Group initially
preserved and subsequently grew the business, and has continued to
do so, is a testament to the enterprising spirit , consummate
skills, irrepressible optimism and uncompromising dedication of
every member of the Group's global teams. Collaboration is in our
DNA and sees its expression in the seamless coordination of our
teams' responses to market intelligence and data from our business.
This, combined with our close working relationships with our
customers and suppliers, underpins our proven ability to identify
and profitably exploit brand and product development opportunities
in the market.
As always, on behalf of all stakeholders in the business, the
Board wishes to express thanks to all our colleagues for their
efforts and commitment.
OUTLOOK
As we indicated earlier in this report, the momentum seen in
sales in the first half is continuing, particularly in the strong
performance from our international FOB business. We remain mindful,
however, of the current difficult macro-economic conditions and the
recent weakness of Sterling. Like many others across the industry,
we also continue to experience inbound shipping delays and other
operational adversities due to continuing COVID-19 concerns,
particularly in China.
Despite these challenges, we expect the profit before tax and
highlighted items for the full financial year ending 31 August 2022
to be in line with market expectations.
The Board will keep shareholders updated as we progress through
the year.
12 May 2022
The Character Group plc
Consolidated Income Statement
six months ended 28 February 2022
six months six months six months six months six months six months 12 months 12 months 12 months
ended ended ended ended ended ended ended ended ended
28 February 28 February 28 February 28 February 28 February 28 February 31 August 31 August 31 August
2022 2022 2022 2021 2021 2021 2021 2021 2021
Result *highlighted Statutory Result *highlighted Statutory Result *highlighted Statutory
before items Result before items Result before items Result
*highlighted *highlighted *highlighted
items (unaudited) (unaudited) items (unaudited) (unaudited) items (audited) (audited)
(unaudited) GBP'000 GBP'000 (unaudited) GBP'000 GBP'000 (audited) GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
------------- -------------- ------------- -------------- ------------- -------------
Revenue 90,947 - 90,947 74,543 - 74,543 139,997 - 139,997
Cost of sales (68,347) - (68,347) (52,751) - (52,751) (99,553) - (99,553)
---------------- ------------- -------------- ------------ ------------- -------------- ------------ ------------- ------------- ----------
Gross profit 22,600 - 22,600 21,792 - 21,792 40,444 - 40,444
Other income 339 - 339 256 - 256 332 - 332
Selling and
distribution
expenses (5,140) - (5,140) (5,469) - (5,469) (8,248) - (8,248)
Administrative
expenses (11,251) - (11,251) (10,468) - (10,468) (21,301) - (21,301)
Profit on sale
of
property - - - - 2,016 2,016 - 2,016 2,016
---------------- ------------- -------------- ------------ ------------- -------------- ------------ ------------- ------------- ----------
Operating
profit 6,548 - 6,548 6,111 2,016 8,127 11,227 2,016 13,243
Finance income 17 - 17 15 - 15 36 - 36
Finance costs (40) - (40) (66) - (66) (113) - (113)
Changes in fair
value
of financial
instruments - 16 16 - (482) (482) - 2,128 2,128
Profit before
tax 6,525 16 6,541 6,060 1,534 7,594 11,150 4,144 15,294
Income tax (1,188) (3) (1,191) (1,095) (303) (1,398) (2,353) (737) (3,090)
---------------- ------------- -------------- ------------ ------------- -------------- ------------ ------------- ------------- ----------
Profit for the
period 5,337 13 5,350 4,965 1,231 6,196 8,797 3,407 12,204
---------------- ------------- -------------- ------------ ------------- -------------- ------------ ------------- ------------- ----------
*highlighted items comprise material items that are disclosed
separately by virtue of their size or incidence and because they
are considered relevant to an
understanding of the overall performance of the company.
The Character Group plc
Consolidated Income Statement
six months ended 28 February 2022
Notes six months six months 12 months
ended ended ended
28 February 28 February 31 August
2022 2021 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------- --------------- ---------------
Attributable to:
----------------------------------------------- ------- --------------- --------------- -----------
Owners of the parent 5,350 6,148 12,156
Non- controlling interest - 48 48
----------------------------------------------- ------- --------------- --------------- -----------
Profit for the period 5,350 6,196 12,204
----------------------------------------------- ------- --------------- --------------- -----------
Earnings per share before highlighted
items (pence) 4
Basic earnings per share 25.15p 23.00p 40.92p
Diluted earnings per share 24.62p 22.93p 40.37p
----------------------------------------------- ------- --------------- --------------- -----------
Earnings per share after highlighted
items (pence) 4
----------------------------------------------- ------- --------------- --------------- -----------
Basic earnings per share 25.21p 28.76p 56.86p
Diluted earnings per share 24.68p 28.67p 56.09p
Dividend per share (pence) 3 9.00p 3.00p 15.0p
----------------------------------------------- ------- --------------- --------------- -----------
EBITDA
(earnings before interest, tax, depreciation
and amortisation) 8,407 7,889 14,036
----------------------------------------------- ------- --------------- --------------- -----------
The Character Group plc
Consolidated Statement of Comprehensive Income
six months ended 28 February 2022
six months six months 12 months
ended ended ended
28 February 28 February 31 August
2022 2021 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--- -------------- ---------------
Profit for the period after tax 5,350 6,196 12,204
Items that may be reclassified subsequently
to profit and loss
Net exchange differences on translation
of foreign operations 201 (247) 7
-------------------------------------------------- -------------- --------------- ------------
Total comprehensive income for the period 5,551 5,949 12,211
-------------------------------------------------- -------------- --------------- ------------
Total comprehensive income for the period
attributable to:
-------------------------------------------------- -------------- --------------- ------------
Equity holders of the parent 5,551 5,906 12,163
Non-controlling interest - 43 48
-------------------------------------------------- -------------- --------------- ------------
5,551 5,949 12,211
-------------------------------------------------- -------------- --------------- ------------
The Character Group plc
Consolidated Balance Sheet
at 28 February 2022
28 February 28 February 31 August
2022
(unaudited) 2021 2021
GBP'000 (unaudited) (audited)
GBP'000 GBP'000
--- -------------- -------------
Non-current assets
Intangible assets 1,567 446 1,806
Investment property 1,485 1,551 1,519
Property, plant and equipment 8,471 7,422 8,230
Right of use assets 1,162 1,718 1,454
Deferred tax assets 432 658 243
------------------------------------------ -------------- ------------- -----------
13,117 11,795 13,252
----------------------------------------- -------------- ------------- -----------
Current assets
Inventories 17,946 9,145 10,893
Trade and other receivables 14,827 11,651 26,019
Current income tax receivable 596 244 766
Derivative financial instruments 44 206 75
Cash and cash equivalents 21,550 35,037 35,920
------------------------------------------ -------------- ------------- -----------
54,963 56,283 73,673
----------------------------------------- -------------- ------------- -----------
Current liabilities
Short term borrowings (3) (140) -
Trade and other payables (29,133) (22,589) (38,390)
Lease liabilities (545) (538) (557)
Income tax payable (1,936) (951) (1,610)
Derivative financial instruments (118) (2,906) (165)
------------------------------------------ -------------- ------------- -----------
(31,735) (27,124) (40,722)
----------------------------------------- -------------- ------------- -----------
Net current assets 23,228 29,159 32,951
------------------------------------------ -------------- ------------- -----------
Non --current liabilities
Deferred tax (430) (90) (405)
Lease liabilities (676) (1,221) (946)
------------------------------------------ -------------- ------------- -----------
(1,106) (1,311) (1,351)
----------------------------------------- -------------- ------------- -----------
Net assets 35,239 39,643 44,852
------------------------------------------ -------------- ------------- -----------
Equity
Called up share capital 1,074 1,181 1,181
Shares held in treasury (1,826) (1,870) (1,870)
Capital redemption reserve 1,883 1,776 1,776
Share based payment reserve 3,857 3,640 3,749
Share premium account 17,540 17,324 17,324
Merger reserve 651 651 651
Translation reserve 887 590 767
Profit and loss account 11,173 16,351 21,274
------------------------------------------ -------------- ------------- -----------
Total equity attributable to equity
holders of the parent 35,239 39,643 44,852
------------------------------------------ -------------- ------------- -----------
The Character Group plc
Consolidated Statement of Cash Flows
six months ended 28 February 2022
six months six months 12 months
ended
28 February ended ended
2022
(unaudited) 28 February 31 August
2021
GBP'000 (unaudited) 2021
GBP'000 (audited)
GBP'000
-------------- --------------
Cash flow from operating activities
Profit before taxation for the period 6,541 7,594 15,294
---------------------------------------------------- -------------- -------------- ------------
Adjustments for:
Depreciation of property, plant and equipment 304 284 567
Depreciation of investment property 33 33 65
Depreciation of right of use assets 276 278 556
Amortisation of intangible assets 1,246 1,187 1,621
Write off plant and equipment - - 132
(Profit)/loss on disposal of property, plant
and equipment - (2,020) (2,028)
Interest expense 23 51 77
Financial instruments fair value adjustments (16) 482 (2,128)
Share based payments 108 271 380
(Increase)/decrease in inventories (7,053) 5,591 3,853
Decrease/(increase) in trade and other receivables 11,192 11,362 (3,006)
(Decrease)/increase in trade and other creditors (9,257) (3,843) 11,957
---------------------------------------------------- -------------- -------------- ------------
Cash generated from operations 3,397 21,270 27,340
---------------------------------------------------- -------------- -------------- ------------
Interest paid (23) (51) (77)
Income tax paid (841) (1,065) (1,788)
---------------------------------------------------- -------------- -------------- ------------
Net cash inflow from operating activities 2,533 20,154 25,475
---------------------------------------------------- -------------- -------------- ------------
Cash flows from investing activities
Purchase of business - - (945)
Payments for intangible assets (1,007) (742) (1,615)
Payments for property, plant and equipment (547) (5,918) (7,128)
Proceeds from disposal of property, plant
and equipment - 3,450 3,458
Net cash outflow from investing activities (1,554) (3,210) (6,230)
---------------------------------------------------- -------------- -------------- ------------
Cash flows from financing activities
Payment of leasing liabilities (268) (338) (606)
Proceeds from issue of share capital 260 - -
Purchase of own shares for cancellation (13,640) - -
Dividends paid (1,929) (642) (1,924)
Net cash used in financing activities (15,577) (980) (2,530)
---------------------------------------------------- -------------- -------------- ------------
Net (decrease)/increase in cash and cash
equivalents (14,598) 15,964 16,715
Cash, cash equivalents and borrowings at
the beginning of the period 35,920 19,124 19,124
Effects of exchange rate movements 225 (191) 81
---------------------------------------------------- -------------- -------------- ------------
Cash, cash equivalents and borrowings at
the end of the period 21,547 34,897 35,920
---------------------------------------------------- -------------- -------------- ------------
Cash, cash equivalents and borrowings consist
of:
Cash, cash equivalents 21,550 35,037 35,920
Short term borrowings (3) (140) -
----------------------------------------------- ------- ------- -------
Cash, cash equivalents and borrowings at the
end of the period 21,547 34,897 35,920
----------------------------------------------- ------- ------- -------
The Character Group plc
Consolidated Statement of Changes in Equity
six months ended 28 February 2022
Called Shares Capital Share Share Profit Non-
up held redemption premium Merger based Translation and controlling
share in reserve account reserve payment reserve loss interest Total
capital treasury GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 account GBP'000 GBP'000
GBP'000 GBP'000 GBP'000
-------- --------- ----------- -------- --------- -------- ------------- -------- ------------
Balance as
at
31 August
2020
(unaudited) 1,181 (1,870) 1,776 17,324 651 3,369 727 11,231 (343) 34,046
------------------ -------- --------- ----------- -------- --------- -------- ------------- -------- ------------ ---------
Profit for
the period - - - - - - - 6,148 48 6,196
Exchange
differences
on translation
of foreign
operations - - - - - - (137) (105) (5) (247)
Total
comprehensive
income/(expense)
for the period - - - - - - (137) 6,043 43 5,949
------------------ -------- --------- ----------- -------- --------- -------- ------------- -------- ------------ ---------
Transactions
with owners
Change in
non-controlling
interest - - - - - - - (300) 300 -
Dividend paid - - - - - - - (642) - (642)
Deferred tax
relating to
share options - - - - - - - 19 - 19
Share based
payment - - - - - 271 - - - 271
------------------ -------- --------- ----------- -------- --------- -------- ------------- -------- ------------ ---------
Six months
ended
28 February
2021 1,181 (1,870) 1,776 17,324 651 3,640 590 16,351 - 39,643
------------------ -------- --------- ----------- -------- --------- -------- ------------- -------- ------------ ---------
Balance as
at
1 September
2020
(audited) 1,181 (1,870) 1,776 17,324 651 3,369 727 11,231 (343) 34,046
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
Profit for
the year after
tax - - - - - - - 12,156 48 12,204
Net exchange
differences
on translation
of foreign
operations - - - - - - 40 (28) (5) 7
Total comprehensive
income for
the year - - - - - - 40 12,128 43 12,211
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
Transactions
with owners
Change in
non-controlling
interest - - - - - - - (300) 300 -
Share based
payment - - - - - 380 - - - 380
Deferred tax
relating to
share options - - - - - - - 139 - 139
Dividends - - - - - - - (1,924) - (1,924)
At 31 August
2021 1,181 (1,870) 1,776 17,324 651 3,749 767 21,274 - 44,852
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
Profit for
the period - - - - - - - 5,350 - 5,350
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
Net exchange
differences
on translation
of foreign
operations - - - - - - 120 81 - 201
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
Total comprehensive
income/(expense)
for the period - - - - - - 120 5,431 - 5,551
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
Transactions
with owners -
Share based
payment - - - - - 108 - - - 108
Deferred tax
relating to
share options - - - - - - - 37 - 37
Dividend paid - - - - - - - (1,929) - (1,929)
Shares issued - 44 - 216 - - - - - 260
Tender offer
fees - - - - - - - (142) - (142)
Cancellation
on tender offer (107) - 107 - - - - (13,498) - (13,498)
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
Six months
ended
28 February
2022 1,074 (1,826) 1,883 17,540 651 3,857 887 11,173 - 35,239
---------------------- ------- --------- ------- -------- ----- ------- ----- ------------ ------- ---------
The Character Group plc
Notes to the Financial Statements
six months ended 28 February 2022
1. BASIS OF PREPARATION
The financial information set out in this Half Yearly Financial Report
has been prepared under International Financial Reporting Standards (IFRS)
as adopted by the European Union and in accordance with the accounting
policies which will be adopted in presenting the Group's Annual Report
and Financial Statements for the year ending 31 August 2022. These are
consistent with the accounting policies used in the financial statements
for the year ended 31 August 2021 as described in those annual financial
statements.
As permitted, this Half Yearly Financial Report has been prepared in accordance
with the AIM rules and not in accordance with
IAS 34 'Interim Financial Reporting'.
The consolidated financial statements are prepared under the historical
cost convention, as modified by the revaluation of certain financial instruments
and share based payments at fair value.
These Half Yearly Financial Statements and the financial information for
the six months ended 28 February 2021 do not constitute full statutory
accounts within the meaning of section 434 of the Companies Act 2006 and
are unaudited. These unaudited Half Yearly Financial statements were approved
by the Board of Directors on 11 May 2022.
The information for the year ended 31 August 2021 is based on the consolidated
financial statements for that year on which the Group's auditor's report
was unqualified and did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
2. GOING CONCERN
The Directors acknowledge the Financial Reporting Council's 'Guidance
on the going concern basis of accounting and reporting on solvency and
liquidity risks' issued in April 2016.
In assessing the Group and Company's ability to continue as a going concern,
the Board reviews and approves the annual budget and updated forecasts,
including forecasts of cash flows, borrowing requirements and headroom.
The Board reviews the Group's sources of available funds and the level
of headroom available against its committed borrowing facilities. The
Group's financial forecasts, taking into account possible sensitivities
in trading performance including the potential impact of COVID-19, indicate
that the Group will be able to operate within the level of its committed
borrowing facilities for the foreseeable future. The banks remain supportive
of the Group and has an ongoing invoice discount facility of GBP20m, together
with overdraft and trade finance facilities of GBP3 8 m. The Directors
have a reasonable expectation that the Group and Company have adequate
resources to continue their operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis of
accounting in preparing the Half Yearly Report.
3. DIVIDS
six months six months 12 months ended
ended ended
28 February 28 February 31 August 2021
2022 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------- -------------
On equity shares:
Final dividend paid for the year
ended 31 August 2021
* 9.00p (2020: 3.00p) per share 1,929 642 642
Interim dividend paid for the year
ended 31 August 2021
* 6.00p per share - - 1,282
------------------------------------------------- -------------- ------------- ----------------
1,929 642 1,924
------------------------------------------------- -------------- ------------- ----------------
The Character Group plc
Notes to the Financial Statements
six months ended 28 February 2022
4. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
during the period.
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of
all dilutive potential ordinary shares. The Group has one (2021: one)
category of dilutive potential ordinary shares, being share options granted
where the exercise price is less than average price of the company's ordinary
shares during this period.
An adjusted earnings per share has also been calculated as, in the opinion
of the directors, this will allow shareholders to gain a clearer understanding
of the trading performance of the Group.
The calculations are based on the following:
six months six months 12 months ended
ended ended
28 February 29 February 31 August 2021
2022 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------------- ------------- ----------------
Profit attributable to equity shareholders
of the parent 5,350 6,148 12,156
------------------------------------------------- -------------- ------------- ----------------
Financial instruments fair value adjustments
net of tax (13) 391 (1,724)
------------------------------------------------- -------------- ------------- ----------------
Gain on sale of property net of tax - (1,622) (1,683)
------------------------------------------------- -------------- ------------- ----------------
Profit for adjusted earnings per share 5,337 4,917 8,749
------------------------------------------------- -------------- ------------- ----------------
Weighted average number of shares
In issue during the year - basic 21,217,582 21,379,781 21,379,781
Dilutive potential ordinary shares 457,318 66,078 291,974
------------------------------------------------- -------------- ------------- ----------------
Weighted average number of ordinary
for diluted earnings per share 21,674,900 21,445,859 21,671,755
------------------------------------------------- -------------- ------------- ----------------
Earnings per share after highlighted
items
Basic earnings per share (pence) 25.21 28.76 56.86
-------------------------------------- ------ ------ ------
Diluted earnings per share (pence) 24.68 28.67 56.09
-------------------------------------- ------ ------ ------
Earnings per share before highlighted
items
Basic earnings per share (pence) 25.15 23.00 40.92
--------------------------------------- ------ ------ ------
Diluted earnings per share (pence) 24.62 22.93 40.37
--------------------------------------- ------ ------ ------
5. ELECTRONIC COMMUNICATIONS
The Half Yearly Financial Report for the six months ended 28 February
2022 will shortly be available for viewing and download on the Group's
website, www.thecharacter.com .
--- ------------------------------------------------------------------------
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END
IR GPUWUAUPPUUP
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