TIDMCCT
RNS Number : 0435Z
Character Group PLC
11 May 2023
LONDON, THURSDAY, 11 MAY 2023
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.
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 2023
KEY PERFORMANCE INDICATORS Six months Six months 12 months
CONTINUING OPERATIONS ended ended ended
28 February 28 February 31 August
2023 2022 2022
(unaudited) (unaudited) (audited)
-------------- -------------
Revenue GBP57.9m GBP90.9m GBP176.4m
Operating profit before highlighted GBP11.4m
items* GBP0.6m GBP6.5m
Pre-tax profit before highlighted items* GBP0.5m GBP6.5m GBP11.3m
Underlying basic earnings per share
before highlighted items* 0.54p 25.15p 45.73p
Diluted earnings per share before highlighted
items* 0.54p 24.62p 44.77p
Profit before tax GBP0.2m GBP6.5m GBP11.4m
Basic loss per share (0.85p) 25.21p 46.37p
Diluted loss per share (0.85p) 24.68p 45.39p
Dividend per share (declared) 8.0p 7.0p 17.0p
EBITDA GBP2.7m GBP8.4m GBP14.2m
Cash and cash equivalents GBP10.7m GBP21.5m* GBP20.0m
Net assets GBP37.1m GBP35.2m* GBP38.9m
----------------------------------------------- -------------- ------------- -----------
*Excludes
Mark to market (loss)/profit adjustments
on FX derivative positions GBP(0.3m) - GBP0.2m
----------------------------------------- ---------- --------
" The Board predicted at the start of the year that the Group's
trading performance would be very much one of two halves. "
" Whilst the conditions remain challenging, the Board has a
strong belief in the current product line up. The success of Heroes
of Goo Jit Zu continues and is supported by other lines, including
the influencer inspired Lanky Box and Aphmau products which are
also featuring well in our sales numbers. In addition, the
scheduled release of the new "Turtles" movie in August 2023 bodes
well for the launch this summer of the Teenage Mutant Ninja Turtles
line of products that we are distributing in the UK and Ireland.
"
" Overall, the Board is, accordingly, confident of the prospects
for the second half and continues to expect that Character's
profitability for FY2023 will be in line with current market
expectations * . "
*Current market consensus compiled by the Company for the year
ending 31 August 2023 is an underlying profit before tax of
c.GBP5m.
FTSE sector : leisure: FTSE AIM All-share: symbol: CCT: Market cap:
GBP 68 m
Copies of this statement can be viewed at www.thecharacter.com .
Product ranges can also be viewed at www.character-online.co.uk .
ENQUIRIES:
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
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 2023
INTRODUCTION
Since the Group's trading updates issued in October 2022 and
January 2023, trading conditions have continued to be challenging
across all the Group's markets. The business continues to have a
solid product portfolio for both its international and domestic
markets. A succession of exciting new introductions to be made in
the second half will, the Board believes, result in a significant
improvement in the Group's profitability in the second half of the
financial year.
GROUP TRADING
Revenue in the period at GBP 57.9m was down 36.3 % on the
comparable period last year (HY 2022 GBP90.9m; FY 2022:
GBP176.4m).
The Group is reporting a profit before tax and highlighted items
for the period of GBP 0.5 m (HY 2022: GBP6.5m; FY 2022:
GBP11.3m).
E arnings before interest, tax, depreciation and amortisation
(EBITDA) were GBP2.7m (HY 2022 GBP 8.4 m; FY 2022: GBP 14.2 m)
.
Gross profit margin in the period improved to 26.9 %, compared
to 24.8 % in the same 2022 period and 23.5 % for the August 2022
financial year. The increase in margin reflects the significant
reduction in sales to the USA market, which attracts a lower margin
than the Group's domestic and other international sales.
Underlying basic earnings per share before highlighted items
amounted to 0.54p (HY 2022: 25.15p; FY 2022: 45.73p). Diluted
earnings per share, on the same basis, were 0.54p (HY 2022: 24.62p;
FY 2022: 44.77p).
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 loss of GBP0.3m. This compares to a profit of GBP16,000 shown in
the corresponding period in 2022 and a profit of GBP0.2m reported
in the year to 31 August 2022. 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. To present the results on a "normal" basis, these
"mark to market" adjustments on FX derivative positions are
excluded, although shown separately as "highlighted items" to
demonstrate the "underlying" position.
FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW
The Group's net assets at 28 February 2023 were GBP 37.1 m (HY
2022: GBP 35.2 m; FY 2022: GBP38.9m). During the period, the Group
utilised cash from operations of GBP 2.8 m (HY 2022: GBP 3.4 m
generated; FY 2022: GBP4.2m generated). The Group's inventory stood
at an unseasonably high level of GBP26.2m at 31 August 2022,
however, by 28 February 2023 this had been reduced by GBP8.0m to
GBP18.1m (HY 2022: GBP17.9m).
The Group has no long-term debt. Net interest charges on the use
of working capital facilities during the period were GBP0.1m (HY
2022: GBP23,000; FY 2022: GBP0.2m). After making dividend payments,
the Group had cash and cash equivalents of GBP10.7m (HY 2022:
GBP21.5m; FY 2022: GBP20.0m) at the end of the first-half period.
In addition, the Group had unutilised headroom of over GBP50.0m
under its banking and other finance facilities.
DIVID
The Board remains committed to maintaining a progressive
dividend policy. T he Board is declaring an interim dividend of 8.0
p per share (HY 2022: 7.0p; final dividend 2022: 10.0p). Although
this is not supported by earnings cover (HY 2022 3.6 times), it
reflects the Board's confidence in the Group's prospects for a
second half recovery and performance beyond the current financial
year.
The interim dividend will be paid on 28 July 2023 to
shareholders on the register as at the close of business on 14 July
2023. The shares will be marked ex-dividend on 13 July 2023.
SHARE BUYBACK PROGRAMME
No share buybacks were conducted in the period under review.
Shareholders passed a resolution at the 2023 Annual General Meeting
authorising the Company to effect share buybacks (including by way
of tender offers) of up to 2,890,000 issued ordinary shares of 5p
each in the Company ("Ordinary Shares").
The Board will consider further buyback initiatives in the
future, including by way of a tender offer as the Directors
consider 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.
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 2,100,159 Ordinary
Shares in treasury which do not carry voting rights and,
accordingly, the total number of voting rights in Character is
19,365,770. The figure of 19,365,770 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 PEOPLE
As always, we are indebted to our teams that operate throughout
our markets globally. Their gritty determination to face the ever
changing, often unexpected, challenges that have affected our
markets in recent years is humbling. We have not encountered the
level of sales slowdown experienced in the first half for many
years and it has, no doubt, been dispiriting for our people but
they have shown, once again, a hunger for delivering the
anticipated turnaround for the second half and the restoration of
the previous growth pattern and fortunes of the Group. For this
continuing service and commitment, the Board thanks them on behalf
of all of our stakeholders.
OUTLOOK
The Board predicted at the start of the year that the Group's
trading performance would be very much one of two halves. Whilst
the conditions remain challenging, the Board has a strong belief in
the current product line up. The success of Heroes of Goo Jit Zu
continues and is supported by other lines, including the influencer
inspired Lanky Box and Aphmau products which are also featuring
well in our sales numbers. In addition, the scheduled release of
the new "Turtles" movie in August 2023 bodes well for the launch
this summer of the Teenage Mutant Ninja Turtles line of products
that we are distributing in the UK and Ireland.
Overall, the Board is, accordingly, confident of the prospects
for the second half and continues to expect that Character's
profitability for FY2023 will be in line with current market
expectation*. The Board will continue to update shareholders as we
progress through the year.
11 May 2023
*Current market consensus compiled by the Company for the year
ending 31 August 2023 is an underlying profit before tax of
c.GBP5m.
The Character Group plc
Consolidated Income Statement
six months ended 28 February 2023
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
2023 2023 2023 2022 2022 2022 2022 2022 2022
Result *highlighted Result Result *highlighted Result Result *highlighted Statutory
before items before items 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 57,887 - 57,887 90,947 - 90,947 176,402 - 176,402
Cost of sales (42,335) - (42,335) (68,347) - (68,347) (135,036) - (135,036)
---------------- ------------- ------------- ------------ ------------- -------------- ------------ ------------- ------------- ----------
Gross profit 15,552 - 15,552 22,600 - 22,600 41,366 - 41,366
Other income 334 - 334 339 - 339 502 - 502
Selling and
distribution
expenses (5,825) - (5,825) (5,140) - (5,140) (8,260) - (8,260)
Administrative
expenses (9,429) - (9,429) (11,251) - (11,251) (22,173) - (22,173)
Operating
profit 632 - 632 6,548 - 6,548 11,435 - 11,435
Finance income 75 - 75 17 - 17 51 - 51
Finance costs (164) - (164) (40) - (40) (207) - (207)
Changes in fair
value
of financial
instruments - (342) (342) - 16 16 - 159 159
Profit/(loss)
before tax 543 (342) 201 6,525 16 6,541 11,279 159 11,438
Income tax (438) 73 (365) (1,188) (3) (1,191) (2,018) (30) (2,048)
---------------- ------------- ------------- ------------ ------------- -------------- ------------ ------------- ------------- ----------
Profit/(loss)
for the
period 105 (269) (164) 5,337 13 5,350 9,261 129 9,390
---------------- ------------- ------------- ------------ ------------- -------------- ------------ ------------- ------------- ----------
*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 2023
Notes six months six months 12 months
ended ended ended
28 February 28 February 31 August
2023 2022 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------ --------------- ---------------
Attributable to:
----------------------------------------------- ------ --------------- --------------- -----------
Owners of the parent
(Loss)/profit for the period (164) 5,350 9,390
----------------------------------------------- ------ --------------- --------------- -----------
Earnings per share before significant
items (pence) 5
Basic earnings per share 0.54p 25.15p 45.73p
Diluted earnings per share 0.54p 24.62p 44.77p
----------------------------------------------- ------ --------------- --------------- -----------
Earnings per share after significant
items (pence) 5
----------------------------------------------- ------ --------------- --------------- -----------
Basic (loss)/earnings per share (0.85p) 25.21p 46.37p
Diluted (loss)/earnings per share (0.85p) 24.68p 45.39p
Dividend per share (pence) 4 10.00p 9.00p 15.0p
----------------------------------------------- ------ --------------- --------------- -----------
EBITDA
(earnings before interest, tax, depreciation
and amortisation) 2,694 8,407 14,195
----------------------------------------------- ------ --------------- --------------- -----------
The Character Group plc
Consolidated Statement of Comprehensive Income
six months ended 28 February 2023
six months six months 12 months
ended ended ended
28 February 28 February 31 August
2023 2022 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
--- -------------- ---------------
(Loss)/profit for the period after tax (164) 5,350 9,390
-------------------------------------------------- -------------- --------------- ------------
Items that may be reclassified subsequently
to profit and loss
Net exchange differences on translation
of foreign operations 98 201 1,091
-------------------------------------------------- -------------- --------------- ------------
Total comprehensive (loss)/income for
the period (66) 5,551 10,481
-------------------------------------------------- -------------- --------------- ------------
Total comprehensive income for the period
attributable to:
-------------------------------------------------- -------------- --------------- ------------
Equity holders of the parent (66) 5,551 10,481
-------------------------------------------------- -------------- --------------- ------------
The Character Group plc
Consolidated Balance Sheet
at 28 February 2023
28 February 28 February 31 August
2023
(unaudited) 2022 2022
GBP'000 (unaudited) (audited)
GBP'000 GBP'000
--- -------------- -------------
Non-current assets
Intangible assets 1,955 1,567 1,963
Investment property 1.420 1,485 1,453
Property, plant and equipment 9,915 8,471 9,307
Right of use assets 1,098 1,162 1,216
Deferred tax assets 450 432 542
------------------------------------------ -------------- ------------- -----------
14,838 13,117 14,481
----------------------------------------- -------------- ------------- -----------
Current assets
Inventories 18,133 17,946 26,173
Trade and other receivables 12,141 14,827 24,728
Current income tax receivable 498 596 576
Derivative financial instruments 77 44 412
Cash and cash equivalents 10,779 21,550 26,646
------------------------------------------ -------------- ------------- -----------
41,628 54,963 78,535
----------------------------------------- -------------- ------------- -----------
Current liabilities
Short term borrowings (121) (3) (6,627)
Trade and other payables (15,886) (29,133) (42,151)
Lease liabilities (658) (545) (577)
Income tax payable (1,367) (1,936) (3,345)
Derivative financial instruments (350) (118) (343)
------------------------------------------ -------------- ------------- -----------
(18,382) (31,735) (53,043)
----------------------------------------- -------------- ------------- -----------
Net current assets 23,246 23,228 25,492
------------------------------------------ -------------- ------------- -----------
Non - current liabilities
Deferred tax (492) (430) (427)
------------------------------------------ -------------- ------------- -----------
Lease liabilities (456) (676) (648)
------------------------------------------ -------------- ------------- -----------
(948) (1,106) (1,075)
----------------------------------------- -------------- ------------- -----------
Net assets 37,136 35,239 38,898
------------------------------------------ -------------- ------------- -----------
Equity
Called up share capital 1,074 1,074 1,074
Shares held in treasury (1,762) (1,826) (1,813)
Capital redemption reserve 1,883 1,883 1,883
Share based payment reserve 4,060 3,857 3,957
Share premium account 17,751 17,540 17,566
Merger reserve 651 651 651
Translation reserve 1,433 887 1,950
Profit and loss account 12,046 11,173 13,630
------------------------------------------ -------------- ------------- -----------
Total equity attributable to equity
holders of the parent 37,136 35,239 38,898
------------------------------------------ -------------- ------------- -----------
The Character Group plc
Consolidated Statement of Cash Flows
six months ended 28 February 2023
six months six months 12 months
ended
28 February ended ended
2023 28 February 31 August
(unaudited) 2022 2022
GBP'000 (unaudited) (audited)
GBP'000 GBP'000
-------------- --------------
Cash flow from operating activities
Profit before taxation for the period 201 6,541 11,438
----------------------------------------------- -------------- -------------- ------------
Adjustments for:
Depreciation of property, plant and equipment 341 304 556
Depreciation of investment property 33 33 66
Depreciation of right of use assets 321 276 632
Amortisation of intangible assets 1,383 1,246 1,509
(Profit) on disposal of property, plant
and equipment (16) - (3)
Interest expense 89 23 156
Financial instruments fair value adjustments 342 (16) (159)
Share based payments 103 108 208
Decrease/(increase) in inventories 8,040 (7,053) (15,280)
Decrease in trade and other receivables 12,587 11,192 1,291
(Decrease)/increase in trade and other
creditors (26,265) (9,257) 3,761
----------------------------------------------- -------------- -------------- ------------
Cash (utilised)/generated from operations (2,841) 3,397 4,175
----------------------------------------------- -------------- -------------- ------------
Interest paid (89) (23) (156)
Income tax paid (2,206) (841) (401)
----------------------------------------------- -------------- -------------- ------------
Net cash (outflow)/inflow from operating
activities (5,136) 2,533 3,618
----------------------------------------------- -------------- -------------- ------------
Cash flows from investing activities
Payments for intangible assets (1,376) (1,007) (1,666)
Payments for property, plant and equipment (953) (547) (1,845)
Proceeds from disposal of property, plant
and equipment 16 - 225
Net cash outflow from investing activities (2,313) (1,554) (3,286)
----------------------------------------------- -------------- -------------- ------------
Cash flows from financing activities
Payment of leasing liabilities (332) (268) (538)
Proceeds from issue of share capital 236 260 299
Purchase of own shares for cancellation - (13,640) (13,640)
Dividends paid (1,937) (1,929) (3,280)
Net cash used in financing activities (2,033) (15,577) (17,159)
----------------------------------------------- -------------- -------------- ------------
Net (decrease) in cash and cash equivalents (9,482) (14,598) (16,827)
Cash, cash equivalents and borrowings
at the beginning of the period 20,019 35,920 35,920
Effects of exchange rate movements 121 225 926
----------------------------------------------- -------------- -------------- ------------
Cash, cash equivalents and borrowings
at the end of the period 10,658 21,547 20,019
----------------------------------------------- -------------- -------------- ------------
Cash, cash equivalents and borrowings
consist of:
Cash, cash equivalents 10,779 21,550 26,646
Short term borrowings (121) (3) (6,627)
--------------------------------------- ------- ------- --------
Cash, cash equivalents and borrowings
at the end of the period 10,658 21,547 20,019
--------------------------------------- ------- ------- --------
The Character Group plc
Consolidated Statement of Changes in Equity
six months ended 28 February 2023
Called Shares Capital Share Share Profit
up held redemption premium Merger based Translation and
share in reserve account reserve payment reserve loss Total
capital treasury GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 account GBP'000
GBP'000 GBP'000 GBP'000
-------- --------- ----------- -------- --------- -------- ------------- ------------
Balance as at
31 August 2021
(audited) 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
------------------ -------- --------- ----------- -------- --------- -------- ------------- ------------ ---------
Balance as at
1 September 2021
(audited) 1,181 (1,870) 1,776 17,324 651 3,749 767 21,274 44,852
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
Profit for the year
after tax - - - - - - - 9,390 9,390
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
Net exchange differences
on translation of
foreign operations - - - - - - 1,183 (92) 1,091
Total comprehensive
income/(expense)
for the year - - - - - - 1,183 9,298 10,481
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
Transactions with
owners
Share based payment - - - - - 208 - - 208
Current tax credit
relating to exercised
share options - - - - - - - 18 18
Deferred tax relating
to share options - - - - - - - (40) (40)
Dividends - - - - - - - (3,280) (3,280)
Shares issued - 57 - 242 - - - - 299
Tender offer fees - - - - - - - (142) (142)
Shares cancelled
on tender offer (107) - 107 - - - - (13,498) (13,498)
At 31 August 2022
(unaudited) 1,074 (1,813) 1,883 17,566 651 3,957 1,950 13,630 38,898
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
(Loss) for the period - - - - - - - (164) (164)
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
Exchange differences
on translation of
foreign operations - - - - - - (517) 615 98
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
Total comprehensive
income/(expense)
for the period - - - - - - (517) 451 (66)
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
Transactions with
owners
Share based payment - - - - - 103 - - 103
Deferred tax relating
to share options - - - - - - - (98) (98)
Dividend paid - - - - - - - (1,937) (1,937)
Shares issued - 51 - 185 - - - - 236
Six months ended
28 February 2023 1,074 (1,762) 1,883 17,751 651 4,060 1,433 12,046 37,136
-------------------------- ------- --------- ------- -------- ----- ------- ------- --------- ---------
The Character Group plc
Notes to the Financial Statements
1. Basis of Preparation
The financial information set out in this Half Yearly Financial Report
for the six months ended 28 February 2023 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 2023. These are consistent with the accounting policies used
in the financial statements for the year ended 31 August 2022 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 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 10 May
2023.
The information for the year ended 31 August 2022 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 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 in the UK has an ongoing
invoice discount facility of GBP20m, together with overdraft and trade
finance facilities of GBP23m. 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 Interim report.
3. Dividends
six months six months 12 months ended
ended ended
28 February 28 February 31 August 2022
2023 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------- -------------
On equity shares:
Final dividend paid for the year
ended 31 August 2022
* 10.00p (2021: 9.00p) per share 1,937 1,929 1,929
* Interim - - 1,351
-------------------------------------------------- -------------- ------------- ----------------
1,937 1,929 3,280
-------------------------------------------------- -------------- ------------- ----------------
4. Earnings per share
Basic (loss)/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 (loss)/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 (2022: 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 2022
2023 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------------- ----------------------- -------------- ------------- ----------------
(Loss)/profit attributable to equity
shareholders of the parent (164) 5,350 9,390
-------------------------------------------- -------------- ------------- ----------------
Financial instruments fair value
adjustments net of tax 269 (13) (129)
-------------------------------------------- -------------- ------------- ----------------
Profit for adjusted earnings per
share 105 5,337 9,261
-------------------------------------------- -------------- ------------- ----------------
Weighted average number of shares
In issue during the year - basic 19,331,081 21,217,582 20,251,532
-------------------------------------------- -------------- ------------- ----------------
Weighted average number of ordinary
shares for basic and diluted loss
per share *(1) 19,331,081 - -
-------------------------------------------- -------------- ------------- ----------------
Dilutive potential ordinary shares 221,744 457,318 436,409
-------------------------------------------- -------------- ------------- ----------------
Weighted average number of ordinary
for diluted earnings per share 19,552,825 21,674.900 20,687,941
-------------------------------------------- -------------- ------------- ----------------
*(1) The potential ordinary shares on exercise of share options
are excluded from the number of weighted average shares due to
their anti-dilutive effect.
(Loss)/earnings per share
Basic (loss)/earnings per share (pence) (0.85) 25.21 46.37
----------------------------------------- ------- ------ ------
Diluted (loss)/earnings per share
(pence) (0.85) 24.68 45.39
----------------------------------------- ------- ------ ------
Adjusted earnings per share
Basic earnings per share (pence) 0.54 25.15 45.73
------------------------------------ ----- ------ ------
Diluted earnings per share (pence) 0.54 24.62 44.77
------------------------------------ ----- ------ ------
5. Electronic Communications
The Half Yearly Financial Report for the six months ended 28 February 2023
will shortly be available for viewing and download on the Group's website:
www.thecharacter.com .
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END
IR GPUPPAUPWUUG
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May 11, 2023 02:00 ET (06:00 GMT)
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