TIDMCCT
RNS Number : 5932K
Character Group PLC
22 December 2022
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR. 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, 22 December 2022
THE CHARACTER GROUP PLC
("Character", "Group" or "Company")
Designers, developers and international distributor of toys,
games and giftware
AUDITED ANNUAL RESULTS FOR THE YEARED 31 AUGUST 2022
The information contained within this announcement is a summary
taken from the Group's audited 2022 Annual Report and Accounts,
which can be viewed in full on the Company's website at:
www.thecharacter.com . The 2022 Annual Report and Accounts will
also be posted to shareholders who have elected to receive printed
copies.
The Company gives notice that the 2023 Annual General Meeting of
the Company will be held at , 86 - 88 Coombe Road, New Malden,
Surrey, KT3 4QS on Friday, 20 January 2023 at 11.00 am. T he Notice
of AGM appears at the end of the 2022 Annual Report and
Accounts.
Highlights:
KEY PERFORMANCE INDICATORS 12 months 12 months ended
ended 31 August 2021
31 August
2022
-----------
Revenue GBP176.4m GBP140.0m
Operating profit (before highlighted items) GBP11.4m GBP11.2m
*
Profit before tax (before highlighted items) GBP11.3m GBP11.1m
*
Statutory profit before tax GBP11.4m GBP15.3m
EBITDA GBP14.2m GBP14.0m
Basic earnings per share before highlighted
items* 45.73p 40.92p
Diluted earnings per share before highlighted
items* 44.77 p 40.37p
Basic earnings per share after highlighted
items 46.37 p 56.86p
Diluted earnings per share after highlighted
items 45.39p 56.09p
Dividends declared per share for the year 17.0p 15.0p
Net assets GBP38.9m GBP44.9m
Net cash GBP20.0m GBP35.9m
----------------------------------------------- ----------- ----------------
*Excludes:
Mark to market profit adjustments on FX
derivative positions GBP0.2m GBP2.1m
Profit on sale of property - GBP2.0m
* Notable performers in 2022 included Goo Jit Zu -
distributed in over 40 territories, Chill Factor ,
Weebles , Cra-Z-Art Shimmer 'n Sparkle and Peppa Pig
* Toy Retailers Association's prestigious "DreamToys",
'Top 12 list' for Christmas included two of our
products, namely Heroes of Goo Jit Zu and Jiggly Pets
Gigi the Giraffe
Going into 2023:
* the Group has a strong product offering for its
markets and has been very well received by customers
* The new ranges and additions include new products
under our multi-territory Stretch Armstrong product
range including Star Wars and Transformers; a line of
Teenage Mutant Ninja Turtles products from Playmates
International for domestic distribution to coincide
with a new Turtles movie to be released in the second
half; and the distribution of exciting toy ranges
from Bonkers Toys based on the Aphmau and Lanky Box
brands.
"The strength of our brands and products portfolio in 2022 has
enabled us to significantly increase sales despite intense margin
pressure T rading conditions have become more challenging and sales
have slowed in the lead up to Christmas and combined with other
factors will adversely affect the Group's performance in the first
half of the current financial year."
This being said, as we look ahead on the back of a strong 2023
offering, international sales are forecast to grow significantly in
the second half of the current financial year with margin
improvement from that time. Although we expect domestic sales to be
flat in the second half, the substantial reductions in freight
rates, together with reduced costs of production from factories in
China and strengthening of Sterling against the US Dollar from its
recent low point has given the Board considerable optimism for a
second half rebound."
ENQUIRIES:
The Character Group plc
Jon Diver, Joint Managing Director
Kiran Shah, Joint Managing Director & Group Finance Director
Office: +44 (0) 208 329 3377
Mobile: +44 (0) 7831 802219 (JD)
Mobile: +44 (0) 7956 278522 (KS)
Email: info@charactergroup.plc.uk
FTSE sector : leisure
FTSE AIM All-share: symbol: CCT.L
Market cap : GBP 82 m
Product ranges can be viewed at www.character-online.co.uk .
Panmure Gordon
(Nominated Adviser and Joint Broker)
Atholl Tweedie, Investment Banking
Rupert Dearden / Charles Leigh-Pemberton, Corporate Broking
Tel: +44 (0) 20 7886 2500
Allenby Capital Limited
(Joint Broker)
Nick Athanas, Corporate Broking
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
Note:
The Key Performance Indicators (KPI's) table shown at the top of this
Announcement provide the data on an underlying basis and, also by reference
to Generally Accepted Accounting Practice (GAAP) as adopted and applied
consistently by the Group.
THE CHARACTER GROUP plc
Designers, developers and international distributor of toys,
games and giftware
FINAL AUDITED RESULTS FOR THE YEARED 31 AUGUST 2022
INTRODUCTION
The preliminary indications given in the trading update issued
by the Company on 4 October 2022 have been confirmed in the final
results for the year ended 31 August 2022, with the Group
delivering a creditable profit before tax before highlighted items,
of GBP11.3m. The turnover in the year improved significantly to
GBP176.4m (FY 2021: GBP 140.0m ), driven primarily by increased
sales of the Group's Goo Jit Zu product line in the USA. However,
increases in costs of materials, production and freight throughout
the year, resistance to price increases and, increasingly in the
second half, the strengthening of the US Dollar have eroded margins
and denied the Group a corresponding uplift in profitability.
The Group continued to be cash generative, delivering GBP4.2m of
cash from operations in the year (2021: GBP27.3m), despite an
increase in inventories of GBP15.3m due to a conscious decision to
bring stock in early. We finished the year with a net cash balance
of GBP20.0m (2021: GBP35.9m), after funding the GBP13.6m tender
offer buyback of shares , which completed in February 2022.
OPERATIONAL PERFORMANCE
Group revenue in the year to 31 August 2022 was GBP 176.4m ,
against a turnover of GBP 140.0 m in the comparable 2021 period.
The gross profit margin was 23.5 % (FY 2021: 28.9%) and, on an
absolute basis, the gross profit was GBP41.3 m compared to GBP40.4m
for the previous year.
A significant proportion of the Group's purchases are made in US
dollars; the Group 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 this financial period results in a notional
profit of GBP0.2m. This compares to a corresponding notional 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
relevant balance sheet dates. To present the results on a "normal"
basis, these "mark to market" profit adjustments on FX derivative
positions are excluded, although shown separately as "highlighted
items" to demonstrate the "underlying" position.
The Group is reporting a profit before tax in the period under
review after highlighted items, of GBP 11.4 m (FY 2021: GBP 15.3
m). Underlying earnings before interest, tax, depreciation and
amortisation were GBP14.2m (FY 2021: GBP14.0m).
Underlying basic earnings per share before highlighted items
amounted to 45.73p (FY 2021: 40.92 p). Diluted earnings per share,
on the same basis, were 44.77p (FY 2021: 40.37p).
Basic earnings per share after highlighted items were 46.37p (FY
2021: 56.86p). Diluted earnings per share, on the same basis, were
45.39p (FY 2021: 56.09p).
FINANCIAL POSITION, WORKING CAPITAL & CASH FLOW
The Group's net assets at 31 August 2022 totalled GBP 38.9 m (FY
2021: GBP 44.9 m), the reduction reflecting the GBP13.6m buyback of
approximately 10% of the Company's issued voting share capital
pursuant to the tender offer by the Company in the financial
period.
Inventories were c.GBP 15.3 m higher at the end of the financial
period at GBP 26.2 m (FY 2021 GBP 10.9 m), reflecting the Group's
policy this year of making our purchases early; this stock is
largely current product and should sell through.
During the period, the Group generated cash from operations of
GBP4.2m (FY 2021: GBP 27.3 m), which was impacted by the
substantially increased inventories held at the year-end. Net
interest charges on short-term use of working capital facilities
during the year amounted to GBP 0.2 m (FY 2021: GBP 0.1 m).
At the end of the financial year, the Group had a net cash
position of GBP20.0m, compared to GBP35.9m at the end of the 2021
comparative period, despite financing the GBP13.6m tender offer
buyback.
DIVID
The Board remains committed to maintaining a progressive
dividend policy. Accordingly, the Directors will be recommending to
shareholders a final dividend of 10.0p (2021 H2: 9.0 p per share).
This, together with the interim dividend of 7.0 p per share paid in
July 2022, will bring the total dividend for the year to 17.0p per
share (FY 2021: 1 5.0 p), an increase of 13.3%. The total dividend
for the year is covered approximately 2.7 times by underlying
annual earnings (2021: 2.7 times).
Subject to approval by shareholders at the Annual General
Meeting ("AGM") at 11am on Friday, 20 January 2023, the following
timetable will apply for this dividend:
Event Date
Ex-dividend date 12 January 2023
----------------
Record date 13 January 2023
----------------
Payment date 27 January 2023
----------------
OUR PRODUCT PORTFOLIO
The strength of our brands and products portfolio has enabled us
to significantly increase sales at a time when margins have come
under intense pressure. The notable performers during the year
under review were Goo Jit Zu (our star product range which is being
distributed in over 40 territories and continues to maintain a
strong presence), Chill Factor (the brand acquired in 2021 which we
have reinvigorated and which has significantly increased its
domestic and international penetration), Weebles (the " wibbly
wobbly fun" concept that has proved to have lasting consumer appeal
and now features in our Peppa Pig , Bluey , Cocomelon and My Little
Pony licensed product ranges), Cra-Z-Art Shimmer 'n Sparkle (the
popular ranges of play makeup, nail bar, body art and beauty
products and accessories) and Peppa Pig (our range of toys
developed through our continued and valued collaboration with
Hasbro).
Once again, in November 2022 we featured in the Toy Retailers
Association's prestigious "DreamToys", which showcases the most
sought-after toy categories in the UK for Christmas 2022. We were
delighted that the 'Top 12 list' included two of our products,
namely Heroes of Goo Jit Zu and Jiggly Pets Gigi the Giraffe .
A number of exciting new brand concepts, additions and
extensions, including of our own brands, will be added to our
offering and unveiled during the London Toy Fair in January 2023
and through to Spring next year.
The Group's current portfolio of products and brands can be
viewed at www.character-online.com .
PROXY
The Scandinavian markets have been subjected to very similar
conditions to our domestic market in the UK and the strength of the
US Dollar in particular resulted in a broadly comparable outcome
for the Group's Scandinavian operations to that of the previous
year. The integration of Proxy into the Group has continued with a
large degree of alignment in the product listings, processes and
procedures being achieved during the year under review.
It is encouraging to report that two of Proxy's hero products,
the Pokémon toy products range from Jazwares and the extensive
range of Funko collectable Pop! figurines, have sold well in the
Scandinavian territories and continue to be solid brands .
SHARE BUY-BACK PROGRAMME
In the period under review, the Company acquired for
cancellation a total of 2,142,572 ordinary shares in the Company at
an aggregate cost of GBP13.5m (excluding associated costs) and a
cost of GBP6.30 per ordinary share (FY 2021: nil). This buyback was
made pursuant to a tender offer issued on behalf of the Company on
28 January 2022 and completed in February 2022. The Company
currently has a remaining authority to buy-back up to a further
1,057,428 ordinary shares under the authority granted at the AGM in
January 2022, which authority will expire at the 2023 AGM.
It remains part of the Group's overall strategy to continue to
repurchase the Company's own shares, when considered appropriate.
The Board believes that it is in the Company's and all investors'
interests to provide shareholders who wish to realise part or all
of their investment in the Company with an opportunity to access
liquidity that is not otherwise available in the market and to
return excess capital to shareholders. Therefore, the Board will be
seeking a new authority to buy back up to 2,890,000 ordinary shares
(constituting approximately 15% of the total voting rights in the
Company) at the 2023 AGM. This authority will also allow the
Company to implement buybacks either by way of an announced buyback
programme or by way of further tenders for its issued shares. In
line with the Board's buyback strategy, the Company will continue
to repurchase the Company's own shares as and when considered
appropriate. Details of any intention to exercise this authority
will be announced and any tender proposal(s) will be fully
communicated to shareholders if and when the Board resolves to
implement such arrangements.
TOTAL VOTING RIGHTS
As at today's date, the Company has 21,465,929 ordinary shares
in issue, excluding shares held in treasury. The Company holds
2,149,477 ordinary shares in treasury, representing approximately
10.0 per cent. of the issued share capital, which do not carry
voting or dividend rights. Therefore, the total number of voting
rights in the Company is 19,316,452 . This figure of 19,316,452 may
be used by shareholders as the denominator for the calculations by
which they may determine if they are required to notify their
interest, or change to their notified interest, in the Company
under the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
OUR PEOPLE
The Group employs approximately 216 permanent staff across its
locations in the UK, Scandinavia and Asia (FY 2021: 209),
supplemented by additional seasonal labour at its warehouses in
Oldham during peak demand periods. The longevity of staff
employment with the Group, many with over 15 years' service,
demonstrates the bond and loyalty that many of them feel towards
their colleagues and the Group as a whole.
On behalf of our shareholders, the Board pays tribute to and
thanks all our personnel for their dedication and hard work in
delivering the results for the year under review and for their
continued support.
THE BOARD
The Board was delighted to announce the appointment of Jonathan
Shearman as an additional independent, non-executive director in
June 2022. Jonathan has been appointed to all of the Board's
committees and to the Chair of the Board's Remuneration Committee
and has already had a positive impact on the Company's
governance.
David Harris, who joined us in 2004 and is the longest serving
non-executive director, has notified the Board that he wishes to
retire and therefore he will not be offering himself for
re-election at our AGM in January 2023. On behalf of all
shareholders and staff around the business, the Board thanks David
for his valued service and wise counsel over the years; we wish him
all the best for the future.
As announced in June 2022, Mike Hyde, the Managing Director of
the Group's Far East operations, will be relinquishing his
executive role from 31 December 2022 to pursue other challenges. He
will, however, remain on the Board in a non-executive capacity from
1 January 2023. We have greatly appreciated Mike's contributions
over the years. Since July this year, he has worked closely with
the general manager appointed to replace him , to ensure an orderly
transition of responsibilities.
THE 2023 ANNUAL GENERAL MEETING (AGM)
The Company's 2023 AGM will take place as an in-person meeting
at 11:00 a.m. on Friday, 20 January 2023. The Meeting is to be held
at the Group's head office in New Malden, Surrey and the formal
notice of the meeting is set out in the Audited Annual Report and
Accounts. Explanatory notes in relation to the resolutions to be
proposed at the AGM are set out at the end of the notice of meeting
. Attendance can be in person or by proxy or, in the case of a
company or organisation, by appointment of a corporate
representative.
The Company is providing facilities which will enable
shareholders to:
- view the live meeting electronically. If you wish to attend in this fashion, please email info@charactergroup.plc.uk (stating "Character Group: 2023 AGM virtual attendance" in the subject line of the email) by 11:00 a.m. on Wednesday, 18 January 2023 to ensure the issue to you of a Microsoft Teams invitation. Invitations enabling remote attendance will be issued by 6:00 p.m. on 19 January 2023. Please note, however, that joining remotely will not constitute attendance at the meeting for the purposes of being counted in the quorum for the AGM and that virtual attendees will not be able to vote at the AGM. Shareholders wishing to attend the meeting virtually in this fashion are, therefore, requested to exercise their votes by submitting their forms of proxy appointing the Chair of the AGM as their proxy, in accordance with the instructions set out in the notice of meeting by no later than 11:00 a.m. on 18 January 2023. If the Chair of the AGM is appointed as proxy to a shareholder, he will vote in accordance with any instructions given to him. If the Chair of the meeting is given discretion as to how to vote, he will vote in favour of each of the resolutions to be proposed at the AGM; and
- submit written questions prior to the AGM. Any shareholder
that wishes to put questions to the Board is invited to submit
those questions in writing in advance of the meeting by sending
them to info@charactergroup.plc.uk (stating "Character Group: 2023
AGM Questions" in the subject line of the email) by 11:00 a.m. on
18 January 2023. The Board will seek to respond to questions which
are put forward in this way either in advance of the AGM, during
the AGM and/or by publishing written responses on the Company's
website after the AGM, together with results of voting. Although it
will be possible to take questions during the course of the meeting
itself, time may not permit responses to all of the questions to be
given at the meeting and, in those circumstances, written responses
will be published on the Company's website after the meeting.
OUTLOOK
As we anticipated at the time of the update in October 2022,
trading conditions have become more challenging and sales have
slowed in the lead up to Christmas. Whilst this has been a trend in
both our domestic markets and in our other major international
markets, the effect has been particularly discernible in the USA.
In addition, the weakening of sterling in September and October
2022 has continued to squeeze margins in our domestic markets.
These factors will adversely affect the Group's performance in the
first half of the current financial year. The slow-down in sales
means the Group's stock levels remain unseasonably high but the
Board expects these will sell through as it is largely current
inventory.
The Group has a strong product offering for its markets going
into 2023. The recent previews and presentations of our 2023 ranges
and new additions to our retail and distribution customers have
been very well received by customers. The new ranges and additions
include:
- new products under our multi-territory Stretch Armstrong
product range, including Star Wars and Transformers ;
- a line of Teenage Mutant Ninja Turtles products from Playmates
International for domestic distribution in the UK and Ireland, to
coincide with a new Turtles movie to be released in the second
half; and
- the distribution of exciting toy ranges from Bonkers Toys
based on the Aphmau and Lanky Box brands established by two
influencer concepts that have generated large followings on social
media and created YouTube stars.
International sales, other than those to USA, are forecast to
grow significantly in the second half of the current financial
year. Although we expect domestic sales to be flat in the second
half, the substantial reductions in freight rates, which have now
returned to (if not reduced below) pre-pandemic levels, together
with reduced costs of production from factories in China and
strengthening of Sterling against the US Dollar from its recent low
point, should improve our margins. This is greatly heartening and
has given the Board considerable grounds for optimism for a second
half rebound.
Character Group has a strong balance sheet and is debt-free,
with cash and considerable unutilised working capital facilities.
The business continues to trade satisfactorily and shall be
profitable for the financial year as a whole. The Board is,
accordingly, committed to maintaining its progressive dividend
policy.
The Board looks forward to further updating shareholders at the
time of its forthcoming AGM on the outcome of the 2022 Christmas
trading period.
22 December 2022
GROUP INCOME STATEMENT
for the year ended 31 August 2022
--------------------------------------------------------------------------------------------------------------------
12 months 12 months
ended ended
31 August 12 months 12 months 31 August 12 months 12 months
2022 ended ended 2021 ended ended
Result 31 August 31 August Result 31 August 31 August
before 2022 2022 before 2021 2021
highlighted highlighted Statutory highlighted highlighted Statutory
items items Result items items Result
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Revenue 1 176,402 - 176,402 139,997 - 139,997
Cost of sales (135,036) - (135,036) (99,553) - (99,553)
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Gross profit 41,366 - 41,366 40,444 - 40,444
Other income 502 - 502 332 - 332
Selling and
distribution
expenses (8,260) - (8,260) (8,248) - (8,248)
Administrative
expenses (22,173) - (22,173) (21,301) - (21,301)
Profit on sale of
property - - - - 2,016 2,016
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Operating profit 2 11,435 - 11,435 11,227 2,016 13,243
Finance income 51 - 51 36 - 36
Finance costs (207) - (207) (113) - (113)
Changes in fair
value
of financial
instruments - 159 159 - 2,128 2,128
Profit before tax 11,279 159 11,438 11,150 4,144 15,294
Income tax (2,018) (30) (2,048) (2,353) (737) (3,090)
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Profit for the
period 9,261 129 9,390 8,797 3,407 12,204
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Attributable to:
Owners of the parent 9,390 12,156
Non-controlling
interest - 48
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Profit for the
period 9,390 12,204
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Earnings per share
before
highlighted items
(pence)
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Basic earnings per
share 3 45.73p 40.92p
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Diluted earnings per
share 3 44.77p 40.37p
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Earnings per share
after
highlighted items
(pence)
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Basic earnings per
share 3 46.37p 56.86p
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Diluted earnings per
share 3 45.39p 56.09p
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
Dividend per share
(pence) 4 16.0p 9.0p
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
EBITDA
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
(earnings before
interest,
tax, depreciation,
amortisation
and gain on
property
disposal) 14,195 14,036
--------------------- ----- ------------- -------------- ----------- ------------- -------------- -----------
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 August 2022
--------------------------------------------------------------------------
Total Total
2022 2021
GBP000's GBP000's
------------------------------------------------ ---------- ----------
Profit for the year after tax 9,390 12,204
-------------------------------------------------- ---------- ----------
Items that may be reclassified subsequently
to profit and loss
Exchange differences on translation of foreign
operations 1,070 -
Income tax on exchange differences 21 7
------------------------------------------------- ---------- ----------
Other comprehensive income/(expense) for
the year, net of income tax 1,091 7
------------------------------------------------- ---------- ----------
Total comprehensive income for the year 10,481 12,211
-------------------------------------------------- ---------- ----------
Total comprehensive income for the year
attributable to:
Equity holders of the parent 10,481 12,163
Non-controlling interest - 48
-------------------------------------------------- ---------- ----------
10,481 12,211
------------------------------------------------ ---------- ----------
GROUP BALANCE SHEET
as at 31 August 2022
------------------------------------------------------------------------
2022 2021
GBP000's GBP000's
---------------------------------------------- ---------- ----------
Non - current assets
Intangible assets 1,963 1,806
Investment property 1,453 1,519
Property, plant and equipment 9,307 8,230
Right of use assets 1,216 1,454
Deferred tax assets 542 243
------------------------------------------------ ---------- ----------
14,481 13,252
---------------------------------------------- ---------- ----------
Current assets
Inventories 26,173 10,893
Trade and other receivables 24,728 26,019
Current income tax receivable 576 766
Derivative financial instruments 412 75
Cash and cash equivalents 26,646 35,920
----------------------------------------------- ---------- ----------
78,535 73,673
---------------------------------------------- ---------- ----------
Current liabilities
Short-term borrowings (6,627) -
Trade and other payables (42,151) (38,390)
Lease Liabilities (577) (557)
Income tax (3,345) (1,610)
Derivative financial instruments (343) (165)
(53,043) (40,722)
---------------------------------------------- ---------- ----------
Net current assets 25,492 32,951
------------------------------------------------ ---------- ----------
Non-current liabilities
Deferred tax (427) (405)
Lease liabilities (648) (946)
------------------------------------------------ ---------- ----------
(1,075) (1,351)
---------------------------------------------- ---------- ----------
Net assets 38,898 44,852
------------------------------------------------ ---------- ----------
Equity
Called up share capital 1,074 1,181
Shares held in treasury (1,813) (1,870)
Capital redemption reserve 1,883 1,776
Share-based payment reserve 3,957 3,749
Share premium account 17,566 17,324
Merger reserve 651 651
Translation reserve 1,950 767
Profit and loss account 13,630 21,274
------------------------------------------------ ---------- ----------
Attributable to equity holders of the parent 38,898 44,852
------------------------------------------------ ---------- ----------
Total equity 38,898 44,852
------------------------------------------------ ---------- ----------
GROUP CASH FLOW STATEMENT
as at 31 August 2022
Group
2022 2021
GBP000's GBP000's
---------------------------------------------- ------------------------------ -----------------------
Cash flow from operating activities
Profit before taxation for the year after
highlighted items 11,438 15,294
----------------------------------------------- ------------------------------ -----------------------
Adjustments for:
Depreciation of property, plant and equipment 556 567
Depreciation of investment property 66 65
Depreciation of right of use assets 632 556
Amortisation of intangible assets 1,509 1,621
Write off plant and equipment - 132
(Profit) on disposal of property, plant and
equipment (3) (2,028)
Net interest expense 156 77
Financial instruments fair value adjustments (159) (2,128)
Share-based payments 208 380
(Increase)/decrease in inventories (15,280) 3,853
Decrease / (increase) in trade and other
receivables 1,291 (3,006)
Increase in trade and other creditors 3,761 11,957
----------------------------------------------- ------------------------------ -----------------------
Cash generated/(utilised) from operations 4,175 27,340
----------------------------------------------- ------------------------------ -----------------------
Finance income 51 36
Finance expense (207) (113)
Income tax paid (401) (1,788)
----------------------------------------------- ------------------------------ -----------------------
Net cash inflow/(outflow) from operating
activities 3,618 25,475
----------------------------------------------- ------------------------------ -----------------------
Cash flows from investing activities
Purchase of business - (945)
Payments for intangible assets (1,666) (1,615)
Payments for property, plant and equipment (1,845) (7,128)
Proceeds from disposal of property, plant
and equipment 225 3,458
Net cash outflow from investing activities (3,286) (6,230)
----------------------------------------------- ------------------------------ -----------------------
Cash flows from financing activities
Payment of lease liabilities (538) (606)
Proceeds from issue of share capital 299 -
Purchase of own shares for cancellation (13,640) -
Dividends paid (3,280) (1,924)
Net cash used in financing activities (17,159) (2,530)
----------------------------------------------- ------------------------------ -----------------------
Net (decrease)/increase in cash and cash
equivalents (16,827) 16,715
Cash, cash equivalents and borrowings at
the beginning of the year 35,920 19,124
Effects of exchange rate movements 926 81
----------------------------------------------- ------------------------------ -----------------------
Cash, cash equivalents and borrowings at
the end of the year 20,019 35,920
----------------------------------------------- ------------------------------ -----------------------
Cash, cash equivalents and borrowings consist of:
Cash and cash equivalents 26,646 35,920
Total borrowings (6,627) -
------------------------------------------ ------- ------
Cash, cash equivalents and borrowings at
the end of the year 20,019 35,920
------------------------------------------ ------- ------
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 31 August 2022
----------------------------------------------------------------------------------------------------------------------------------------------
Shares Profit
Called held Capital Share Share-based and Non-controlling
up share in redemption premium Merger payment Translation loss interest
capital treasury reserve account reserve reserve reserve account GBP000's Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
------------- --------- --------- ----------- --------- --------- ------------ ------------- --------- ----------------- ----------
The Group
At 1
September
2020 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
============== ========= ========= =========== ========= ========= ============ ============= ========= ================= ==========
Other comprehensive income/(expense)
Net exchange
differences
on
translation
of
foreign
operations - - - - - - 40 (28) (5) 7
Total other comprehensive expense 40 (28) (5) 7
------------------------------------------------------------------------------------- ------------- --------- ----------------- ----------
Total comprehensive income for the year 40 12,128 43 12,211
------------------------------------------------------------------------------------- ------------- --------- ----------------- ----------
Transactions with owners, recorded directly in equity
Change in non
controlling
interest - - - - - - - (300) 300 -
Share-based
payment - - - - - 380 - - - 380
Deferred tax
debit
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
year after
tax 9,390 9,390
============== ========= ========= =========== ========= ========= ============ ============= ========= ================= ==========
Other comprehensive income/(expense)
Net exchange
differences
on
translation
of
foreign
operations - - - - - - 1,183 (92) - 1,091
Total other comprehensive expense 1,183 (92) - 1,091
------------------------------------------------------------------------------------- ------------- --------- ----------------- ----------
Total comprehensive income for the year 1,183 9,298 - 10,481
------------------------------------------------------------------------------------- ------------- --------- ----------------- ----------
Transactions with owners, recorded directly in equity
Share-based
payment - - - - - 208 - - - 208
Current tax
credit
relating to
exercised
share
options - - - - - - - 18 - 18
Deferred tax
debit
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 1,074 (1,813) 1,883 17,566 651 3,957 1,950 13,630 - 38,898
-------------- --------- --------- ----------- --------- --------- ------------ ------------- --------- ----------------- ----------
The financial statements were approved by the Board of Directors
on 21 December 2022, and were signed on its behalf by:
J J Diver K P Shah
Joint Managing Joint Managing Director and Group
Director Finance Director
NOTES
1. GEOGRAPHICAL DESTINATION OF REVENUE
31 August 31 August
2022 2021
GBP000's GBP000's
------------------- ---------- ----------
United Kingdom 84,605 79,509
Rest of the world 91,797 60,488
---------------------- ---------- ----------
Total Group 176,402 139,997
---------------------- ---------- ----------
2. EXPENSES BY NATURE - Group
12 months 12 months
to to
31 August 31 August
2022 2021
GBP000's GBP000's
------------------- ----------------------------------------- --- ----------- -----------
Operating profit is stated after charging/(crediting):
Cost of inventories recognised as an expense
(included in cost of sales) 117,586 88,729
========================================================== ====== =========== ===========
Product development costs incurred 1,957 1,736
Product development costs capitalised (1,666) (1,615)
Amortisation of capitalised product development
costs 1,489 1,619
========================================================== ====== =========== ===========
Product development costs expensed to
cost of sales 1,780 1,740
========================================================== ====== =========== ===========
( Credit)/debit financial instruments
fair value adjustments (159) (2,218)
Inventories debit / (credit) 634 (1,022)
Exchange losses 2,406 130
Staff costs 15,171 13,958
Depreciation of tangible fixed assets
- owned assets 556 567
Depreciation of investment property 66 65
(Profit)/loss on disposal of property,
plant and equipment (3) (2,028)
Depreciation - right of use assets 632 556
Auditor's remuneration 160 141
-------------------------------------------------------------- --- ----------- -----------
3. Earnings per share - group
The earnings used in the calculation of basic and diluted
earnings per share are as follows:
Year ended Year ended
31 August 31 August
2022 2021
Profit after Profit after
taxation taxation
GBP GBP
------------------------------------------------ -------------- --------------
Profit attributable to equity shareholders of
the parent 9,390,000 12,156,000
------------------------------------------------ -------------- --------------
Financial instruments fair value adjustments
net of tax (129,000) (1,724,000)
------------------------------------------------ -------------- --------------
Profit on sale of property net of tax - (1,683,000)
------------------------------------------------ -------------- --------------
Profit for adjusted earnings per share 9,261,000 8,749,000
------------------------------------------------ -------------- --------------
Weighted average number of ordinary shares in
issue during the year - basic 20,251,532 21,379,781
Weighted average number of dilutive potential
ordinary shares 436,409 291,974
------------------------------------------------ -------------- --------------
Weighted average number of ordinary shares for
diluted earnings per share 20,687,941 21,671,755
------------------------------------------------ -------------- --------------
Earnings per share before highlighted items
Basic earnings per share (pence) 45.73p 40.92p
------------------------------------------------ -------------- --------------
Diluted earnings per share (pence) 44.77p 40.37p
------------------------------------------------ -------------- --------------
Earnings per share after highlighted items
Basic earnings per share (pence) 46.37p 56.86p
------------------------------------------------ -------------- --------------
Diluted earnings per share (pence) 45.39p 56.09p
------------------------------------------------ -------------- --------------
4. DIVIDEND - group
12 months 12 months
to to
31 August 31 August
2022 2021
GBP000's GBP000's
---------------------------------------------------- ----------- -----------
On equity shares:
Final dividend paid for the year ended 31 August
2021
9.0 pence (2020: 3.0 pence) per share 1,929 642
Interim dividend paid for the year ended 31 August
2022
7.0 pence (2021: 6.0 pence) per share 1,351 1,282
---------------------------------------------------- ----------- -----------
16.0 pence (2021: 9.0 pence) per share 3,280 1,924
---------------------------------------------------- ----------- -----------
The directors recommend a final dividend of 10.0 pence per share
(2021: 9.00 pence) amounting to GBP1,930,745(2021: GBP1,924,000).
If approved by shareholders, the final dividend will be paid on 27
January 2023 to shareholders on the register on 13 January
2023.
5. ANNUAL REPORT AND ACCOUNTS
=================================================================================
The financial information set out in the announcement does not constitute
the Company's statutory accounts for the years ended 31 August 2022
and 2021. The financial information for the year ended 31 August 2021
is derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The financial information
for the year ended 31 August 2022 is derived from the statutory accounts
for that year and those accounts have today been published and may
be viewed and/or downloaded from the Company's website at www.thecharacter.com.
The auditors reported on each of those accounts: their report was
unqualified, did not draw attention to any matters by way of emphasis
and did not contain a statement under s498(2) or (3) of the Companies
Act 2006. The audited statutory accounts for the year ended 31 August
2022 will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
6. ANNUAL GENERAL MEETING
=========================================================================
The Annual General Meeting will be held at 2(nd) Floor, 86-88 Coombe
Road, New Malden, Surrey KT3 4QS on Friday, 20 January 2023 at 11.00am.
7. ELECTRONIC COMMUNICATIONS
===============================================================================
The full Financial Statements for the year ended 31 August 2022, incorporating
the Notice of Meeting convening the Company's 2023 Annual General
Meeting, is available for viewing on and download from the Group's
website: www.character.com
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END
FR PPGACPUPPUCP
(END) Dow Jones Newswires
December 22, 2022 02:00 ET (07:00 GMT)
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