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The Character Group results beat expectations

Published: 07:22 01 Dec 2015 EST

peppapigtoy
The toy maker remains confident in its ‘cornerstone’ brands like Peppa Pig

The Character Group (LON:CCT) has unveiled a set of expectation-beating financial results for the twelve months to August 31 2015.

The maker of toys and merchandise based on licensed brands had revenue of £99.05mln for the year, up 1.2% from 2014, though more notably pre-tax profit increased by just over 72% to £12.27mln.

Earnings (EBITDA) rose 42% and the group revealed that cash generation more than doubled to £18.25mln in 2015 from £8.46mln in the preceding year.

"The profit before tax in 2015 is ahead of results previously anticipated and we are pleased to report that current trading remains encouraging and in line with management expectations," said executive chairman Richard King.

King added that new ranges coming to market in the current year are “very exciting” and he highlighted that the company had already seen positive feedback from customers and the trade media.

“We are confident that the cornerstone brands and the new season's ranges will deliver in terms of demand and sales at consumer level across both our UK and international markets,” he said.

“At this stage we believe that our underlying performance should be able to deliver another year of solid progress."

Panmure Gordon analyst Peter Smedley called it “another positive profits surprise” and highlighted that at £12.27mln the pre-tax profit was 12% better than expected.

Looking ahead to next year, Smedley also highlighted that an anticipated global relaunch of the Teletubbies TV show could prove to be “a game changer” for the company in 2016.

He added that despite a substantial out-performance, the share is up 142% versus the FTSE All Share index, there are still further share price drivers for the company – including continued growth in the UK, greater expectations for Teletubbies merchandise, and the company’s “potential and ability” for further positive earnings surprises.

Panmure repeated a ‘buy’ recommendation and lifted its target price to 635p, which compares to a share price of 492p this morning.

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