24 March 2020 – trading update

The designer, developer and international distributor of branded toys, games and giftware has provided an update in light of recent developments regarding COVID-19 and the impact this will have.  Supply side operations in the Far East have experienced temporary disruption but have been broadly restored, with most factories now reporting a return to near normal production capabilities.  The demand side of the business, particularly in the UK, is being deeply impacted by closures of non-essential stores, shops and warehousing and distribution centres although some online retailer customers continue to place a modest level of orders.  A significant drop in revenue is anticipated but the company has a strong balance sheet and is debt-free, with a substantial cash balance and considerable unutilised working capital facilities.  The premises from which Character operates in the UK are freehold properties.  Interim results for the six months ended 29 February 2020 will be issued during the last week of May.  For now we rate the shares as a BUY.