Licensed lines continue to lead the way at UK toy leader Character Group, with Peppa Pig, Teletubbies and its brand Stretch toys putting the company in a “strong position” at the end of its financial year.
Revenue of £106.2m and an operating profit of £11.7m, saw the company’s gross margin at 34.2 per cent with a pre-tax profit of £11.6m for the 12 months to 31 August 2018.
Those results are down on the previous year, when turnover of £115.3m delivered pre-tax profit of £13.4m, but the firm is happy with the outcome in a period of such upheaval for toy retail. A statement from the Character Group board says it is “delighted” with the results, which was in-line with its half-year projections, “comfortably achieving market expectations”.
It also offered an update on the past three months, the first quarter of its financial year, which it noted has “started well and in-line with management expectations”.
“We are confident in the prospects for the current autumn/winter trading period, which includes the all-important Christmas season,” it adds. “In addition, we are delighted to be working closely with the team at Proxy. We believe that there is considerable scope to progress with joint initiatives in product development and marketing with the Proxy team, which should enable us to increase further our respective current market shares in the financial year ending 31 August 2019 and beyond.”
Character’s core ranges, namely Peppa Pig, Little Live Pets, Teletubbies and Stretch, have remained in demand, and the company says refreshes and additions to the ranges throughout the year have been well received across the board, with sales continuing to grow.
Licensed toys will continue to be big business for the firm in the coming year, particularly in light of a new development with Proxy, a Danish toy firm it acquired 55 per cent of in October this year. Since completion on the purchase, Proxy has secured the exclusive distribution rights for Funko’s range, including its lucrative Fortnite collectable figures, for the Nordic region. It bolster’s Character’s in-roads into Europe and will go a long way to softening the impact of Brexit, however that shakes out.
“The potential implications of Brexit and the performance of the UK economy generally, will continue to dictate market behaviour in the coming months and our business is not immune from these factors. Notwithstanding this, the Board remains confident in its strategy and the Group’s flexibility to adapt to change and will continue to strive to grow the business, while facing any challenges as and when they arise,” the board adds.