Character Group’s November Bindeez recall and weak Christmas trading have hindered its H1 performance.
The Group’s pre-tax profit for the first half of the year to February 29th dropped sharply, reaching £3.25 million compared to £7.03 million in 2007.
The firm reported revenues of £48.6 million against £56.2 million in 2007.
Bindeez sales were some £4 million lower than budgeted following the November recall, plus the firm had to account for associated costs of £1.9 million reducing its profit.
Moving forward, the firm is predicting its Hannah Montana licence, which it was awarded in January, will be “one of the hot properties for Christmas 2008” while its Postman Pat product range, for which it is master toy licensee for, will be in shops from January 2009.
“Trading is expected to remain tough and challenging throughout the year but, this being said, the Group has weathered the problems outlined in the interim report. We will continue to focus on costs and productivity and the Board remains optimistic at this stage that the business will see substantial revenue growth in the second half, when compared to the same period in 2007,” the Group said in a statement.
“On a further positive note, the Group has increased its market share during the first three months of the 2008 calendar year, which is indicative of the Group’s progress in a difficult trading environment.
“The Board remains optimistic that the business will be able to meet market expectations for the year as a whole.”