Character Group PLC (LON:CCT) is set to raise a warning flag at its annual general meeting (AGM) on Friday.
The toys maker released a trading update ahead of the AGM in which it revealed results for the first half of the current financial year will be weaker than in the previous year.
In the four months to December 2016, sales were marginally lower than the same period last year and, as expected, UK gross margin was adversely affected by the devaluation of sterling,” the group's statement said.
The group said that the steps taken to mitigate the reduction in margin are currently starting to take effect and will be fully implemented in the second half of the financial year.
“We are expecting both our international and domestic sales to grow in the remainder of the financial year,” the group said, as it reassured investors that it is confident it can meet the market's full-year expectations.
The Peppa Pig, Teletubbies and Scooby Doo toys and assorted paraphernalia maker said its balance sheet continues to strengthen, and it pledged to up the dividend again this year.
The reaction to its 2017 product ranges and marketing plans has been excellent, Character claimed.