“Challenging trading” has affected trading in the festive season and will hit performance in the first months of its new financial year, the AIM-listed toymaker said in its annual results statement.
The second half is expected to see better sales on the back of new lines featuring licenced-in brands such as Peppa Pig, Teletubbies and Scooby-Doo, scheduled to launch from January through to early summer.
Character Group, which also expects the new year to see a “significant” increase in international sales, had already flagged the lower full-year profit in a warning in September, where the company cited a sales vacuum in the Scandinavian market caused by the liquidation of Top Toy, the region’s largest toy retailer, and the continued political uncertainty in the UK.
For the year to 31 August, pre-tax profit was reported down 4% to £11.1mln even though revenue increased 12% to £120.4mln.
The final dividend proposed is 13p, 8.3% higher than last year despite net cash more than halving to £6.5mln.
“The strength of the portfolio of brands and products that Character is taking into 2020 greatly underpins our confidence that we will achieve market expectations for the current financial year,” the company said.
Shares dropped 6% to 390p on Wednesday.