Thursday 23 November 2017 ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares


Character Group – Pokémon distributor appointment, still a buy

By Tom Winnifrith & Steve Moore | Saturday 9 September 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Just post its year ended 31st August, Character Group (CCT) said that it was pleased to announce its appointment as “the master toy distributor in United Kingdom and Ireland for the globally popular Pokémon brand”

The appointment agreement “will see action figures, playsets, plush, role play and other toys based on the hit Pokémon animated series, join Character's portfolio from summer 2018”, with this emphasised as an “iconic and powerhouse” addition to the company’s product line up.

In the meantime, we expect soon a year-end trading update to compare to current expectations for earnings per share of more than 50p (prior year: 47.63p) and a dividend per share of 17p (prior year: 15p, including 7p interim – this year that 9p per share paid on 28th July).

This update will follow lower interims, but which still showed net cash up to £18.6 million and “confidence on our ability to meet current market forecasts.

We tipped the shares at a 495p offer price late last year and they reached more than 540p earlier this year, before sliding back below 500p. However, the latest news has currently helped them back to 535p. This still though only suggests a (now historic) price/earnings multiple of little more than 10x and a more than 3% dividend yield.

With the expected future growth – earnings per share of circa 55p presently the forecast for the now current year, and now further Pokémon growth potential to follow, we continue to consider the fundamental and income value here attractive. We raise the limit buy price to 540p and the stance remains, at up to 545p, BUY.

This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tip from Tom & Steve shortly and a new shorting piece from Lucian next week click HERE


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