Chairman's Statement

Character Group PLC
24 January 2001


AGM Statement

 
At today's Annual General Meeting (24th January 2001), Richard King, Chairman
told shareholders: 
 
'I announced on the 5th December 2000 in the Group's preliminary statement of
results that the Group had started the financial year ahead of the comparable
period last year and also ahead of our own projections. However, as has been
shown by others in the retail market, the Christmas trading period did not
live up to general expectations and the final five weeks of sales proved to
be extremely disappointing. 
 
'Nevertheless, the Group has made major progress over the corresponding
period last year and, notwithstanding challenging trading conditions, is
still on course to be profitable for the financial year ending 31st August
2001. 
 
'An important contributory factor in this improvement is the implementation
of the restructuring announced on the 5th December which is ahead of
schedule. 
 
'The shortfall in December sales, together with the repayment and
cancellation of certain of the Group's borrowing facilities during 2000, has
led to the need for the Group to secure additional borrowing facilities in
order to finance current and projected sales. These facilities are expected
to be substantially in place within the next few weeks. 
 
'We are at the final stages of completing our product ranges for this
calendar year. I am extremely excited about several new products due to be
launched in 2001, and I am pleased to be able to mention some of them at this
time: 
 
'Firstly, we are all delighted to be able to tell you that 'NIGEL PICKED US'!
I refer of course to the ITV programme 'POPSTARS', where we have been
selected to produce the character dolls of the band and will launch them
shortly into the UK during the run of the highly successful TV series which
is currently being aired on Saturday evenings. 
 
'Other examples of new introductions are: a superb range of radio control
vehicles from Taiyo, intelligent interactive fashion dolls from Thinkway, and
outstanding ranges of robots from Trendmasters some of which can be empowered
from trading cards, which we are also distributing. 
 
'Another significant area of trade for 2001 is our digital camera and audio
range. Not only are we in a growth industry, but we are developing our own
product ranges under our 'Cool-icam' and 'Che-ez' brands. Additionally, we
are in negotiations to produce ranges of own branded products for substantial
and well-known companies. 
 
'We are introducing seven core products in 2001 as well as several additional
products specifically designed to match our customers' requirements. First
indications are that we are targeting the right consumer with most of our
products retailing for US$100 or less, yet nevertheless, containing many
features only available in models that are far more expensive. 
 
'We have built up our international distribution base for these products and
should enjoy substantial international growth this year. In addition to
continuing our successful sales campaign in Japan, we are now selling our
digital products into the US and Canadian markets directly from our Hong Kong
base and have already developed a strong order book which we have every
reason to believe will continue to grow throughout the year. 
 
'Our full range of 2001 toys plus our digital and stationery ranges will be
exhibited at the Toy Fair to be held at the end of January at the ExCel
Exhibition Centre in London. The rest of our product ranges including gifts
and watches will be shown at the Spring Fair in early February at the N.E.C.
in Birmingham. It is reassuring to be entering the year with a strong product
range that is targeted to a broader range of consumers, thereby giving the
Group the ability to maximise growth.  
 
'We should not make light of the difficult trading conditions that are
prevailing in the retail trade, however, we believe that we are making steady
progress in improving our product ranges, reducing overheads and improving
efficiencies within the Group infrastructure so that we are able to take
advantage of the many opportunities that continue to emerge.' 
 
 
 
Enquiries: 
Richard King, Chairman                           Fiona Tooley, Director 
Kiran Shah, Finance Director                     Citigate Dewe Rogerson 
The Character Group PLC                          Today:        020 7282 8000 
Today:       020 7282 8000 (up to 12.00noon)     Thereafter:   0121-631 2299 
Thereafter:  020 8949 5898                       Mobile:       [phone] 
Mobile:      [phone] (RK) 
             07956 278522 (KS)