Summary of Interim Results

Character Group PLC
29 May 2001



Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: Tuesday, 29 May 2001     IMMEDIATE RELEASE


         The Character Group PLC ('Character Group' or 'the Company')

      Summary of interim results, trading update, refinancing proposals

                              and board changes


Summary of interim results to 28 February 2001

On the 24th January this year, it was announced that Christmas trading had
been disappointing. The difficult trading conditions for the Group have
continued and have contributed to a net loss before taxation for the interim
period ended 28 February 2001 of £1.9 million on sales of £36.6 million. It is
not therefore proposed to pay an interim dividend.

These results, whilst on the surface disappointing, nevertheless show a
substantial improvement on the corresponding figures for the same period last
year where, for the half year to 29 February 2000, the Group recorded a net
loss of £5.95 million on sales of £49 million.

Trading update

The Group, as a whole, has made steady progress through the year to date
albeit at a significantly slower pace than originally envisaged. It is
expected that the Group will continue to make progress in the second half of
this financial year. However, due to the difficult trading which has been
exacerbated by cash constraints caused in part by a reduction in the Group's
working capital facilities and the resultant delay in the introduction of new
product ranges, it is now expected that the Group will not make a profit for
the full year.

Refinancing proposals

Action is currently being taken to improve the Group's balance sheet which has
been severely weakened by the poor trading results over the past 18 months.
Toys Investment SA ('TISA'), which currently owns 15.0% of the Company's
issued share capital, has agreed to provide the Group with a short term loan
facility, on normal commercial terms, of £2.5 million. It is proposed that,
subject to shareholder approval, this loan will be substituted by a £4.6
million convertible loan. This loan is to be convertible within 3 years from
the date of issue at a price of 40p per share. TISA has undertaken not to
convert the loan and proposes to assign the loan to a third party investor
that is independent of the Directors and TISA at a later date.

The Company is also close to finalising the terms of a rights issue which will
be made at a significant discount to the current market price. It is intended
that the executive Directors and TISA (who, in aggregate, own approximately
51.6% of the shares in issue) will take up their rights in full. TISA has
agreed, in principle, to underwrite certain of the remainder of the rights
issue, such that TISA will own, in aggregate, not more than 29.9% of the
Company's issued share capital following the rights issue.


continued...

                                     -2-


Both the convertible loan and the rights issue are subject to the approval of
shareholders and it is expected that a circular setting out, inter alia, full
details of the refinancing proposals will be sent to shareholders by no later
than 15 June 2001.

Following completion of these refinancing proposals, the Directors believe
that the Group will be sufficiently capitalised to enable it to return to its
previous growth pattern.

Board Changes

Pursuant to the refinancing proposals outlined above, Enrico Preziosi,
Chairman of the Italian toy company Giochi Preziosi S.p.A and currently a
non-executive director of the Company, has agreed to become Chief Executive
Officer of Character Group. In addition, Maurizio Cellai, Managing Director of
Giochi Preziosi S.p.A, has agreed to join the Board of Character Group as a
non-executive director. Both of these appointments are to become effective
immediately.

Group prospects

Primarily due to the strength of the current product range, the Directors have
every reason to believe that trading for this coming Christmas season will be
substantially better than last year and this, combined with a significant
reduction in overheads, should enable the Group to improve its trading
performance over time.



29 May 2001

Enquiries:

Richard King, Chairman     Fiona Tooley, Director

Kiran Shah, Finance Director     Citigate Dewe Rogerson Ltd

The Character Group PLC     Tel: [phone]

Tel: [phone]     Mobile: [phone]

Mobile: [phone] (RK)

Mobile: [phone] (KS)