Trading Statement

Character Group PLC
22 January 2003

Issued by Citigate Dewe Rogerson Limited, Birmingham
Date: Wednesday 22 January 2003

                                                   Embargoed: 7.00am


                            The Character Group plc
                                 Trading Update


At the Annual General Meeting (22 January) of The Character Group plc to be held
at 2pm today, Richard King, Chairman will make the following statement to
shareholders:

'In my statement included in the 2002 Annual Report & Accounts, I noted that
initial trading for the current financial year indicated that the improvement in
profitability would continue strongly throughout the year.  I am therefore
pleased to report that Christmas trading was at the top end of our expectations
and that Group turnover for the four months to the end of December 2002, was 28%
ahead of the comparative period last year. An improvement in both margins and
profitability was also achieved.

'We have entered the new calendar year with our stock levels not only under
tight control but reflecting a higher percentage of our 2004 product portfolio.

'Prospects look very encouraging and we expect to achieve an increased
contribution from all Divisions at both the half and full year.

TOY AND GAMES DIVISION

'Trading in this division was very satisfactory, with good sales being achieved
at planned prices together with a good sell through at retail.

'In comparison with the previous year, the Division had a much stronger and
improved range which sold well during this period. It is pleasing to see that
that many of these products will continue into this calendar year.

'We have successfully diversified into a number of different categories such as;
crafts, pre-school and cooking to complement, games, boys action, girls and
outdoor. The most notable of these has been our Ready Steady Cook line of
working kitchen products where, since May, we have shipped just under 1 million
units. We are forecasting further growth in this area for this year.

'We have also continued to increase the rate at which we are developing our own
products.

'In Games, Harry Potter was a major contributor, as was Lord of the Rings, but
the most pleasing development to note has been that our own developed games have
sold well both in the UK and internationally, and are set for growth this year.
We now have several of our own developed items being sold in the USA. A good
example would be, Electronic Pin The Tail on the Donkey which was launched in
the UK last year and will be distributed in the USA by Mattel this year.


continued...


                                      -2-

GIFT DIVISION

'The retail sales for gifts was very slow to pick up for Christmas but
nevertheless, we achieved a satisfactory result with the Ozzy Osbourne ranges
leading the way into the late lead up to Christmas.

'We have many new introductions which will be launched at the Birmingham Gift
Fair in February and we look for growth in both sales and profits for this
financial year.

DIGITAL PRODUCTS DIVISION

'There has been substantial development of this business over the past months
and whilst, the results were satisfactory in the period to Christmas, we did not
conclude our agreements with Polaroid early enough to be ready for substantial
sales in 2002, but we are now well positioned for expansion in 2003.

'WORLD WIDE LICENSES is today holding a Press and Trade launch of its line of
digital products for 2003 and we are confident that sales levels will be
substantially ahead this year. A copy of the Trade Release will be available
following the AGM today.

'Again, it is interesting to note that, in addition to building the Polaroid
range of digital cameras, we are building our own unique range of digital camera
products under our Cool-iCam brand.

'As stated earlier, the results for the Group to the end of December were at the
top end of our expectations and we look forward to a very satisfactory financial
year.

'Overall, we finished the calendar year with satisfactory stock levels, unused
bank facilities and in good shape for continued growth. Subject to our trading
for the remainder of the year continuing as planned, it would be our intention
to pay a final dividend for the year ending 31 August 2003.'


Note:

The Trade and Press Launch for the digital product range will be held at
Vinopolis, No.1 Bank End, London SE1 9BU - 7pm onwards - Admission strictly by
invitation.


Enquiries:
Richard King, Chairman
Kiran Shah, Finance Director                        Fiona Tooley, Director or Katie Dale, Manager
The Character Group plc                             Citigate Dewe Rogerson
Today: (mobile) 07836 250150 (RK)                   Today: (mobile) 07785 703523
Today: (mobile): 07956 278522 (KS)                  Thereafter: 0121 455 8370
Thereafter: 020 8949 5898


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