Trading Update

Character Group PLC
23 March 2007




Issued by Charles Stanley Securities, London

Date: 23 March 2007





                                                               Immediate Release



                            The Character Group plc

                                 Trading Update



The Character Group plc ('the Group') issues the following update ahead of
publication of the Group's Interim Results for the six months ended 28 February
2007, which are scheduled to be announced on Tuesday 24 April 2007.



Current Trading



As shareholders will be aware, the high street retailers have been reporting
very mixed trading conditions, however, this is not being reflected in the
Group's performance, which continues to strengthen.



Demand at retail for the Group's products at Christmas, particularly the Doctor
Who products (including the award winning Cyberman Voice Changer Helmet), was
very strong and the New Year has started well with a successful Toy Fair in
London, resulting in increased exposure and brand support by our major trading
partners.  This is expected to continue throughout the calendar year.



To date, Group sales and profitability in the continuing business are
substantially ahead of the same period last year. As a result and taking account
of the on-going strong demand for our continuing lines (such as the Doctor Who
products range) and our new introductions (such as Dragonfly, Bindees, and Movin
and Groovin Flowers), the Directors now expect that the Group will also
substantially exceed current market expectations for the financial year.



Matters relating to the Discontinued Digital Products business



Following the sale by the Company's subsidiary World Wide Licenses Limited
('WWL') of the Group's digital business in February 2006, two principal matters
remain unresolved.



Petters Consumer Electronics, LLC ('Petters'), a customer of WWL, has disputed
outstanding amounts due to WWL, totalling approximately US $1.6 million.
Proceedings have now been issued and served upon Petters seeking payment of the
full amount.





continued...


                                      -2-





Flextronics Sales & Marketing (A-P) Limited has failed to pay WWL approximately
US$1.8m, which was due to be paid on or before 22 February 2007.  Advice is
currently being sought by WWL from its legal advisers regarding its position and
it is WWL's intention vigorously to pursue payment of this debt.



The background to both of these matters appears to arise out of allegations made
against Polaroid Corporation of patent infringement in relation to certain of
the digital products produced by WWL.  Whilst Polaroid has intimated that it may
have a claim against WWL in respect of these allegations, no detail regarding
those claims has been provided to WWL and it has not been possible to make a
full assessment of them to date.



The above matters are not believed to have any material effect on the on-going
business of the Group, which continues to go from strength to strength.






Enquiries:
Richard King, Chairman                      Fiona Tooley, Director               Richard Thompson
Kiran Shah, Group Finance Director & Joint  Katie Dale, Senior Account Manager   Philip Davies
MD
The Character Group plc                     Citigate Dewe Rogerson               Charles Stanley Securities
Tel: [phone]                   Tel: [phone]            Tel: [phone]
Mobile: [phone] (RK)
Mobile: [phone] (KS)





Notes to Editors:

The Character Group plc designs, develops and distributes toys, games and
giftware, principally to the UK although it has an increasing exposure to
international markets.



Revenues are generated from a mix of product ranges, with over 70% designed and
developed in-house, either under the Group's own brand or under licence, with
the balance being derived from third party distribution.  Notable product lines
are Doctor Who, Scooby Doo, Biker Mice from Mars, Peppa Pig, GR8 Gear,
Robosapien, Roboraptor and Robopet.  For a more comprehensive view of the
product portfolio, please refer to www.characteronline.com.

www.thecharacter.com

CCT.L: Sector: Media, AIM


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