Trading Update

Character Group PLC
16 January 2008

Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Wednesday, 16 January 2008                            Embargoed 7.00am


                            The Character Group plc


The Board of The Character Group plc ('Group' or 'Character') provides the
following update to the market prior to the Annual General Meeting scheduled for
11.00am today, Wednesday 16 January 2008:


                                'BACK ON TRACK'


Trading Update
The Group, as a major UK toys and games supplier is not immune to the effects of
faltering consumer confidence and, as forecast in our statement on 17 December
2007, trading to Christmas was disappointing as a result of both the poor and
well publicised retail trading environment as well as the lost sales and cost of
the recall of Bindeez product.

The Group has weathered these problems and, despite the poor trading results
expected for the first half of the current financial year, the Board anticipates
substantial revenue growth for the second half against the same period for 2007.

The Group has come through this difficult trading period with a strong balance
sheet and is today totally ungeared despite having bought back approximately 1.4
million Character shares in this financial year. The Group has the capacity for
further substantial buy-backs, if deemed appropriate by the Board, as well as
sufficient resources to fund further expansion.

The general reaction by our major customers to our new product portfolio has
been both positive and pleasing and we are looking forward to exhibiting at the
London Toy Fair later this month.

Despite acknowledging that trading conditions are likely to remain testing for
some time, we believe that we are now back on track and are looking for revenue
growth for the second half of the financial year and for the calendar year as a
whole. Accordingly, the Board is comfortable with the current market
expectations for the 2008 financial year.





Enquiries:
                                                   Fiona Tooley, Director
Kiran Shah, Group Finance Director & Joint MD      Keith Gabriel, Senior Account Manager
The Character Group plc                            Citigate Dewe Rogerson
Tel:     [phone]                      Tel:    [phone]
Mobile:  [phone] (KS)                  Mobile: [phone] (FMT)
www.thecharacter.com
www.character-online.co.uk


Richard Thompson
Philip Davies
Charles Stanley Securities
Nominated Adviser
Tel: [phone]




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