Tariffs hit spreading beyond US, warns Character
By Abigail Townsend
Date: Friday 16 May 2025
(Sharecast News) - Shares in The Character Group came under pressure on Friday, after the toys firm trimmed its dividend and warned that orders worldwide were being impacted by Donald Trump's trade war.
The AIM-listed company - which designs and distributes toys and games, including Peppa Pig and Teenage Mutant Ninja Turtles - said revenues in the six months to 29 February had fallen 8% to £53m amid "harsh" trading conditions.
Pre-tax profits, excluding the impact of currency fluctuations, were flat at £2.1m, supported by a 2.1 basis point improvement in the gross margin.
However, Character slashed the dividend to 3.0p per share from 8.0p a year previously. It blamed the decision on the US president's sweeping tariff regime, which has already halted a number of shipments to the US.
Sales to the country accounted for around 20% of group revenues in 2024, and nearly all of those products were made in China.
Character, which has already withdrawn market guidance for the full-year, said: "The 90-day reduction in tariffs between US and China gives hope for a negotiated solution, although this remains uncertain at this time.
"The uncertainty flowing from the imposition of these tariffs has been felt in other parts of the world, as customers have become increasingly cautious and are not committing to orders to our expectations.
"This is impacting sales in all our key territories.
"Despite this, the board remains confident that the group will be profitable in the current financial year, although it is too early to forecast short-to-medium term trading at this juncture."
As at 1130 BST, shares in Character were down 8% at 235.0p.
Russ Mould, investment director at AJ Bell, said lower-than-expected orders from outside the US was "problematic, as [Character] has already halted shipments from China to the US, so it needs customers elsewhere in the world to pick up the slack.
"It sets the company up for a big earnings setback as the year goes on.
"Character is trying to stay optimistic and believes it will still turn in a full-year profit. However, if the tariff situation doesn't ease, Character will have to pull out every trick in the book to ensure that customers are still placing orders."
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