Shares in Character Group PLC (AIM:CCT) plunged 8.0% after the company issued a profit warning for full year 2023.
The toy designer and developer said the sales momentum highlighted in its interims continued throughout the remainder of the year ended 31 August 2022, but warned that it anticipates its trading performance in the current year to end-August 2023 to be below the expected outcome for FY22 amid the current tough economic environment.
Character highlighted macroeconomic headwinds such as the weak pound and decreased consumer spending due to the cost-of-living crisis as factors behind the challenging trading conditions.
The company stressed that it is still trading profitably, has a strong balance sheet and is debt-free with good cash and considerable unutilised working capital facilities.
Despite the influence of adverse factors, including high freight rates and the increasing strength of the US dollar, the company expects underlying profit before tax and highlighted items for FY22 to be broadly in line with current market expectations.
Character said the focus in its new financial year has now shifted to the lead-up to Christmas, with FY22 results expected to be published in December.
Industry previews of new product ranges and introductions for the 2023 season have been well received by customers and prospective customers, the company said in a statement Tuesday.
Character added that it remains fully committed to maintaining its progressive dividend policy.