After a difficult trading year that has seen losses for CCT and the sp nose-dive to 25p at one point the solution to return to profits may come from the launch of electronic Sudoku games in time for Christmas. Character will launch two Carol Vorderman Sudoku products. For Sudoku fans on the move, there are two handy travel size products: a hand-held LCD game (19.99) with over 750 grids, and a touch screen version (29.99), with over 100,000 permutations of the game. A plug and play version, allowing addicts to play Sudoku on their home TV (29.99) will follow later this year. It won't take many sales to rack up good profits if these are anywhere near as addictive as the puzzle books have proved to be so far.
500,000 sold at guess 5 profit per item would rack up 2.5m, with less than 53m shares that is a healthy EPS of 4p on one item alone and my estimate is probably conservative? They also have licensing rights to Dr Who, Little Britain and Batman amongst others.
Also 70% of these shares are in the hands of Directors, Pension Trusts and Funds and as has been seen in recent weeks, moderate buying has pushed up the share price. It has all the hallmarks of a possible recovery stock as was IDS which I tipped last year at 81p and is now 382p. Not saying this will reach those heights but if Sudoku sells well this Christmas expect CCT to show a good start to their financial year. 2005 figures ending August 31st will not be good but we don't buy shares on the past, there is no gearing and 8m of shareholders funds available.
Take a look. The profits could be more pleasing than solving the puzzles.

The news hasnt really leaked out to the average punter yet and there is a shotage of stock holding the price back. This share should be flying top up if you can.

Some large end of the day buys, its looking good for tomorrow after press reports.

Thanks for the answers to my questions gentlemen. I have followed this stock for years as it is a good one to buy when shares are low, remember a few years back offered to shareholders at 20p - went up to 160p or so withen a year and a half. After yesterday and todays news it looks to me that we are on the way back to at least 100p. I also remember that last year after a profit warning, directors bought at roughly 58p if memory serves me correctly - I think they knew the good times were around the corner. Anyway lets hope for the best. Just in case anyones interested I am a total amateur so don't take a word as gospel.
All the best, hopefully it will be interesting.

Peadar10
We are all amateurs at the end of the day, gamblers, but this one looks a sure bet to me.

Not much time left to get on board sum 62p

A good buying opportunity at these prices IMO while the mms play their games.

True enough driver. More buys to sells and they wack
the price down. Way over done in my opinion.
Trying to shake the weak out should mark it back up
in the morning.

Did the recent announcement re sales increases get any press coverage. Disappointed price has not moved up rapidly. Still hoping that sp rise is only a matter of time.

Peadar10

Looks like there was a piece in the Guardian on the 11th of January.
Can't access full story got to pay a subscription.
Other than that I cannot find anything.

The toy that ate Christmas the Roboraptor

http://www.guardian.co.uk/christmas2005/story/0,,1672400,00.html#article_continue

Still time to top up before it takes of.

19/01/2006 LONDON (AFX) - Character Group PLC said a joint notification has been filed at Germany's Federal Cartel Office by Flextronics Sales and Marketing (A-P) Ltd and Character's subsidiary World Wide Licenses Ltd in accordance with German competition law and merger clearance procedures in respect of the possible acquisition by Flextronics of Character's digital products division.

Negotiations are continuing with Flextronics and shareholders will be updated in due course.

newsdesk@afxnews.com

CCT have sold the Digital business for US$16 million with some more to come a bit lower than some of us would have preferred but not a bad deal, it makes the M/Cap look small now for this company the sp should go up respectively.

Issued on behalf of The Character Group plc
Date: Wednesday, 25 January 2006
IMMEDIATE RELEASE
The Character Group plc
("Group" or "Company" or "Character")
Proposed sale of Character Group's Digital Division

Following the Group's announcements dated 9 January 2006 and 19 January 2006,
the Board of The Character Group plc announces that contracts have today been
exchanged with Flextronics Sales and Marketing (A-P) Limited ("Flextronics") for
the sale of the Group's Digital business, trading under the name World Wide
Licences Limited ("WWL").

The consideration for the Digital business is US$16 million for the goodwill and
an additional sum for the closing inventory, which will be determined on
completion of the transaction, which is expected to be in February 2006.

WWL, based in Hong Kong, is a wholly owned subsidiary of the Group and is
engaged in the design, development and manufacture of digital products, which
principally consist of digital cameras in addition to managing the Hong Kong and
Chinese logistics for the overall Group. The Group shall continue to have a
presence in Hong Kong which together with its new facilities in Shenzhen, China
will enable the Group to continue the growth of its Toys, Games and Gifts
business.

Commenting on the proposed sale of the Digital business, Richard King, Chairman
of the Group, said:

"The sale of the Digital business will allow the Group to focus entirely upon
the development of its toys, games and gifts business which has, and continues
to have, a number of very exciting opportunities to build on our strong
performance to last Christmas."

"The Directors also consider that a sale is a better option for the Group than a
de-merger, which was previously under consideration."

"The Board is confident that Flextronics is uniquely placed to develop the
digital business to a far higher level than Character could achieve in the same
timescale."

"The proposed sale of the Digital business is believed to be in the best
interests of the Group's shareholders but, as importantly, it gives more
opportunity and future development for the employees within WWL who have played
a significant role in developing the business to date."

"We are delighted that The Character Group plc has accepted our offer to
purchase its digital business" stated Peter Tan, President and Managing Director
of Flextronics Asia.

Mr Tan added: "WWL's talents will provide us with an exciting opportunity to
further enhance our capabilities that further support our penetration into the
consumer products market"

The proposed sale of the Digital business of WWL is subject to shareholder
approval. A Circular, containing full details of the proposed sale of the
Group's Digital business together with details of the EGM, will be posted to
shareholders shortly.

Starting to tick up about time.

Yep I agree some good discussions over on the other board.
Wicked how the mm's hold the price up all day stuff the man
on the street to sell then bang look at all the buying after the bell.
We got a mention in the FT today and the character team are at
the exel toy fair showing all the wonderfull new toys to the trade.
Should be a tick up tomorrow.

Hello all, correct me if I am wrong here, digital division sold for 9m, digital division accounts for 50% plus of turnover. Current market value 30m. Only looking at this would indicate that the company sp is overvalued. Does anyone know how profitable the digital division was compared to the toy/gift division? I am still hopeful that we could be heading for 1 sp in the short term (depending on company announcements re profits at Christmas (not turnover) but am naturally wary. Always like the roller coaster with this one.
Any advice would be appreciated

Peadar10
This post is courtesy of bubloo From another board this is his assessment (good post)

My Assessment
Sale going through in feb that is at the end of the first half. From their own rns sales up 60 % in comaprision to first half of 2004
So First half sales appro 43 x 60%= 25.8 + 43= 69 million for first half gpm at 23% ( I think it should be better )23% x69 = 15.87 million
Assume Selling and admin expenses are same as first half of 2004 i.e., 13mill Therefore pbt 2.87 million Tax at 30% .84 million Pat 2.03 eps 3.98 first half
stock at the end of the year aug 2005 was 9 million but that may now be say 6 million so say 3 million of digital to be paid for by flextronics
if you observe, the selling and admin expenses in the second half is always less than the first half i.e., selling 5.8 and admin 5.9. so in total second half expenses 11.7 but the expenses of wwl should be at least half of that, which would give expenses of about 6 million for toys and games
If the first half trend continues the toys bit should have sales of atleast 33million or more in second half let us take a conservative profit margin of 35% giving us op profit of 11.5 million minus expenses of 6to 7 million therefore pbt of 5 million in the second half
tax at 30 % 1.5 bmillion
gives a second half eps of 7 for a whole year eps of 11 hence the pe ratio is less than 6
cash at the end of the year
9.5 from sale of wwl +
3 miilion of stock +
cash at hand of about 3.75 million +
profit after tax of 5.5 million.

All these add up to 22 million
Market cap of 30 million

So essentially the company is valued at 8 million, with a potential of 60 million of sales yearly with a gpm of 35 to 40 % in toys and games equating to op profit of 21 to 24 million. Even if you consider that the selling and admin expenses for toys to be 60% of last year then expenses willbe around 14 million giving us a pbt of 7 to 10 million.

In summary the company is valued at 8 million and has a potential to make 8 million next year

I hope i am not going mad in my calculation here.

I think my estimates are in fact very conservative

I had discussed their statement below with the FD and he was of the opinion that it meant there will be a substantial boost to their bottom line hence I feel my estimates are conservative company statement during final results

Toys, Games and Gifts
During the financial year, we have accomplished our strategic plans of integrating firstly, Games and then Gifts within this Division, with the former being completed in the first half and the latter in the second half.

Although we have received a limited benefit from these changes in the latter part of the financial year being reported upon, we expect that there will be a more positive impact during the new financial year in terms of both efficiencies and costs.

Through this stronger and improved product offering, we anticipate that we will incur a lower percentage of credits and marketing spend in the current new financial year, with stock write-downs also expected to remain within the levels budgeted.

Interesting post indeed driver, does anybody know when we are likely to get next trading statement/results?

It looks like we got a good deal with pre tax profit of only $0.8m for WWL most of the 60% rise in turn over must be in the toy division, the selling today is the last of the shares being cleared out of ISAs and PEPs if punters hadnt transferred them by today they would have been sold.

I must admit i`m a bit gutted with the drop today as i could of sold this stock a few times at a profit and got back in.
It really is something that i didn`t think would happen ,i thought that given the good trading update ,sale of WWL and dividend this was on a pretty constant move up.
I`m still confident this will be a lot higher once results are announced.

66
You have to sit back and wait for this one its hard to trade because of the spread and it moves so rapidly, top up on the dips treble bagger IMO.