The Character (AIM:CCT) Group, the London-listed designer and distributor of toys, games and giftware, said on Monday that full-year profit before tax and highlighted items will exceed current market expectations by approximately 20%.
The AIM-listed group said July and August trading was "very encouraging", with UK and Scandinavian sales trending higher even as international sales, particularly in the US, softened.
Having reversed the sales decline reported in the first half, full-year sales are now expected to be broadly in line with the prior year to 31 August 2025, while the gross margin improvement seen in the first half has been sustained through the second.
The company's interim results, reported in May, had already flagged an option linked to the letting of its Middleton, Lancashire warehouse that could yield a £9.8m cash sale; that sale completed in July, lifting cash reserves to more than £20m.
"Despite the current economic challenges, overall trading remains positive as we lead up to the Christmas 2026 season", the Board said, adding that product ranges are selling well with margins holding up.
The Board is now assessing capital requirements and the potential to return excess cash to shareholders, building on the 33% increase to the interim dividend and the ongoing £3m buyback programme disclosed at the half-year stage.
The Group will publish its audited annual report and accounts in December.