Peppa Pig toymaker slashes dividend as Trump tariffs squeeze sales
Character Group slashed its interim dividend on Friday as it warned investors uncertainty over the direction of US tariffs has impacted sales in 'all [its] key territories'.
The British toymaker, which manufactures Teletubbies toys and the largest range of Peppa Pig products, was forced to withdraw full-year profit guidance last month in the wake of Trump's 'liberation day' tariff announcements.
The New Malden-based group counts the UK and Scandinavia as its key markets, but US sales made up about 20 per cent of turnover last year.
It also mainly outsources its production operations to China in order to maintain competitive pricing.
Character saw revenues slip 8 per cent in the six months to 28 February to £53million, which it said reflected 'harsh trading conditions experienced in the lead up to and through the all-important Christmas period '.
However, it managed to boost gross margins to deliver a first half profit before tax and highlighted items of £2.1million, in line with the same time last year.
But Character declared an interim dividend of 3p per share, down from 8p at the same stage last year, and compared to a final dividend of 11p per share for 2024.
It said that while the recently announced 90-day reduction in tariffs between the US and China 'gives hope for a negotiated resolution', uncertainty remains.
The group added: '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 as a whole, although it is too early to forecast short to medium term trading at this juncture.'
Character also pointed to its strong balance sheet, which included no long term debt, cash and cash equivalents of £16million, and unutilised headroom of over £50m under its banking and other finance facilities.
Character Group shares sank 5 per cent to 242p in early trading. They are down by 11.7 per cent since the start of 2025.
It said: 'The group's performance in maintaining profits and cash flow in the first half year period reflects the strength, depth and quality of our current portfolio of products.
'Overall, despite the harsh trading conditions experienced in the lead up to and through the all-important Christmas period, the group's performance is testimony to the management's ability to read the market and produce and distribute products that capture the imagination of, and enable quality play by, the children that ultimately determine the success or failure of toy products.'
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