Character Group

Character Group Dividend Analysis and Summary

• Final dividend: 3.0p per share (subject to AGM approval).
• Timetable: Ex-dividend date 15/01/2026; Record date 16/01/2026; Payment date 30/01/2026.
• Total FY25 dividend: 6.0p (vs 19.0p in FY24) — a material reduction.
• Dividend cover: ~0.9x on underlying EPS (5.59p); not covered on a statutory basis (loss per share of 6.74p).
• Approximate forward yield: ~2.3% (6.0p DPS on c. £47m market cap).
• Cash cost: final dividend c. £0.53m (based on 17,714,999 voting shares); FY25 cash dividends paid were £2.59m (11.0p FY24 final + 3.0p FY25 interim).

• Sustainability: The reset to 6.0p reflects weaker trading (underlying PBT £1.2m; statutory loss before tax £1.8m). Coverage of ~0.9x on underlying earnings is thin and leaves little buffer, though the Group retains net cash of £12.6m and generated £6.8m cash from operations, which helps underpin the payout in the near term.
• Growth trajectory: FY25 DPS is down ~68% year-on-year (19.0p to 6.0p), effectively resetting the base. Management guides to FY26 profit before tax (before highlighted items) to “more than double” off a low base; if delivered, this should improve cover and scope for gradual dividend growth from the new level.
• Capital allocation support: Despite weaker earnings, Character returned substantial capital via both dividends (£2.59m) and buybacks (~£1.96m in-year plus ~£0.84m post year-end), with only a small reduction in net cash. This signals confidence but also suggests the dividend will continue to be balanced alongside buybacks rather than prioritised for rapid growth.