Character Group – Competitive resource analysis

PUBLISHED: 27 Jan 2020 @ 23:20 | Comments (0) |

The last newsletter looked at the toy industry as a whole and concluded that there are sound reasons for the documented high returns on capital employed. But industry analysis is only the first step. We need to examine Character (LSE:CCT) to see if it has any extraordinary resources allowing it to sustain high rates of return on capital left in the business by shareholders.

Does Character own tangible resources providing a competitive edge?

The term tangible is stretched here to include assets such as trademarks, copyrights and exclusive rights to sell a franchised item (e.g. Dr Who figures) in a specified territory. Character has two categories of toys, (a) in-house developed products, and (b) TV/Film franchise characters.

In-house.

Blinger

Chillfactor

Cra-Z-Loom

Cra-Z-Sand

Cra-Z-Slimy

Shimmer ‘n Sparkle

Easy Nails/Tattoo/Wrap

Fizz ‘n’ Surprise

Foam Alive

FlipAZoo

Funatic Foam

Hairdooz

LaserX

Luvi Pups

Mine It

ORB Mocheez Babies

ORB Odditeez

OOnies

Orbeez

Zombie Blast

Smart Sketcher

Soft ‘n’ Slo Squishies

Swarm Squad

Treasure X

Zookiez Slappy

Franchises

Ballerina dancer

Ben & Holly

Chu Chu TV (YouTube Channel)

Disney Doorables

Dr Who

Fireman Sam

Mash’ems

Peppa Pig

Pokemon

Postman Pat

Teletubbies

Stretch Armstrong

Not sure whether in-house or licensed franchises

Goo Goo Galaxy

Heroes of Goo Jit Zu

Little Live Pets

Little Live Raptiles

Really RAD Robots

If the in-house developed toys take-off Character will benefit greatly because it does not have to pay royalties to the license holder, e.g. it did well out of slime a few years ago.

Once it has an exclusive license for a product such as Bob the Builder or Peppa Pig then good profits can flow due the character’s popularity. So, for a time, the Group has

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