Profits hit by recall

A ONE-OFF £1.9 million hit on toy beads and £4 million in lost sales contributed to a disappointing year for toy distributor Character Options, which saw profits fall by more than half.

The business, which employs 100 people at its distribution depot at Leesbrook Mill, Lees, made pre-tax profits of £5.14 million in the year to August 31, compared with £12.56 million last time. The final dividend has been scrapped.

The Bindeez Beads range had to be recalled after some children who had swallowed them needed medical attention.

The group, which has its corporate headquarters at New Malden, Surrey, has best sellers including “Dr Who” and “High School Musical” toys in its range, but turnover still fell from £95 million to £82.3 million.

Chairman Richard King said: “We entered the 2008 financial year with confidence that we had developed a strong, innovative and exciting product portfolio.

“2008 began to present challenges outside of our control starting with a difficult trading environment at Christmas 2007 for most retailers and, concurrently, the early signs of a general deterioration of UK and global economies.

“The group’s progress was adversely affected by the Bindeez range recall, which cost £1.9 million in one-off costs as well as £4 million in lost sales. It was very disappointing that our sales declined markedly during the last quarter of the financial year as the economy rapidly declined further.”