License/Trading Update

Character Group PLC
25 September 2002


Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: Wednesday, 25 September 2002     IMMEDIATE RELEASE



                            The Character Group plc


  • Licensing agreement with Polaroid extended

  • Trading Update

  • Group's Ready Steady Cook Popcorn Maker predicted by The British
    Association of Toy Retailers to be one of the top 10 best selling toys for
    Christmas


The Character Group plc ('Group' or 'Character') is pleased to announce that
World Wide Licenses Limited ('WWL'), the Group's Hong Kong subsidiary which
incorporates its digital division, yesterday signed a further license agreement
with Polaroid Corporation Inc. ('Polaroid').

In July, WWL signed its first license agreement with Polaroid to manufacture and
sell digital cameras in the USA and Canada.

The new agreement, which is for an initial term expiring on 31 December 2005,
gives WWL, when combined with the original agreement, exclusive rights to
manufacture and sell digital cameras under the Polaroid brand for distribution
on a worldwide basis, excluding Africa, the Middle East, China, and Central and
South America.

Commenting on this development, Richard King, Chairman said:

'It has, from the outset of our discussions with Polaroid, been our plan to
increase the distribution of Polaroid digital cameras to all the major world
markets, and this agreement marks a further significant step towards that goal.

'We believe that the Polaroid brand is one of the most recognised in the camera
market. Our expertise in this sector gained through our own-branded cameras
marketed under the Cool-iCam name, coupled with the Polaroid partnership will
give us significant advantage to exploit our well established position and grow
our digital imaging product portfolio in this rapidly growing market.

'Our first Polaroid model will go on sale to the consumer in early October in
the USA and we plan to introduce up to 20 new products under the Polaroid
license during 2003, all of which will be available for distribution to all our
territories.'

The new range of cameras is being unveiled today at the International Camera
Trade Show - Photokina in Cologne, Germany (25th September).

Trading Update

In the year ended 31 August 2002, the Group continued to focus on the
development of its product portfolio and although market conditions proved to be
challenging, with the poor summer weather hampering the sale of its summer
products, the Group has made good progress throughout the year. Trading results
for the financial year ended 31st August 2002 are expected to be in line with
market expectations.

Although it is still too early at this stage to give any financial indication
regarding Christmas trading, the Group is pleased to report that its new product
introductions have been generally well received by the market with many products
selling at or above forecast levels.

The Group's most notable success is the Ready Steady Cook wide range of
children's practical working cooking products which includes a popcorn maker,
oven and ice cream maker.


continued...


                                      -2-


Today, The British Association of Toy Retailers ('BATR') released its prediction
for the Top 10 best selling toys for the forthcoming Christmas sales period and
the Group is delighted that the Popcorn Maker within its Ready Steady Cook range
has been listed in BATR's Dream Toys 2002 Top 10.

Commenting on the success of the Ready Steady Cook range, Richard King,
Chairman, The Character Group said:

'We are delighted that this range has been so successful at the retail level
since its launch. We are currently all but sold out for the year, and will now
be supplying our customers on an allocation basis.'

'We are planning to introduce a number of new innovative and exciting additions
to the current range starting with a smoothie maker which will be launched at
retail just prior to Christmas. We believe that this range is quickly developing
into a core brand for the Group.'

In addition, the Board is pleased with the level of support that is being
achieved for the Group's Spring 2003 introductions.

The Board is very encouraged by the start to this new financial year and
believes that the Group should maintain this positive progress throughout the
year.


Enquiries:
Richard King (Chairman)                                   Fiona Tooley
Mobile: [phone]

Kiran Shah (Group Finance Director)                       Keith Gabriel
The Character Group plc                                   Citigate Dewe Rogerson
Tel: [phone]                                        Tel: [phone]
Mobile: [phone]                                      Mobile: [phone]

For Camera information:
www.polaroid-digital.com
www.cool-icam.com



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