Market report: Eh-oh! Teletubbies seller Character Group is hit by turmoil at Toys R Us

It might be thousands of miles away but the City felt Toys R Us’s pain in the States today as shares in AIM-listed toy maker Character Group tumbled.

Despite a “solid finish” to its financial year, Character Group alerted investors that Toys R Us is “one of our major customers” and pointed out that it had filed for bankruptcy protection in the US.

“At this early stage, we do not know the extent to which this will impact our trading position with them both in the UK and internationally,” Character Group said in a statement to investors after the market closed yesterday.

The company, which makes toys for the Teletubbies and Pokémon, warned that it does not have “reliable visibility” on the crucial Christmas period, which investors feared could mean it misses targets for 2018.

The shares fell 34.45p, or 6.8%, today to 475.55p.

While traders waited for the Federal Reserve’s statement this evening, strong retail sales provided a little spice to proceedings.

The FTSE 100 dropped into the red after sterling’s subsequent spike as the index fell 21.01 points to 7254.24.

Sage, up 10.18p or 1.5% to 713.5p, was among the risers after JPMorgan Cazenove gave the accounting software giant a ringing endorsement.

The broker said the annual results for the year, which ends this month, “could be a catalyst to get the stock moving again”.

On the mid-cap index, Metro Bank slipped 123.23p, or 3.6%, to 3349p after Macquarie slapped an underperform rating on the challenger bank.

Macquarie’s analysts said they were “biting their nails” as the bank aims for a “challenging” 14% return on equity by 2020.

“[We] think that growth and margins will slow as the next leg of growth is increasingly driven by expansion into less wealthy regions outside London and the South East.”

Among the tiddlers, Powerhouse Energy charged up 0.07p, or 7%, to 1.15p after signing a deal to “investigate the opportunity” of establishing a network of hydrogen refuelling stations in Qatar for the 2022 World Cup.