Budgie setback sparks Sleepy Kids warning

Problems in the United States with marketing the Duchess of York's children's books and videos based on Budgie the Little Helicopter prompted a 25 per cent fall in the share price of Budgie's UK publishers, Sleepy Kids, yesterday, as well as a profits warning from the company. Sleepy Kids' share price fell 6.5p to 20p.

Martin Powell, chairman of Sleepy Kids, said yesterday afternoon that while the Budgie television series had done well in the US, a big merchandising campaign there had been hit when the company's American marketing agent, Launey Hachmann Harris, went bankrupt in April.

Mr Powell said Launey Hachmann Harris's agreement was terminated by Sleepy Kids on 29 April. There would be a necessary legal delay until a new US agent could be appointed, he said, then the property would be relaunched throughout the US via a stronger agent.

The chairman said: "Inevitably the marketing of Budgie in the US has been severely disrupted by our agent filing for Chapter 11 in that territory.

"It is very frustrating to have such a success on coast-to-coast US television, only for it to be wasted by missed opportunities."

Mr Powell said that the board was very aware of the situation and several plans had been put into place to rectify matters. "We view this issue as a temporary setback which will inevitably lead to a slowdown in Budgie's US growth for the current year," he said.

"We remain confident regarding Budgie's long-term future and its ability to contribute to the profitability of the group.

"I would like to emphasise that Sleepy Kids is not solely dependent upon this or any other individual property and a number of other properties are at an advanced stage of development," Mr Powell said.