Warpaint London plc (LON:W7L), the specialist supplier of colour cosmetics and owner of the W7 and Technic brands, has announced its audited results for the year ended 31 December 2023.
Financial Highlights
| · | Strong growth in sales, margins and profits to reach record levels for the Group. Significant growth in all geographic regions reflecting the focus on growing sales of the Group’s branded products |
| · | Group sales for 2023 grew by 40% to £89.6 million (2022: £64.1 million) |
| · EU revenue increased by 60.5% to £45.1 million (2022: 28.1 million)· UK revenue increased by 17.6% to £32.4 million (2022: £27.6 million) | |
| · US revenue increased by 36.8% to £7.3 million (2022: £5.3 million) | |
| · | Gross profit margin increased to 39.9% (2022: 36.4%) |
| · | EBITDA increased 74% to £20.4 million (2022: £11.7 million) |
| · | Profit before tax was up by 136% to £18.1 million (2022: £7.7 million) |
| · | Earnings per share up 123% 18.1p (2022: 8.1p) |
| · | Cash of £9.1 million at 31 December 2023 (31 December 2022: £5.9 million), with no debt |
| · | Recommended final dividend of 6.0 pence per share (2022: 4.5 pence per share), bringing the total dividend for the year to 9.0 pence per share (2022: 7.1 pence per share), an increase of 27% |
Operational Highlights
| · | Sales of the Group’s branded products increased by 47% to £84.8 million (2022: £57.7 million) driven by the Group’s lead brand W7 increasing by 64% to £57.4 million (2022: £35.0 million) |
| · | Direct online sales continue to accelerate, with an increase of 121% in Group e-commerce sales in 2023 to £6.2 million, accounting for 6.9% of Group sales (2022: £2.8 million, 4.3% of Group sales) |
| · | Successful launch of W7 product in an initial 71 Superdrug stores |
| · | Following a successful trial in 20 New Look stores in 2022, W7 product was rolled out to a further 200 stores in 2023 |
| · | Significant further expansion in Europe, the largest sales region for the Group, for both the W7 and Technic brands including with Normal, Etos and Wibra |
| · | W7 launched in 100 Watsons stores in the Philippines in 2023 |
Post-Period End Highlights
| · Continued strong trading in Q1 2024, with unaudited Group sales for the three months to 31 March 2023 of £23.5 million an increase of 28% on the same period in 2023 (3 months to 31 March 2023: £18.4 million) |
| · Margins in Q1 were robust and better than those achieved in the full year 2023 |
| · Maintaining a strong balance sheet, with no debt. Cash balances as at 2 April 2024 totalled £7.5 million after investment in a significant increase in stock to satisfy expected demand later in the year (31 March 2023: £8.5 million) |
| · Continuing brand sales momentum being seen in 2024, both internationally and the UK, including: |
| o In the US: |
| o Q1 2024 expansion into CVS in the US already implemented, expanding the W7 range stocked and roll-out to a further 387 stores |
| o Significant Christmas order received from Walmart in the US, for W7 and Chit Chat product and in discussions to stock the Group’s all year round product |
| o Significant expansion planned with Five Below in the US during H1 2024, including the stocking of an increased range of W7 product in all 1544 of their stores, with a further 225+ Five Below stores expected to open in the next 12 months stocking W7 product |
| o In the UK: |
| o In March 2024, a full range of Technic products was launched in an initial 202 Morrisons stores in the UK |
| o Expansion to a further 100 Boots stores during April 2024 with additional W7 products stocked in existing and newly added stores |
| o Further rollout with Superdrug planned for July 2024, into a further 63 stores, taking the number of Superdrug stores served to 134, and an increase in the products stocked across all these stores |
| o Further range and store expansions planned with other existing customers including Etos, Normal, Tesco, The Range and Wibra, together with launches with a number of significant new customers |
Commenting, Warpaint London’s Clive Garston, Chairman, said: “I am very pleased with the Group’s strong performance in 2023 and that this has continued into 2024, with record first quarter sales. This reflects the delivery of Warpaint’s consistent and focused strategy. The key to our growth has been, and will continue to be, expanding our presence in large retailers globally, by growing our sales with existing customers, entering into relationships with new ones and increasing our online presence. Notwithstanding the continuing volatile economic environment and challenges facing our customers, I am optimistic that the strong performance we have seen in 2022, 2023 and now into 2024 will continue and that we have the right offering and strategy in place to continue to deliver profitable future growth.”
