Warpaint London’s growth continues as cosmetics group sales in the first half push earnings expectations ‘significantly higher’ than forecasts
- Trading at Warpaint London has grown significantly over the past two years
- The group revealed that sales increased by 45% in the first five months of 2023
- Customers of the color cosmetics company include Superdrug, Asda and Boots
Bright colours: Warpaint London revealed sales are up 45 per cent in the first five months of 2023 to £29.7m
Warpaint London Stocks surged in early trading after the group said full-year results would be “significantly ahead” of forecasts amid continued strong revenue growth.
The color cosmetics company, whose retail customers include Superdrug, Asda and Boots, revealed that sales in the first five months of 2023 are up 45 percent year-on-year to £29.7 million.
The owner of W7 and Technic has grown significantly over the past two years, having suffered in 2020 when work-from-home guidance and the lack of social events deterred consumers from purchasing beauty products.
The company’s share price rose 10.4 percent Thursday afternoon to 278.75 pence, making it one of the top ten gainers on the junior AIM All-Share Index.
With demand recovering in the wake of Covid-19, the group has sought to further drive growth by launching new product ranges and selling its wares in major retailers.
In the UK, Warpaint launched the W7 brand in Tesco, Boots and New Look stores, and the Technic and Body Collection in Wilko stores.
The company also expanded its presence in the US, acquiring clients such as CVS and Texas-based supermarket chain HEB.
Its e-commerce offering also allows it to sell products on Amazon and the Chinese shopping platforms TMall and Xiaohongshu.
Founded three decades ago by Eoin Macleod and Samuel Bazini, Warpaint’s original business model involved buying and selling excess stock from top brands such as Revlon and Max Factor to well-known companies, wholesalers and discount stores.
In 2002, the company launched W7, which now accounts for more than half of all revenues and is popular among young people with smaller budgets.
The other brands include Man’stuff, Chit Chat and Retra Holdings, a make-up gift company acquired by the group in November 2017 for £18.2 million.
Its market capitalization has risen from £62.3m to £214m since AIM’s listing in 2016.
“Warpaint has built strong momentum and remains in the tail end of its global growth opportunities,” said Clive and Darren Shirley, analysts at broker Shore Capital.
The analysts forecast the company will generate £81.8m in revenue this year, alongside an underlying profit of £16.5m and a pre-tax profit totaling £14.5m.