Commenting, Warpaint London, Sam Bazini and Eoin Macleod, Joint Chief Executives said:
“We are pleased with the progress we have made in the first half of 2018. The Retra acquisition has been successfully integrated into the business and we are confident that our additional acquisition of Leeds Marketing will provide us enhanced access to the USA, the largest colour cosmetics market in the world worth US$11 billion.
“The additional revenues in the second half, particularly from Christmas gifting, are expected to result in overall revenue being two thirds weighted to the second half of this financial year and with a fixed cost base that is evenly spread over the full year, we expect to deliver overall Group earnings in line with management’s expectations.
“We remain confident in the opportunities for Warpaint in the future and look forward to delivering against our strategy and promoting our brands around the world.”
Warpaint London plc (LON: W7L), the specialist supplier of colour cosmetics and owner of the W7 and Technic brands, today announced its unaudited interim results for the six months ended 30 June 2018.
· Sales up 38.7% to £18.4 million* in H1 2018 from £13.3 million in H1 2017
· Like for like** sales up 7.3% in H1 2018 compared to H1 2017
· 35.9%* growth in own brand sales, 33.2% growth in close-out sales
· Gross profit up 30.0% to £6.7 million* from £5.2 million in H1 2017
· Adjusted Profit from Operations of £2.8 million* in the half year (before exceptional Items, depreciation and amortisation costs) (H1 2017 £3.1 million)
· Net cash of £4.6 million at 30 June 2018 (30 June 2017: £2.5 million)
· Interim Dividend increased by 7% to 1.5p per share (2017 1.4p)
* H1 2018 numbers include the trade of Retra Holdings Ltd (“Retra”) acquired on 30 November 2017
** Like for like excludes the trade of Retra
· W7 brand continues overall sales growth year on year in particular in export markets in the EU +35.3% and USA +3.4% (+15.4% in US$ terms)
· UK sales now 44% of total business (H1 2017: 49%), as strategic emphasis on international expansion continues
· Significantly increased Christmas orders to be delivered, own brands order book of £8.2 million* at 30 June 2018 (30 June 2017: £7.2 million including Retra)
· E-commerce strategy now soft launched in the USA with local fulfillment in place
· Retra acquisition successfully integrated (acquired 30 November 2017)
· Queen’s Award for Enterprise – International Trade awarded
Post-Period End Highlights
· Strategic acquisition of USA distributor, Leeds Marketing, for US$2.16 million on 2 August 2018
· EBITDA adjustment agreed on purchase of Retra resulting in a repayment of £0.45 million
We have had a solid start to the current year and the Retra acquisition has been well integrated. The additional acquisition of our distributor business in the USA on 2 August 2018 will accelerate our growth into the largest colour cosmetics market in the world and provide useful dollar based income.
With our strong financial foundation and being net debt free, prospects are encouraging and Warpaint is well positioned to continue to deliver increasing shareholder value in 2018. The outlook for the Group remains positive.
The emphasis on Christmas gifting of our own brands across the Group has resulted in an order book that was significantly ahead at 30 June 2018 compared to the same point in 2017 on a comparable basis (including the own brand orders of Retra in H1 2017), allowing us visibility and confidence for the full year outturn.
In addition our e-commerce strategy for the W7 brand in the USA (to be replicated in a similar manner in China), the further development of our other own brands and the successful launch of the Very Vegan range, will strengthen our growth plans for this year and beyond.
We are confident that we can deliver improving shareholder returns through increased organic growth and improved margins.