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 2022.
Financial Highlights
| · | Strong growth in sales to reach a record level for the Group. Significant profitability and cash generation during the year reflecting the focus on growing sales of the Group’s branded products |
| · | In 2022 Group sales increased by 28% to £64.1 million (2021: £50.0 million) |
| · UK revenue increased by 9% to £27.6 million (2021: £25.3 million) | |
| · International revenue increased by 48% to £36.5 million (2021: £24.7 million) | |
| · | Gross profit margin increased to 36.4% (2021: 33.8%), despite continued supply side price inflation |
| · | EBITDA increased 56% to £11.7 million (2021: £7.5 million) |
| · | Adjusted profit from operations of £10.3* million (2021: 7.0* million). Statutory profit from operations of £8.0 million (2021: £3.8 million) |
| · | Reported profit before tax of £7.7 million (2021: £3.7 million) |
| · | Adjusted earnings per share increased by 44% to 11.2p* (2021: 7.8p*) |
| · | Cash of £5.9 million at 31 December 2022 (31 December 2021: £4.1 million), with no debt |
| · | Final dividend recommended of 4.5 pence per share (2021: 3.5 pence per share), bringing the total dividend for the year to 7.1 pence per share (2021: 6.0 pence per share) |
*Adjusted numbers are closer to the underlying cash flow performance of the business which is regularly monitored and measured by management, the adjustments made to the statutory numbers are set out in the table below
Operational Highlights
| · | European sales increased by 56% to £28.1 million (2021: £18.0 million), making this the largest sales region for the Group |
| · | Successful launch in Boots of 45 W7 products in an initial 80 stores |
| · | USA sales, in sterling terms, increased by 79% in 2022 to £5.3 million (2021: £3.0 million) and grew by 55% in US dollar terms |
| · | Direct online sales continue to accelerate, with an increase of 106% in Group e-commerce sales in 2022 to account for 4.3% of Group sales (2021: 2.7% of Group sales) |
Post-Period End Highlights
| · Continued strong trading in Q1 2023, with unaudited Group sales for the three months to 31 March 2023 of £18.5 million an increase of 40% on the same period in 2022 (3 months to 31 March 2022: £13.2 million) |
| · Margins in Q1 were robust and better than those achieved in the full year 2022 |
| · Q1 2023 e-commerce sales of £0.83m, 188% ahead of the same period in 2022 (Q1 2022 £0.29m) |
| · Record cash in bank of £8.6 million as at 31 March 2023 and no debt |
| · Continuing brand sales momentum being seen in 2023: |
| o In April 2023, a range of 158 Technic products will be launched in an initial four Asda superstores on a trial basis with a view to a wider inclusion in Asda’s cosmetic range review in Q4 2023 |
| o After an initial trial of W7 product in 20 New Look stores in the UK, the Group is now rolling out W7 product to a further 200 New Look stores |
| o Significant further expansion in the US with H-E-B stores, CVS BIRL stores, where initial sales have been ahead of expectations, as well as launching in Sallys and Nordstrom Rack |
Commenting, Clive Garston, Chairman, said: “I am very pleased with Warpaint’s strong performance in 2022, which reflects the Group’s consistent and focussed strategy. We have concentrated on increasing our presence in larger retailers in all our major markets, both through growing sales to existing customers and entering into new relationships. This strategy of increasing sales to larger customers and providing products that their customers want is reflected in the Group’s results and provides a strong platform for the future. In addition, growing our online presence is a prime objective of the Group.
“Trading has continued to be strong in the first quarter of 2023, with the Group enjoying record first quarter sales. I am optimistic that the strong performance we have seen in 2022 and into 2023 will continue and that we have the right offering and strategy in place to continue to deliver profitable future growth, despite the backdrop of macroeconomic uncertainty.”
