Apr 10, 2019
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Warpaint profits drop but sales rise and international growth is key

Apr 10, 2019

Warpaint London said Wednesday that 2018 saw surging sales but lower profits as the owner of the W7 and Technic brands saw acquisition and impairment expenses offsetting healthy revenue figures.

Warpaint London/W7

Pre-tax profit for the financial and calendar year fell 32% to £4.7 million, even though revenue soared 49% to £48.5 million. But at least adjusted profit from operations rose to £8.3 million from £7.7 million a year earlier.

“2018 was a challenging year for the company as it faced continuing uncertainty caused by the prospect of Brexit, a fluctuating Sterling exchange rate and a severe decline in retail sales on the UK high street,” said chairman Clive Garston. “However, despite the challenges of 2018, I believe the company is well placed for the future.”

He added that “trading conditions remain difficult in the UK, [but] we have had a promising start to the current financial year. We continue to grow internationally and expect our sales outside the UK to be an ever greater proportion of group sales going forward.”

He was particularly encouraged by the sales of the Retra brands and its growth in the US.

International revenue increased by 59.2% to £25.1 million and UK revenue is now 48% of total business, down from 52% a year earlier as its “strategic emphasis on international expansion continues.”

Warpaint is made up of two divisions. The largest division sells own brand cosmetics under the W7 and Technic brands. W7 is sold in the UK to discount retailers and internationally to local distributors or retail chains. The Technic brand is sold in the UK and Europe with a big focus on gifting via high street retailers and supermarkets. The division supplies own brand white label cosmetics produced for major high street retailers too. And the group sells cosmetics using the smaller own-brand names of Man'stuff, Body Collection, Vintage, Outdoor Girl, Very Vegan, Chit Chat, Smooch, Copy Cat and Taxi.

The second division trades in close-out and excess stock of branded cosmetics and fragrances from around the world.

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