Warpaint trading update paints picture of weak UK beauty market
Listed beauty company Warpaint London issued a trading update on Tuesday and it didn’t make pleasant reading. It didn’t make long reading either as the company had very little to say other than what last year’s final revenue and profit figures should be.
The owner of the W7 and Technic brands said that, subject to audit, it expects to report revenue of £48.5 million and adjusted profit before tax of £8.25 million for the year ended December 31. We won’t know the definite figures until April.
There was no other detail but the year clearly didn’t end well. Last autumn, the company had said that it anticipated full-year revenue would be in the range of £48 million to £52 million so it has come in at the lower end of those expectations. And the profit figure had been forecast to sit between £8.5 million and £10 million so the company missed even the lowest end of that forecast.
What went wrong? In the autumn update, it had blamed the UK market, which accounted for 44% of group sales in the first half of the year, saying that it had seen “further softening recently, with retailers reducing stock levels and Christmas orders.” However, it also highlighted a stronger than expected performance abroad.
It’s disappointing news with the beauty sector having been seen as resilient in the face of the UK retail downturn. And investors showed their disappointment as the company’s shares fell almost 10% in early trading on Tuesday.
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