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Warpaint warns on UK weakness

The cosmetics company warned that progress in international trading was not enough to make up for weakness in the UK
October 30, 2018

Warpaint (W7L) may be making progress in its international expansion plans, but so far it hasn’t been enough to make up for trouble at home. The cosmetics company warned that retailers in the UK have been cutting their stock levels and reducing Christmas orders, presenting a big problem for Warpaint since holiday trading is key. Full-year sales are now expected to be in the range of £48m-£52m, with pre-tax profits excluding exceptional items around £8.5m-£10m. But profitability for 2018 will be dependent on the precise product and geographical mix of sales. Prior to this update, analysts at Stockdale had expected £55.3m in sales and pre-tax profits of £12.7m.

IC TIP: Hold at 113p

Progress in Warpaint’s international markets has so far failed to compensate for the problems in the UK, but has improved in recent months. As of the end of September, US sales were up 60 per cent compared with last year, and sales in the EU (excluding the UK) were up 13 per cent year on year. The newly established Chinese subsidiary recently made its first sales, and the company has also moved into Russia.