Warpaint London has strong first half globally, starts trial with Asda

Beauty specialist Warpaint London’s results for the first half of the year showed buoyant growth in both sales and profits with more to come in H2. 

It said the growth was seen “across all geographic regions” and “meant a record first half, reflecting the focus on growing sales of the group’s branded products”.

Group sales increased 46% to £36.7 million and UK revenue rose 28% to £13.3 million. International revenue was up 58% to £23.4 million. In fact, European sales rose 56%, the US surged 83% and the rest of the world 53%.

Meanwhile W7 brand sales shot up by 67% and Technic brand sales rose 37%.

The gross profit margin increased to 39.1% from 39% “due to successful management of continued supply side inflation”.

That led to adjusted EBITDA of £7.9 million, up from £4.4 million a year ago, and statutory profit from operations of £6.3 million, up from £3.5 million.

And while the first half was impressive, it added that “consistent with previous years due to Christmas gifting orders and its momentum, the group’s sales are expected to again be second-half-weighted”.

But it didn’t mention how the failure of the Wilko chain would affect its business. The company has struck deals with a variety of UK retailers in recent years, including Tesco, Boots, Superdrug and Wilko. 

When it first signed a deal for two of its brands to be available in Wilko three years ago, the company’s CEO hailed the retailer’s “UK-wide presence” and said it’s “an ideal retail partner for Warpaint”.

While the Wilko loss is likely to leave a gap, the company appears to be replacing it with other deals. A range of 158 Technic products has launched in an initial four Asda superstores on a trial basis ahead of Asda’s cosmetic range review that will happen in Q4. If it does well there and distribution is widened, that should more than make up for any Wilko losses.

And it has seen “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”.

And Online sales continue to accelerate in the UK, EU, China and the US, increasing by 212% to £2 million in H1.