- Colour cosmetics supplier flags strong start to 2023
- Profits expected to smash earlier forecasts
- Sitting pretty with cash balances of £7.6 million
Shares in Warpaint London (W7L:AIM) shot 5% ahead to a year high 207.5p after the colour cosmetics supplier treated investors to another earnings upgrade off the back of what Shore Capital dubbed ‘glittering’ trading.
In an unscheduled update, Iver-based Warpaint said the strong trading seen last year has continued in the first quarter of 2023.
And given this positive start to the year to December 2023, profits are now expected to be ahead of the board’s earlier expectations.
PORTFOLIO GLITZ AND GLAMOUR
The owner of the W7 and Technic brands is on course to deliver record first quarter revenues ‘with sales to 23 March 2023 already in excess of £16 million’, so comfortably above the £13.2 million generated in last year’s comparable quarter.
Growing its business with customers ranging from Tesco (TSCO) and Boots to TJX (TJX:NYSE) and Five Below (FIVE:NASDAQ) across the pond, Warpaint insisted margins remain ‘robust and in line with those achieved in 2022’.
The company also highlighted the strength of its balance sheet with cash balances as at 23 March 2023 totalling £7.6 million. That’s up from £5.8 million as of 31 December 2022 and Warpaint is unfettered by debt.
Following the short and sweet update, Shore Capital upgraded its full year 2023 and 2024 pre-tax profit forecasts by 11% and 15% respectively to £11 million and £12.4 million.
The house broker believes Warpaint’s strong sales growth is being ‘experienced across all markets, so the UK, the USA, Europe and China. Online also continues to trade very well, with Warpaint’s Amazon partnership supporting growth across North America and Europe, with the UK and China also well ahead.’
Warpaint’s CEO Sam Bazini said he is ‘delighted that the strong performance of the group seen in 2022 has continued into 2023. We are enjoying a strong trading performance across the group, with sales growth in many territories and online. We also continue to enjoy healthy margins.’
As for Shore Capital, it stressed that Warpaint’s post-lockdown trading outperformance ‘shows no sign of abating, supporting a pleasing and ongoing upgrade cycle’.
The broker views Warpaint as ‘an attractive growth company, which remains in the foothills of its UK and international growth prospects and ambitions.’
