Warpaint London, a prominent supplier of color cosmetics including popular brands like W7 and Technic, faced significant challenges in 2020 due to the impact of the Covid-19 pandemic. With lockdowns and temporary store closures, the company witnessed a decline in revenue, dropping from £49.3 million to £40.3 million compared to the previous year. Furthermore, Warpaint reported a pre-tax loss of £1.1 million, a stark contrast to the pre-tax profit of £1.8 million in the preceding 12 months. Adjusted profit from operating activities also experienced a decline, falling from £5.6 million to £2.5 million.

Despite these setbacks, Warpaint managed to display resilience and successfully navigate the storm caused by the pandemic. The company witnessed a significant increase in cash generation, with cash rising by over 81% to reach £4.9 million. Cash generated from operating activities also saw a notable growth of 70.7% to £7.5 million.

In addition to weathering the impact of the pandemic, Warpaint witnessed an improvement in trading during the initial quarter of 2021. Sales within the first three months of the year were 9% higher compared to the same period in 2020. This growth is particularly remarkable considering the impact of Covid-19-related lockdowns on the final weeks of the first quarter in 2020. Warpaint experienced sales increases in all geographic regions and reported an improvement in product gross margin compared to the same quarter of the previous year.

During the trading period, Warpaint strategically repositioned its business by focusing on mainstream high street stores and online sales. It successfully launched its W7 brand in Tesco supermarkets and expanded its product offerings in Wilko stores, introducing Technic and Body Collection products. In the US market, Warpaint achieved further expansion with W7 products now available in over 1,000 Five Below stores. Additionally, the company witnessed significant growth in online sales after launching its products on Amazon, particularly in the UK and US markets.

Chairman Clive Garston expressed confidence in Warpaint’s ability to overcome the challenges brought by the pandemic. He praised the company for its strong balance sheet, agile management team, and adaptability to unprecedented circumstances. Garston emphasized the progress made in expanding the number and types of retailers carrying Warpaint’s products in the UK, as well as the growth in the company’s online presence. He also expressed optimism about the continued improvement in trading during the first quarter of 2021 and the company’s strategy for profitable future growth.

Overall, Warpaint London demonstrated resilience and adaptability in the face of a challenging trading year. With a strong focus on expanding its presence in both physical and online retail channels, the company is well-positioned for continued growth in the cosmetics market.

Useful links:
Warpaint London Official Website
Tesco Supermarkets Cosmetics Section