Trading Update

RNS Number : 5669X

Warpaint London PLC

20 December 2019

 

20 December 2019

Warpaint London PLC

("Warpaint", the "Company" or the "Group")

Trading Update

Change of Executive Director Positions

Warpaint London plc (AIM: W7L), the specialist supplier of colour cosmetics and owner of the W7 and Technic brands, provides an update on the trading performance for the year ending 31 December 2019 and announces a splitting of the positions of the Joint Chief Executives.

Trading Update

The Company's board is pleased to announce that it currently anticipates that Group sales for the financial year to 31 December 2019 will be approximately £50 million, in line with the guidance provided in the Company's trading update on 6 August 2019.

As the Company has previously outlined, a number of factors, including the geographic mix of sales, adverse exchange rate movements and the Group's investment in its strategy for future growth, particularly in the US, are having an impact on profitability in the current financial year.  Consequently, the Company's board currently expects adjusted profit before tax for the year ending 31 December 2019 (excluding amortisation in connection with acquisitions, share incentive scheme costs and exceptional items, which the board expects to total approximately £2.8 million) will now be in the range of £5.1 million to £5.5 million.

Exchange rate movements in recent months have had a negative impact of approximately £250,000, from a translational perspective, on profitability since the Company's last update in September 2019. This, coupled with further negative margin impact, has led to this reduction in the expected adjusted profit before tax for the current financial year from the previously anticipated range of £6 million to £7 million.

Change of Executive Director Positions

Following a review of the senior roles within the Company it has been decided that from 1 January 2020 the positions of the Joint Chief Executives will be split, with Sam Bazini remaining as Chief Executive and Eoin Macleod being appointed to the newly created position of Managing Director, reflecting his more operational focus.  Both Sam Bazini and Eoin Macleod remain significant shareholders and as executive directors of the Company on its board.

Commenting, Clive Garston, Chairman of Warpaint, said:  "I am pleased that we anticipate reporting sales for the current financial year in line with the guidance we provided in August.  Whilst the unprecedented volatility in exchange rates in recent months has had a negative impact on the profits of the Company, both from a translational and margin perspective, I am pleased by our overall trading performance.

"Following a review of the roles being undertaken by our Joint Chief Executives we have decided to formally split the role.  Sam and Eoin have always split the Chief Executive role so that they have distinct responsibilities within the Company, but with the Company's growth and diversification since admission to AIM we think these new positions are now an appropriate way to formally reflect this.

"With the Company's robust balance sheet, profitable trading performance and strategy for growth we continue to look forward to the new year with confidence."

Enquiries:

Warpaint London Sam Bazini - Joint Chief Executive Officer Eoin Macleod - Joint Chief Executive Officer Neil Rodol - Chief Financial Officer	c/o IFC
Shore Capital (Nominated Adviser and Joint Broker) Antonio Bossi - Corporate Advisory Fiona Conroy - Corporate Broking	020 7408 4090
N+1 Singer (Joint Broker) Shaun Dobson - Corporate Finance Alex Bond - Corporate Finance Mia Gardner - Corporate Broking	020 7496 3000
IFC Advisory (Financial PR & IR) Tim Metcalfe Graham Herring Florence Chandler	020 3934 6630

Warpaint London plc

Warpaint London plc is made up of two divisions.

The largest division sells cosmetics under the lead brand names of W7 and Technic. W7 is sold in the UK primarily to discount retailers and internationally to local distributors or retail chains. The Technic brand is sold in the UK and the rest of Europe with a significant focus on the gifting market, principally for high street retailers and supermarkets. In addition, this division supplies white label cosmetics produced for several major high street retailers. The Group also sells cosmetics using the smaller brand names of Man'stuff, Body Collection, Vintage, Outdoor Girl, Very Vegan, Chit Chat, Smooch, Copy Cat and Taxi.

The second division trades in close-out and excess stock of other branded cosmetics and fragrances from around the world.

 

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