Warpaint London swings to a loss as margins contract

Cosmetics company Warpaint London swung to an interim loss on Wednesday after some disappointing sales growth and increased expenses.

Warpaint turned in a pre-tax loss of £210,000 for the six months ended 30 June, a stark contrast against the pre-tax profit of £1.32m recorded a year earlier as sales rose just 2.9% year-on-year to £18.9m.

Adjusted profits more than halved to £1.2m, down from £2.6m as margins contracted 1.6% to 34.9% due to the impact of lower margin US sales. Total operating expenses increased by 24.8% to £6.67m.

While cash generated from operations halved to £2m, Warpaint maintained its interim dividend of 1.5p per share.

The AIM-listed group said the first half of 2019 had presented "challenging conditions", particularly in the UK. Nevertheless, Warpaint said it had shown "resilience" and adapted to the changing market conditions.

"With our strong financial foundation and having net cash, prospects remain encouraging. The outlook for the group as we follow and adopt our growth strategy, remains positive," said Warpaint.

As of 1355 BST, Warpaint shares had picked up 0.97% to 52p.