Warpaint H1 losses widen as Covid-19 dents revenues
Cosmetics company Warpaint London reported a widening of its losses in the first half as it took a hit from the pandemic, but declared an interim dividend thanks to "good cash control".
In the six months to the end of June, pre-tax losses widened to £1.5m from £210,000 in the first half of last year, with sales down 29% to £13.5m due to Covid-19 restrictions in the UK and internationally.
UK revenue fell 12% to £6.8m, while international revenue was 40% lower at £6.7m.
Still, the company declared an interim dividend of 2.8p per share, maintaining the prior year interim dividend of 1.5p per share, together with a one off additional 1.3p, reflecting the fact that no final dividend was declared for 2019.
"This dividend is being declared against a background of good cash control and continued cash generation, along with the robust response of the business through the Covid-19 pandemic," it said.
Warpaint said sales have recovered well in the second half following lockdown and are steadily approaching its monthly budget levels set for 2020 prior to the pandemic.
It expects sales for the year ending 31 December 2020 to be around £37m, which should generate adjusted profit from operations in excess of £2m, assuming there is no material decline in trading conditions due to additional coronavirus-related lockdown measures, or any adverse exchange rate movements.
Chief executive Sam Bazini said: "Before the Covid-19 crisis the business was trading well, with higher sales, stronger margins, reduced overheads and higher net profit than budgeted, demonstrating that our business model is strong and that our brands are resonating with customers and consumers.
"In the short term, Covid-19 has had an impact on our financial performance, resulting in lower than budgeted sales and profits. However, as we start the second half of 2020, sales are beginning to return towards budgeted levels set prior to the Covid-19 pandemic and we are well positioned to take advantage of improving market conditions."