REG - Warpaint London PLC - Interim Results
21/09/2022 07:01
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220921:nRSU0565Aa&default-theme=true
RNS Number : 0565A Warpaint London PLC 21 September 2022
21 September 2022
Warpaint London PLC
("Warpaint", the "Company" or the "Group")
Interim Results for the six months ended 30 June 2022
Record first half sales and significantly improved gross margin
Warpaint London plc (AIM: W7L), the specialist supplier of colour cosmetics
and owner of the W7 and Technic brands is pleased to announce its unaudited
interim results for the six months ended 30 June 2022.
Financial Highlights
· Strong growth in sales during the period to reach a record first half level
for the Group, reflecting the focus on growing sales of the Group's branded
products
· Group sales increased by 37% to £25.2 million in H1 2022 (H1 2021: £18.4
million)
· UK revenue increased by 17% to £10.4 million (H1 2021: £8.9 million)
· International revenue increased by 55% to £14.8 million (H1 2021: £9.5
million)
· Gross profit margin increased to 39.0% (H1 2021: 34.5%), despite continued
supply side price inflation and higher than historic freight costs
· Adjusted EBITDA of £4.4(*) million (H1 2021: £2.1(*) million)
· Adjusted profit from operations of £4.8(**) million (H1 2021: £1.6(**)
million)
· Statutory profit from operations of £3.5 million (H1 2021: £0.3 million)
· Cash of £4.3 million as at 30 June 2022 (30 June 2021: £6.7 million)
· The board has declared an increased interim dividend of 2.6p per share (2021
interim dividend 2.5p per share)
· Consistent with previous years, the Group's financial performance is expected
to be second half weighted
* Adjusted for foreign exchange movements, share based payments and
exceptional items.
** Adjusted for exceptional costs of which there were £0.1 million in the
period (H1 2021: £0.005 million), £1.1 million of amortisation of intangible
assets (H1 2021: £1.2 million) and share based payments of £0.1 million (H1
2021: £0.1 million). Adjusted numbers are close to the underlying cash flow
performance of the business which is regularly monitored and measured by
management.
Operational Highlights
· Successful launch in Boots of 45 W7 products in an initial 80 stores in
February 2022
· Six new accounts opened in the US, including CVS, where a significant
Christmas 2022 order has also been received
· Online sales continue to accelerate in the UK and the US, with an increase of
44% in e-commerce sales in H1 2022 compared to H1 2021
Post-Period End Highlights
· Continued positive business momentum post period end, with unaudited Group
sales for the eight months to 31 August 2022 of £37.5 million (8 months to 31
August 2021: £27.1 million)
· Revenue and adjusted PBT guidance for the full year increased on 8 September
2022, reflecting this continued strong trading momentum across the business.
Adjusted profit before tax (adjusted for exceptional costs, amortisation of
intangible assets and share based payments) is expected to be in excess of £9
million, on anticipated sales of at least £61 million, for the year ending 31
December 2022
· The Group's expansion strategy continues with planned launches in H2 2022 and
2023 with new major retailers and the expansion of the range of products
stocked with certain existing customers, particularly in the UK and the US
· Launch of an initial range of 96 W7 products in 280 H-E-B stores, a Texas, US,
based supermarket group, from October 2022
· Launch of a range of 60 W7 cosmetic products in 190 CVS stores, in the US,
from January 2023
· To provide some assistance with increased living costs and to recognise
exceptional efforts in a record period for the Group, all of the Group's 122
employees (which excludes the board members) are being awarded a payment of
£1,000 over and above their normal remuneration in October 2022
Commenting, Sam Bazini Chief Executive, said:
"I am pleased that following the return of the Group to growth in 2021 this
trend has continued in the first half of 2022. We have grown sales in the
UK, continental Europe and elsewhere internationally in the period, all at an
improved margin, despite supply side inflationary and other cost pressures.
"We have been, and continue to be, successful in both adding new retailers to
our list of customers and expanding the number of products and outlets served
with our existing major customers. I am confident that this can continue and
we are working in partnership with a number of our larger existing retailers,
both in the UK and internationally, to grow sales further. We are also in
active discussions with additional major retailers.
"We are well capitalised with a healthy balance sheet and have significant
opportunities for further growth, both already planned with customers and
additional ones in discussion. I am confident that the Group will continue
to perform well for the remainder of the year and beyond."
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of the European
Union (Withdrawal) Act 2018
Investor Webinar
Warpaint's management will be hosting an online presentation and Q&A
session at 5.30 p.m. BST today, Wednesday 21 September 2022. This session is
open to all existing and prospective shareholders. Those who wish to attend
should register via the link below and they will be provided with access
details:
https://us02web.zoom.us/webinar/register/WN_B6FTpxwySIicNsb9e3l5Ww
(https://us02web.zoom.us/webinar/register/WN_B6FTpxwySIicNsb9e3l5Ww)
Participants will have the opportunity to submit questions during the session,
but questions are welcomed in advance and may be submitted to:
warpaint@investor-focus.co.uk (mailto:warpaint@investor-focus.co.uk) .
Enquiries:
Warpaint London c/o IFC
Sam Bazini - Chief Executive Officer
Eoin Macleod - Managing Director
Neil Rodol - Chief Financial Officer
Shore Capital (Nominated Adviser & Broker) 020 7408 4090
Patrick Castle, Daniel Bush - Corporate Advisory
Fiona Conroy - Corporate Broking
IFC Advisory (Financial PR & IR) 020 3934 6630
Tim Metcalfe, Graham Herring, Florence Chandler
Warpaint London plc
Warpaint sells branded cosmetics under the lead brand names of W7 and Technic.
W7 is sold in the UK primarily to retailers and internationally to local
distributors or retail chains. The Technic brand is sold in the UK and
continental Europe with a significant focus on the gifting market, principally
for high street retailers and supermarkets. In addition, Warpaint supplies
own brand white label cosmetics produced for several major high street
retailers. The Group also sells cosmetics using its other brand names of
Man'stuff, Body Collection, Very Vegan, and Chit Chat.
CHIEF EXECUTIVE'S REVIEW
In the first half of 2022, the Group achieved a record level of sales,
reflecting the success of the Group's strategy of focusing on growing sales of
its branded product. This was achieved at a much improved gross margin,
despite a number of continuing operational challenges being faced,
particularly with regard to supply side price inflation, and freight
availability and cost.
Our strategy of producing a wide range of high quality cosmetics at an
affordable price remains our key focus, growing sales through our existing
customers' outlets and winning new customers with significant sales
footprints, both in the UK and internationally, together with continuing to
grow our online sales. The global cosmetics market is increasingly seeing
customers transferring to more value orientated brands, such as those produced
by the Group, and I believe we are very well placed with our high quality
focused offering to capture further market share. The Group is also in
active discussions with new major retailers globally and with certain existing
customers, particularly in the UK and the US, regarding expanding of the range
of the Group's products stocked.
Following the rationalisation of our brand portfolio in 2020, removing from
sale those small number of brands that were sub-scale and did not have a
compelling market position, the Group has concentrated on its core W7,
Technic, Body Collection, Man'stuff and Chit Chat brands during the period,
with profitable close-out opportunities being taken where appropriate. In H1
2022 sales of the Group's branded product accounted for 88% of revenue (H1
2021: 87%) with the remainder being close-out and a modest level of white
label cosmetics for certain major high street retailers.
W7
The Group's lead brand remains W7, with sales in H1 2022 increasing by 38%,
accounting for 57% of total Group revenue (H1 2021: 57%). In the UK, W7
revenues were up 5% in H1 2022 compared to H1 2021, and the strongest growth
was seen in continental Europe, with sales increasing by 124% compared to H1
2021.
W7 sales in the UK represented 34% of W7 sales in the period, down from 45% in
H1 2021, as stronger growth was experienced in regions outside of the UK.
However, W7 sales in the UK continued to grow, assisted by increased sales
into Tesco, together with a growth in sales from the Group's other larger
customers in the UK. W7 sales in the UK also received a further boost with
Boots starting to stock a range of approximately 45 W7 products in an initial
80 stores from February 2022. Sales to date from Boots have been encouraging
and we anticipate growth in the presence with Boots in due course.
Technic
In the five years since the Company's acquisition of Retra Holdings Limited
("Retra") and its Technic, Body Collection and other brands in November 2017,
the focus has been on growing the sales of all year-round cosmetics in
addition to its strong and established Christmas gifting proposition. It was
therefore pleasing to see sales of Technic and the other Retra brands,
including Body Collection, grow by 37% in H1 2022.
In H1 2022, UK revenues from the Retra brands were up 42% on H1 2021, with
strong growth also seen in continental Europe, with sales up 36%. Sales of
the Retra brands in the US and the rest of the world remain small in the
context of the Group as a whole, representing under 2% of Group revenues.
Overall sales of the Retra brands were 31% of total Group revenue (H1 2021:
30%).
The Retra business also produces and sells own brand white label cosmetics for
several major high street retailers, including Asda in the UK. These sales
grew by 51% in H1 2022, but remain a small proportion of overall Group sales,
being 1% of Group revenue (H1 2021: 1%).
Close-out
Close-out sales continue not to be a core focus for the Group, although
advantage is taken of profitable close-out opportunities as they become
available. The close-out division was a similar proportion of Group sales in
the first half of 2022, compared to H1 2021, representing 11% of the overall
revenue of the Group (H1 2021 12%). Whilst not a core focus, this side of
the business continues to provide a significant and profitable source of
intelligence in the colour cosmetics market and access to new market trends.
E-commerce
In addition to growing sales through the W7 and Technic brands' own bespoke
e-commerce sites, the Group has continued to focus on growing sales of our
brands in the UK and the US on Amazon, and in China through official W7 brand
stores owned by the Group on Taobao Mall (Tmall), the most visited B2C online
retail platform in China and Xiaohongshu (Red), one of China's foremost social
media, fashion and luxury shopping platforms. Online sales grew in all
regions in H1 2022 to reach £0.63 million (H1 2021: £0.44 million), an
increase of 44%, at a similar operating margin to other Group sales. Online
sales for the eight months to 31 August increased further, up by 59% to £0.90
million compared to the same period in 2021 (eight months to 31 August 2021
£0.57 million).
Customers & Geographies
The largest markets for sales of our Group brands are in the UK, continental
Europe and Australia, with a growing presence in the US. In H1 2022 our top
ten customers represented 66% of revenues (H1 2021: 55%). Group sales are
now made in 46 countries.
UK
Group sales in the UK were up by 17% in H1 2022, with growth in sales of both
our lead brand W7, up 5%, and the Retra brands, which increased by 42%.
The top ten UK Group customers accounted for 80% of UK sales in H1 2022 (H1
2021: 74%).
Europe
Prior to the onset of the Covid-19 pandemic, continental Europe was for some
time an area of excellent growth for the Group. Following significantly
reduced demand caused by country wide lockdowns in 2020, the gradual opening
up, but with some continuing lockdowns, boosted Group sales in Europe in H1
2021 by 28% compared to the same period in 2020. In H1 2022 we have seen
further recovery, together with additional growth, particularly through
increased sales to certain existing customers as the number of these customers
stores served by the Group was expanded.
In H1 2022 continental European sales increased by 84%, making this the
largest sales region for the Group, accounting for 48% of Group sales in H1
2022.
Sales for the Group's brands into Europe are mainly to France, Denmark, Spain
and Sweden and during the period strong growth was seen particularly in sales
to customers headquartered in Scandinavia.
US
Sales in the US in H1 2022 in US$ terms were at the same level as H1 2021 at
US$1.7 million. In the US 88% of sales in H1 2022 (H1 2021 79%) were from
the sale of the Group's brands. Additionally, we continue to focus on
growing our US online sales via Amazon FBA.
The focus in the US is to increase the sales of the Group's brands as the
emphasis on close-out in our business continues to reduce. Post period end
we are pleased to have secured agreements to launch an initial range of 96 W7
products in 280 H-E-B stores, a Texas based supermarket group, from October
2022; and to launch a range of 60 W7 cosmetic products in 190 CVS stores, in
the US, from January 2023.
Rest of the World
Sales in the rest of the world for the Group in the period reduced by 21%,
primarily as a result of the timing of sales orders in Australia, which is a
key country for Warpaint in the rest of the world region. The rest of the
world region accounted for 6% of Group sales in H1 2022 (H1 2021: 10%) and the
focus continues to be on Australia, China and other countries where profitable
sales in appropriate volumes can be made.
Dividend
In accordance with the Group's policy to continue to pay appropriate
dividends, the board is pleased to declare an increased interim dividend of
2.6p per share (2021 interim dividend 2.5p per share) which will be paid on 25
November 2022 to shareholders on the register at 11 November 2022. The
shares will go ex-dividend on 10 November 2022.
People - Cost of Living Bonus
The board recognises that we are living in difficult times, with inflationary
pressures causing significant increases in the cost of living. To provide
some assistance with these increased living costs and to recognise the
exceptional efforts in a record period for the Group, all of the Group's 122
employees (which excludes the board members) are being awarded a payment of
£1,000 over and above their normal remuneration in October 2022.
Summary and Outlook
The Group has had a strong first half of 2022, with a record level of first
half sales delivered. That these sales have been achieved at a significantly
improved gross margin, despite supply side inflationary pressures is
particularly pleasing. To date the Group has been largely able to mitigate
supply side inflation with price rises where appropriate and we remain
confident that margins can be maintained going forward.
We have seen good growth in the UK, significant expansion in continental
Europe and have secured a number of relationships with significant retailers
in the US. Warpaint is a global business with the capacity, expertise and
strategy, coupled with balance sheet strength, to drive future growth from
both our existing and new customers.
As in previous years, the Group's sales are expected to remain second half
weighted, reflecting Christmas seasonal sales. As of 30 June 2022, the Group
had an order book of £12.9 million (30 June 2021: £9.9 million), which will
be delivered during H2 2022. This includes a significant increase in Christmas
orders, in particular for Asda in the UK and for retailers in the US.
I anticipate updating further on our progress later in the year and with
significant opportunities for further growth, both already secured and in
discussion, I am confident that the Group will continue to perform well for
the remainder of the year and beyond.
Sam Bazini
Chief Executive Officer
21 September 2022
CHIEF FINANCIAL OFFICER'S REVIEW
The first half of 2022 has seen the Group achieve results significantly ahead
of the first half of 2021, with improved sales, gross margin and profit before
tax. The Group continues its strategy of building the W7 and Technic brands
in the UK and internationally, and we remain focused on margin, being debt
free, and generating cash.
Headline results, shown below, represent the performance comparisons between
the consolidated statements of income for the half years ended 30 June 2022
and 30 June 2021.
Revenue
Total revenue increased by 37% from £18.4 million in H1 2021 to £25.2
million in H1 2022.
Company branded sales were £22.1 million in the first half of the year (H1
2021: £16.1 million). Our W7 brand had sales in the first half of the year
of £14.5 million (H1 2021: £10.5 million). Our Technic brand contributed
sales of £7.6 million in the first half of the year (H1 2021: £5.5 million).
Our Retra subsidiary business had sales of retailer own brand white label
cosmetics of £0.3 million in the first half of the year (H1 2021: £0.2
million). The white label business is traditionally cost competitive and
Retra chooses which projects to undertake based on commercial viability, in
particular margin.
The close-out business had sales in the first half of the year of £2.8
million (H1 2021: £2.1 million), nevertheless the Group, in line with its
strategy, is reducing its focus on close-out opportunities.
In the UK sales increased by 17% to £10.4 million (H1 2021: £8.9 million).
Internationally, revenue increased 55% from £9.5 million in H1 2021, to
£14.8 million in H1 2022. In Europe Group sales increased by 84% to £12.1
million (H1 2021: £6.5 million). In the rest of the world Group sales
decreased by 21% to £1.4 million (H1 2021: £1.7 million). In the US Group
sales increased by 7% to £1.3 million (H1 2021: £1.2 million).
E-commerce sales continued to grow in the first half of the year and now
represent 2.5% or £0.6 million of group revenue (2021: 2.4% / £0.4 million).
Product Gross Margin
Gross margin was 39.0% for the half year compared to 34.5% in H1 2021.
Our management teams across the Group were swift to recognise and navigate
cost headwinds that started in 2021. New product development, sourcing, and
an inflationary price increase to customers at the start of the year, have all
helped achieve a significant gross margin improvement in the first half of
2022.
We remain focused on improving gross margin where possible in all our
businesses and are making good use of our Hong Kong buying office to ensure
this happens. To counter currency pressure, we continue to move production
to new factories of equal quality to retain or improve margin and have a
natural hedge from our US dollar revenue which is growing.
At 31 December 2021 options were in place for the purchase of US$27 million at
US$1.3849/£, this has helped to protect our margin in the turbulent foreign
exchange markets. Since the start of this year, we have purchased more
options to help protect our gross margin in 2022.
As we enter the second half of the year the US dollar has strengthened, at the
same time container freight rates priced in dollars have fallen by half
compared to rates in 2021. The currency options we have for the rest of the
year, the falling container rates, new product development, sourcing, and
growing sales in the USA, will all help to protect our margin from the
strengthening dollar.
In the USA our strategy to exit sales of locally sourced close-out brands and
to focus on the sale of our Group brands was completed in 2021. This has
helped improve the gross margin in the USA to be more in line with the rest of
the Group and this has improved further in the first half of the year.
Operating Expenses
Total operating expenses before exceptional items, amortisation costs,
depreciation, foreign exchange movements and share based payments, grew more
slowly than sales, increasing by 27.3% to £5.4 million in the first half of
the year (H1 2021: £4.3 million). Operating costs as a percentage of sales
reduced from 23% to 21%.
The overall increase of £1.1 million year on year was necessary to support
the growth of the business and was made up of increases in wages and salaries,
office costs, the spend on PR and marketing as e-commerce sales continue to
grow, travel costs, professional fees and the cost of a larger sales team
based in the US.
Warpaint remains a business with most operating expenses relatively fixed and
evenly spread across the whole year. We continue to monitor and examine
significant costs to ensure they are controlled and strive to reduce them. In
addition, the increased scale of the business has given the Group increased
buying power.
Adjusted EBITDA
The board considers Adjusted EBITDA (adjusted for foreign exchange movements,
share based payments and exceptional items) a key measure of the performance
of the Group and one that is more closely aligned to the success of the
business. Adjusted EBITDA for the half year to 30 June 2022 was £4.4
million (30 June 2021: £2.1 million).
Profit Before Tax
Group profit before tax for the half year to 30 June 2022 was £3.5 million
(H1 2021: £0.2 million). The material changes in profitability between 30
June 2021 and 2022 were:
Effect on Profit
· Gross margin on increase in sales in H1 2022 £3.4 million
· Increase in operating expenses (see above heading) (£1.1) million
· FX gain in H1 2022 of £1.13 million (H1 2021: £0.16 million) £1.0 million
Exceptional Items
Exceptional costs in H1 2022 included a £0.11 million provision for content
use and associated legal fees (H1 2021 included £5,000 of legal costs).
The Group has recently agreed a settlement regarding a dispute with a third
party relating to the historic use of content on the Group's social media
platforms in the period from 2018 through to early 2021. The total
settlement including associated legal costs is expected to total £480,000, of
which £370,000 was provided for in the year to 31 December 2021. The
payment and the restriction of content use will not affect the ongoing
operations of the Group's businesses.
Earnings Per Share
The statutory interim basic and diluted earnings per share were 3.54p and
3.53p respectively in H1 2022 (H1 2021: 0.18p and 0.18p).
The adjusted interim basic and diluted earnings per share before exceptional
items and amortisation costs were 5.07p and 5.05p respectively in H1 2022 (H1
2021: 1.75p and 1.75p).
LTIP, EMI & CSOP Share Options
On 25 May 2021 CSOP share options were granted over a total of 400,000
ordinary shares of 25p each in the Company under the Warpaint London PLC
Company Share Option Plan and the Warpaint London plc Enterprise Management
Incentive Scheme. The options provide the right to acquire 400,000 ordinary
shares at an exercise price of 122.0p per ordinary share.
The LTIP, EMI & CSOP share options had an immaterial dilutive impact on
earnings per share in the period. The share-based payment charge of the
LTIP, EMI and CSOP share options for the half year to 30 June 2022 was £0.09
million (H1 2021: £0.07 million) and has been taken to the share option
reserve.
Cash Flow and Cash Position
Net cash flow generated from operating activities was £(0.4) million compared
to £2.8 million in H1 2021. The Group's cash balance decreased by £2.4
million to £4.3 million as at 30 June 2022 (30 June 2021: £6.7 million).
The fall in cash year on year was due to the Group investing in inventory to
insure we continue to meet customer delivery expectations whilst global
distribution issues remain.
We expect capital expenditure requirements of the Group to remain low, however
as part of our strategy to grow market share in the UK and US there will be
occasions where investment in store furniture is required to secure that
business. In H1 2022, £0.4 million (H1 2021: £0.1 million) was spent on
store furniture, on new computer software and equipment, warehouse racking,
and other general office fixtures and fittings and plant upgrades.
Balance Sheet
The Group's balance sheet remains in a very healthy position. Net assets
totalled £39.0 million at 30 June 2022, with the majority made up of liquid
assets of inventory, trade receivables and cash. Included in the balance
sheet is £7.3 million of goodwill and £1.2 million of intangible fixed
assets arising from acquisition accounting.
Goodwill represents the excess of consideration over the fair value of the
Group's share of the net identifiable assets of the acquired business / cash
generating units at the date of acquisition. The carrying value at 30 June
2022 of £7.3 million included Treasured Scents Limited (Close-out business)
£0.5 million, Retra Holdings Limited £6.2 million and Marvin Leeds Marketing
Services, Inc. £0.6 million. Management have performed a mid-year review at
30 June 2022 and have concluded that no impairment is indicated for Treasured
Scents Limited, Retra Holdings Limited or Marvin Leeds Marketing Services,
Inc. as the recoverable amount exceeds the carrying value.
The balance sheet also includes £5.4 million of right-of-use assets, this is
the inclusion of the Group leasehold properties, now recognised as
right-of-use assets as directed by IFRS 16. An equivalent lease liability is
included of £5.6 million at the balance sheet date.
Trade receivables are monitored by management to ensure collection is made to
terms, to reduce the risk of bad debt and to control debtor days, which have
improved on the prior half year. Trade receivables, excluding other
receivables, at 30 June 2022 were £7.4 million (30 June 2021: £6.2
million). The provision for bad and doubtful debts carried forward is £0.12
million/1.6% of gross trade receivables (30 June 2021: £0.06 million/1.0%).
Inventories at 30 June 2022 were £21.9 million (30 June 2021: £16.7
million). The rise in inventory is a function of growth in the business and
to ensure delivery disruption is avoided for our customers. One of the
Group's unique selling propositions is that it can deliver a full range of
colour cosmetics to our customers, in good time all year round. Having
appropriate inventory levels is vital to providing that service. The
provision for old and slow inventory was £0.4 million/1.9% at 30 June 2022
(30 June 2021: £0.7 million/4.2%). Across the Group we have worked hard in
the last year to sell through older stock lines, allowing our provision for
old and slow inventory to fall 2.3% in percentage terms. Our Group policy is
to provide for 50% of the cost of perishable items that are over two years
old. However, we remain comforted by the fact that many such items in the
normal course of business are eventually sold through our close-out division
without a loss to the Group.
Included within borrowings and lease liabilities is an invoice and stock
finance facility used to help fund imports in our gifting business. At 30
June 2022 the outstanding balance on the invoice and stock finance facility
was £1.4 million (30 June 2021: £nil).
Working capital increased by £4.9 million from 30 June 2021 to 30 June
2022. The main components were an increase in inventory of £5.3 million, an
increase in trade and other receivables of £2.3 million, a decrease in cash
of £2.4 million, a decrease in trade and other payables of £1.1 million, and
an increase in the invoice and stock finance facility of £1.4 million.
Foreign Exchange
The Group imports most of its finished goods from China paid for in US
dollars, which are purchased throughout the year at spot as needed, or by
taking forward purchase foreign exchange options when rates are deemed
favourable, and with consideration for the budget rate set by the board for
the year. Similarly, foreign exchange options are taken to sell forward our
expected Euro income in the year to ensure our sales margin is protected.
We started 2022 with options in place for the purchase of US$27 million at
US$1.3849, and the sale of €3.9 million @ €1.1558 (1 January 2021: US$18
million @ US$1.3260/£, and €5.1 million @ €1.1077/£).
We have a natural hedge from sales to the US which are entirely in US dollars,
in H1 2022 these sales were US$1.7 million (H1 2021: US$1.7 million).
Together with sourcing product from new factories where it makes commercial
sense to do so, new product development, and by buying US dollars when rates
are favourable, we are able to mitigate the effect of a strong US dollar
against sterling.
Dividend
The board is pleased to have declared an increased interim dividend of 2.6p
per share which will be paid on 25 November 2022 to shareholders on the
register at 11 November 2022. The shares will go ex-dividend on 10 November
2022.
Neil Rodol
Chief Financial Officer
21 September 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 Months ended 6 Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
Notes
£'000 £'000 £'000
Revenue 25,197 18,417 50,003
Cost of sales (15,359) (12,064) (33,095)
Gross profit 9,838 6,353 16,908
Administrative expenses 3 (6,305) (6,039) (13,095)
Other operating income - - 2
Analysed as:
Adjusted profit from operations¹ 4,791 1,588 6,972
Amortisation (1,063) (1,204) (2,394)
Exceptional items 3 (109) (5) (586)
Share based payments (86) (65) (177)
Profit from operations 3,533 314 3,815
Finance expenses 4 (79) (148) (90)
Profit before tax 3 3,454 166 3,725
Tax expense 5 (737) (31) (895)
Profit for the period attributable to equity holders of the parent company 2,717 135 2,830
Other comprehensive income (net of tax):
Exchange gain on translation of foreign subsidiary 54 14 (4)
Total comprehensive income for the period attributable to equity holders of 2,771 149 2,826
the parent company
Basic earnings per share (pence) 6 3.54 0.18 3.69
Diluted earnings per share (pence) 6 3.53 0.18 3.68
Note 1 - Adjusted profit from operations is calculated as earnings before
interest, taxation, amortisation, impairment costs, share based payments and
exceptional items
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at 30 June As at 30 June As at 31 December 2021
2022 2021
£'000 £'000 £'000
ASSETS
Non-current assets
Goodwill 7,274 7,274 7,274
Intangible assets 1,188 3,434 2,260
Property, plant and equipment 1,409 1,198 1,385
Right-of-use assets 5,382 3,205 3,073
Deferred tax assets 580 569 500
15,833 15,680 14,492
Current assets
Inventories 21,944 16,687 18,139
Trade and other receivables 10203 7,898 10,322
Cash and cash equivalents 4,313 6,723 4,072
Derivative financial instruments 1,158 41 545
37,618 31,349 33,078
Total assets 53,451 47,029 47,570
LIABILITIES
Current liabilities
Trade and other payables 6,100 7,244 6,293
Borrowings and lease liabilities 2,184 625 610
Corporation tax payable 999 413 1,050
Provisions - - 370
9,283 8,282 8,323
Non-current liabilities
Borrowings and lease liabilities 4,803 2,695 2,537
Deferred tax liabilities 355 771 557
5,158 3,466 3,094
Total liabilities 14,441 11,748 11,417
NET ASSETS 39,010 35,281 36,153
EQUITY
Share capital 19,188 19,187 19,188
Share premium 19,360 19,359 19,360
Merger reserve (16,100) (16,100) (16,100)
Foreign exchange reserve 139 103 85
Share option reserve 1,896 1,698 1,810
Retained earnings 14,527 11,034 11,810
Total equity attributable to 39,010 35,281 36,153
shareholders
CONSOLIDATED STATEMENT OF CASH FLOW
Unaudited Unaudited Audited
6 Months ended 6 Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
Notes
£'000 £'000 £'000
Profit before tax for the period 3,454 166 3,725
Adjusted by:
Interest paid 4 79 148 90
Depreciation of property, plant and equipment 3 770 683 1,338
Amortisation of intangible assets 3 1,077 1,204 2,394
Net interest expense
Share based payment 86 65 177
Movement in inventories (3,805) (2,274) (3,726)
Movement in trade and other receivables 39 1,290 (1,135)
Movement in trade and other payables (561) 2,174 3,542
Movement in derivative financial instruments (613) (401) (905)
Other adjustments - (84)
Foreign exchange translation differences 54 15 (4)
Cash inflow generated from operations 580 3,070 5,412
Income tax paid (990) (310) (325)
Cash flows from operating activities (410) 2,760 5,087
Purchase of property, plant and equipment (417) (122) (596)
Purchase of intangible assets (6) (3) (3)
Cash flows used by investing activities (423) (125) (599)
Proceeds from issued share capital - - 2
Principal elements of lease payments (279) (591) (933)
Repayment of borrowings - (48) (48)
Increase in stock and invoice finance facilities 1,432 - -
Interest paid (79) (148) (90)
Dividends - - (4,222)
Cash flows used by financing activities 1074 (787) (5,291)
Net change in cash and cash equivalents 241 1,848 (803)
Cash and cash equivalents at beginning of period 4,072 4,875 4,875
Cash and cash equivalents at end of period 4,313 6,723 4,072
Cash and cash equivalents consists of:
Cash and cash equivalents 4,313 6,723 4,072
4,313 6,723 4,072
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share Premium Merger reserve Foreign exchange reserve Share option reserve Retained earnings
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 January 2021 19,187 19,359 (16,100) 89 1,633 13,202 37,370
On translation of foreign subsidiary - - - 14 - - 14
Profit for the period - - - - - 135 135
Total comprehensive income for the period - - - 14 - 135 149
Transactions with owners
Share based payments - - - - 65 - 65
Dividends paid - - - - - (2,303) (2,303)
Total transactions with owners - - - - 65 (2,303) (2,238)
As at 30 June 2021 19,187 19,359 (16,100) 103 1,698 11,034 35,281
As at 1 January 2021 19,187 19,359 (16,100) 89 1,633 13,202 37,370
Equity shares issued 1 1 - - - - 2
On translation of foreign subsidiary - - - (4) - - (4)
Profit for the year - - - - - 2,830 2,830
Total comprehensive income for the year 1 1 - (4) - 2,830 2,828
Transactions with owners
Share based payments - - - - 177 - 177
Dividends paid - - - - - (4,222) (4,222)
Total transactions with owners - - - - 177 (4,222) (4,045)
As at 31 December 2021 19,188 19,360 (16,100) 85 1,810 11,810 36,153
As at 1 January 2022 19,188 19,360 (16,100) 85 1,810 11,810 36,153
On translation of foreign subsidiary - - - 54 - - 54
Profit for the period - - - - - 2,717 2,717
Total comprehensive income for the period - - - 54 - 2,717 2,771
Transactions with owners
Share based payments - - - - 86 - 86
Total transactions with owners - - - - 86 - 86
As at 30 June 2022 19,188 19,360 (16,100) 139 1,896 14,527 39,010
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated interim financial information for the 6 months to 30 June
2022 has been prepared in accordance with the measurement and recognition
principles of UK adopted international accounting and accounting policies that
are consistent with the Group's Annual report and Accounts for the year ended
31 December 2021 and that are expected to be applied in the Group's Annual
Report and Accounts for the year ended 31 December 2022. They do not include
all of the information required for the full financial statements and should
be read in conjunction with the 2021 Annual Report and Accounts which were
prepared in accordance with UK adopted international accounting standards.
The comparative financial information for the year ended 31 December 2021 in
this interim report does not constitute statutory accounts for that period
under section 435 of the Companies Act 2006. Statutory accounts for the year
ended 31 December 2021 have been reported on by the Group's auditors and
delivered to the Registrar of Companies.
The auditors' report on the accounts for the year ended 31 December 2021 was
unqualified, did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
2. Changes in significant accounting policies
The accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2021.
3. Profit from operations
Profit from operations is arrived at after charging/ (crediting):
Unaudited Unaudited Audited
6 Months ended 6 Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Depreciation of property, plant and equipment 393 344 648
Amortisation of right-of-use assets 377 339 690
Amortisation of intangible assets 1,077 1,204 2,394
Write down inventories at net realisable value (90) 167 (5)
Exchange differences (1,126) (163) (614)
Exceptional costs 109 5 586
4. Finance expenses
Unaudited Unaudited Audited
6 Months ended 6 Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Interest on loans - 64 5
Lease liability interest 63 43 84
Other interest 16 41 1
Finance expenses 79 148 90
5. Tax expenses
Unaudited Unaudited Audited
6 Months ended 6 Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Current tax expense
Current income tax charge 939 248 1,262
Adjustment in respect of previous periods - - -
1,262
Deferred tax expense
Relating to original and reversal of temporary differences (202) (217) (367)
Total tax in income statement 737 31 895
6. Earnings per share
Profit for the period used in the calculation of the basic and diluted
earnings per share:
Unaudited Unaudited Audited
6 Months ended 6 Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Profit after tax for the period 2,717 135 2,830
The weighted average number of shares for the purposes of diluted earnings per
share reconciles to the weighted average number of shares used in the
calculation of basic earnings per share as follows:
Unaudited Unaudited Audited
6 Months ended 6 Months ended Year ended
30 June 2022 30 June 2021 31 December 2021
Weighted average number of shares
Weighted number of ordinary shares for the purpose of basic earnings per share 76,751,187 76,749,999 76,751,187
Potentially dilutive shares awarded 278,693 251,863 62,699
Weighted number of ordinary shares for the purpose of diluted earnings per 77,029,880 77,001,862 76,813,886
share
Basic Earnings per share (pence) 3.54 0.18 3.69
Diluted earnings per share (pence) 3.53 0.18 3.68
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FLFVDADIIFIFRecent news on Warpaint London
See all newsREG - Warpaint London PLC - Director / PDMR Dealings
AnnouncementREG - Shore Capital Stock. Warpaint London PLC - Result of Accelerated Bookbuild in Warpaint
AnnouncementREG - Shore Capital Stock. Warpaint London PLC - Proposed Accelerated Bookbuild in Warpaint
AnnouncementREG - Warpaint London PLC - Results for the year ended 31 December 2023
AnnouncementREG - Warpaint London PLC - Trading Update and Notice of Results
Announcement