REG - Warpaint London PLC - Results for the year ended 31 December 2025
Today 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260429:nRSc2948Ca&default-theme=true
RNS Number : 2948C Warpaint London PLC 29 April 2026
29 April 2026
Warpaint London PLC
("Warpaint", the "Company" or the "Group")
Results for the year ended 31 December 2025
Warpaint London plc (AIM: W7L; OTCQX: WPNTF), the specialist supplier of high
quality colour cosmetics and personal care brands at an affordable price, and
owner of the W7, Technic, Skin & Tan, Super Facialist, Dirty Works, Fish
Soho and Barry M brands is pleased to announce its audited results for the
year ended 31 December 2025.
Audited 12 months to Audited 12 months to Change
31 December 2025 31 December 2024
Revenue £105.1m £101.6m +3%
Gross profit margin 42.6% 41.2% +140bps
Adjusted EBITDA £21.3m £25.0m -15%
Profit before tax £18.1m £23.8m -24%
Profit attributable to equity holders £14.4m £18.2m -21%
Adjusted Earnings per share 16.7p 22.3p -25%
Cash and cash equivalents(1) £16.0m £7.9m +102%
(1) 2024 Cash and cash equivalents excludes £14.0 million, which was held in
an escrow account at 31 December 2024. The funds were released in February
2025 and utilised in the acquisition of Brand Architekts Group PLC.
Adjusted numbers are close to the underlying cash flow performance of the
business which is regularly monitored and measured by management. The
adjustments made to the statutory numbers are shown in the table below.
Numbers are displayed rounded to one decimal place. Percentages are calculated
based on the original (unrounded) figures.
Financial Highlights
· Results reflect the challenging trading environment across many of the Group's
markets
· Group sales for 2025 grew by 3% to £105.1 million (2024: £101.6 million),
including the £11.8 million contribution from Brand Architekts Group PLC
("Brand Architekts") from 12 February 2025
· EU revenue was 3% lower at £52.9 million (2024: £54.7 million)
· UK revenue increased by 11% to £38.9 million (2024: £35.0 million)
· US revenue fell 21% to £6.9 million (2024: £8.7 million), a
decrease of 18% in US dollar terms
· ROW revenue increased by 101% to £6.5 million (2024: £3.2 million)
· Continued improvement in gross profit margin, increasing by 140bps to 42.6%
(2024: 41.2%) due to factors including successful launches of new product
lines, a modest price increase undertaken in the first half of the year,
sourcing improvements and volume savings
· Strong cash position of £16.0 million as at 31 December 2025 (31 December
2024: £7.9 million(1)), with no debt
· Recommended increased final dividend of 9.0 pence per share (2024: 7.5 pence
per share), bringing the total dividend for the year to 13.0 pence per share
(2024: 11.0 pence per share)
Operational Highlights
· Completed the acquisition of Brand Architekts in February 2025 and
successfully integrated the business into the Group, delivering a positive
Adjusted EBITDA contribution compared to the losses reported prior to
acquisition. Further improvements to the Brand Architekts portfolio being
implemented in 2026 that are expected to increase margin, particularly in H2
2026 and into 2027
· Continuing brand focus, particularly in H2 2025, both internationally
and the UK, including:
o In Europe: launch of W7 into 200 Tigota stores in Italy, with a capsule
collection going into a further 400 stores; expanded W7 assortment into all
546 Etos stores in the Netherlands, with permanent fixtures and an expanded
range and W7 going into an additional 150 Normal stores following the chain's
expansion
o In the UK: expanded into 140 additional Superdrug stores; gifting rolled
out into 350 Boots stores for Christmas 2025, alongside an expansion of
accessories into 250 additional stores and further expansion with 150
additional Tesco stores taking an Impulse offering
o In the US: expanded the W7 range stocked and rolled out to a further 399
CVS stores
o In the ROW: expanded sales in Chemist Warehouse in Australia and New
Zealand and launched into the Warehouse Group, New Zealand
o In a number of retailers volumes increased year-on-year, but generated
reduced revenues as consumers increasingly favoured lower price points within
the product range
· Direct online sales were £11.6 million, up 38% year on year,
accounting for 11.0% of Group sales (2024: £8.4 million/8.3%)
Post-Period End Highlights and Outlook
· The difficult trading conditions experienced in 2025 continued in Q1
2026 with unaudited Group sales for the four months to 30 April 2026 expected
to be approximately £26.1 million (four months to 30 April 2025: £32.6
million). However, sales in April 2026 are expected to be in excess of those
achieved in April 2025, with signs of recovery being experienced
· Sales in 2026 are expected to be more second half weighted than prior
years due to the timing of certain larger orders and planned customer rollouts
from May 2026
· Maintained a strong balance sheet, with no debt. Cash balances as at
31 March 2026 were £17.3 million (31 March 2025: £15.8 million)
· Acquisition of the Barry M brand, including its IP, stock and order
book, but excluding the manufacturing capabilities and any liabilities, for a
cash consideration of £1.4 million, out of administration. Barry M is a
well-established value cosmetics brand, trading in a similar market segment to
Warpaint's cosmetics brands
· Significantly improved Christmas order received from Walmart, now
that tariff levels in the US have settled compared to 2025
· Expansion of the Group's footprint in Europe in 2026 is expected to
include a contribution from Dirk Rossmann in Germany, part of the AS Watson
group, which is launching, as a pilot, a capsule range of W7 products into all
of its 2,200 stores from May 2026
· The Group continues to expand outside of the UK, Europe and the US,
with new markets opened in South America and an Indian subsidiary entity
starting trading in Q2 2026
· Despite continuing global macroeconomic headwinds the Group has
significant planned expansion opportunities, particularly for later in 2026,
and expects continued margin improvement
Commenting, Clive Garston, Chairman, said:
"Whilst the 2025 results were disappointing, it was a year of resilience and
strategic progress for Warpaint. Despite a challenging macroeconomic backdrop
and specific one-off headwinds, the Group delivered record revenues,
strengthened margins and maintained a robust, debt-free balance sheet. We also
demonstrated the ability to execute value-accretive acquisitions, successfully
integrating Brand Architekts and, post year end, adding the Barry M brand to
further enhance the Group's brand portfolio and retail reach.
"Looking ahead, whilst trading conditions remain subdued, I am confident that
our clear strategy, strong cash generation and entrepreneurial culture
position Warpaint well for a return to earnings growth. With an expanded brand
portfolio, further customer rollouts expected and increasing global
distribution, the board expects performance to improve through 2026,
particularly in the second half."
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
Enquiries:
Warpaint London c/o IFC
Sam Bazini - Chief Executive Officer
Eoin Macleod - Managing Director
Neil Rodol - Chief Financial Officer
Shore Capital (Nominated Adviser & Joint Broker) 020 7408 4090
Patrick Castle, Daniel Bush, Lucy Bowden - Corporate Advisory
Fiona Conroy - Corporate Broking
Berenberg (Joint Broker) 020 3207 7800
Clayton Bush, Alix Mecklenburg-Solodkoff, Alex Wright
IFC Advisory (Financial PR & IR) 020 3934 6632
Tim Metcalfe, Graham Herring, Florence Staton
Warpaint London plc
Warpaint is a specialist supplier of high quality colour cosmetics and
personal care brands at an affordable price, sold under the W7, Technic, Skin
& Tan, Super Facialist, Dirty Works and Fish Soho brands. Our brands are
sold primarily to major retailers, retail chains and supermarkets, with a
growing direct online business. Additionally, in February 2026, Warpaint
acquired the Barry M colour cosmetic brand.
HEADLINE RESULTS FOR THE YEAR ENDED 31 DECEMBER 2025
Statutory Results Year ended 31 Dec 2025 Year ended 31 Dec 2024
£m
Revenue 105.1 101.6
Profit from operations 18.5 24.0
Profit margin from operations 17.6% 23.6%
Profit before tax ("PBT") 18.1 23.8
Earnings per share ("EPS") 17.8p 23.5p
Cash and cash equivalents 16.0 7.9(1)
(1) 2024 Cash and cash equivalents excludes £14.0 million, which was held in
an escrow account at 31 December 2024. The funds were released in February
2025 and utilised in the acquisition of Brand Architekts Group PLC.
Adjusted(2) Statutory Results Year ended 31 Dec 2025 Year ended 31 Dec 2024
£m
Revenue 105.1 101.6
Adjusted profit from operations 16.3 24.8
Adjusted profit margin from operations 15.5% 24.4%
Adjusted PBT 15.9 24.6
Adjusted EPS 16.7p 22.3p
Cash and cash equivalents 16.0 7.9(1)
(2) Adjusted numbers are closer to the underlying cash flow performance of the
business which is regularly monitored and measured by management, the
adjustments made to the statutory numbers are as follows:
£m Year ended 31 Dec 2025 Year ended 31 Dec 2024
Statutory profit from operations 18.49 24.00
Depreciation 1.27 0.93
Amortisation of right of use assets 1.52 1.27
Amortisation of intangible assets 0.29 0.03
Foreign exchange loss/(gain) 2.23 (2.00)
EBITDA 23.80 24.23
Gain on bargain purchase(4) (4.52) -
Exceptional items(3) 1.39 0.42
Share-based payments 0.62 0.35
Adjusted EBITDA 21.29 24.99
Statutory profit from operations 18.49 24.00
Exceptional items(3) 1.39 0.42
Amortisation of intangible assets 0.29 0.03
Gain on bargain purchase(4) (4.52) -
Share-based payments 0.62 0.35
Adjusted profit from operations(2) 16.27 24.80
Adjusted profit margin from operations(2) 16.27 / 105.08 = 15.48% 24.80 / 101.61 = 24.4%
Statutory PBT 18.10 23.76
Exceptional items(3) 1.39 0.42
Amortisation 0.29 0.03
Share-based payments 0.62 0.35
Gain on bargain purchase(4) (4.52) -
Adjusted PBT(2) 15.88 24.56
Statutory profit attributable to equity holders 14.35 18.23
Exceptional items(3) 1.39 0.42
Amortisation of intangible assets 0.29 0.03m
Share-based payments 0.62 0.35m
Gain on bargain purchase(4) (4.52) -
Foreign exchange loss / (gain) 2.23 (2.00)
Tax attributable to adjusting items (0.88) 0.29
Adjusted profit attributable to equity holders 13.48 17.32
Weighted number of ordinary shares 80,774,765 77,691,505
Adjusted EPS(2) 16.68p 22.28p
( )
(3) Exceptional items include directly attributable acquisition costs,
restructuring costs and other one-off costs as a result of the acquisition of
Brand Architekts
(4)The gain on bargain purchase relates to the acquisition of Brand Architekts
in the year. See note 12 for further explanation
CHAIRMAN'S STATEMENT
2025 was a challenging year for Warpaint, against a backdrop of difficult
macroeconomic conditions and subdued consumer confidence, both in the UK and
our other markets. During the year the Group continued its strategy of
building its brands, concentrating on increasing its presence in larger
retailers globally and growing direct online sales, at attractive margins. I
believe this strategy, along with the focus on growing margins, generating
cash and remaining debt free continues to ensure that Warpaint remains very
well positioned for the future and will be an essential part of our future
success.
On 12 February 2025, we completed the acquisition of Brand Architekts.
Following the acquisition, decisive action was taken to apply the Group's
know-how, right-size the cost base, streamline operations and integrate the
business into the Group's wider infrastructure as a result of which the
business has now been successfully incorporated into the Group. Brand
Architekts delivered a positive Adjusted EBITDA contribution in line with our
expectations compared with the losses reported prior to acquisition. This
represents an important milestone and demonstrates the Group's ability to
acquire, integrate and improve underperforming businesses.
Post year end, on 9 February 2026, the Group acquired the Barry M brand,
including its IP, stock and order book, but excluding the manufacturing
capabilities and any liabilities, for a cash consideration of £1.4 million
out of administration. Barry M is a well-established value cosmetics brand,
trading in a similar market segment to Warpaint's cosmetics brands and
providing the Group with a very cost-effective opportunity to increase its UK
retailer presence and grow its brand portfolio.
Results
Despite the challenges, 2025 was again a year of achievement, with the Group
delivering record sales of £105.1 million (2024: £101.6 million), at an
increased gross margin. On a like-for-like basis, excluding the sales
generated by Brand Architekts in the period, revenue was £93.3 million.
However, the results for the year were negatively impacted by certain
specific, one-off events, as reported in our year end trading update. These
included: tariff volatility in the US, which disrupted the placing of
Christmas gift orders and impacted regular business causing the loss of
approximately £2.4 million of sales, and a large customer of the Technic
brand, Bodycare, going into administration, causing the loss of £3.3 million
of sales. These issues were major contributors to the lower profit before tax
of £18.1 million (2024: £23.8 million), with basic earnings per share of
17.8 pence (2024: 23.5 pence).
The balance sheet remains strong, with cash at 31 December 2025 of £16.0
million (31 December 2024: £7.9 million excluding £14.0 million held in
escrow to fund the acquisition of Brand Architekts), and the Group remains
debt free.
Dividend
In accordance with the Group's progressive dividend policy and reflecting the
available cash and ongoing profitability of the Group, the board is pleased to
recommend an increased final dividend 9.0 pence per share which, if approved
by shareholders at the annual general meeting ("AGM"), will be paid on 3 July
2026 to shareholders on the register at 12 June 2026. The shares will go
ex-dividend on 11 June 2026.
During the year, an interim dividend of 4.0 pence per share was paid on 21
November 2025, bringing the total dividend for the year to 13.0 pence per
share, an 18% increase over the 11.0 pence per share dividend for 2024.
Board
I am pleased to announce that Indira Thambiah, who has been an independent
Non-Executive Director since 1 January 2024, has been appointed Senior
Independent Non-Executive Director of the Company from 27 April 2026.
Annual General Meeting
The Company's AGM will be held at the Company's offices at Units B&C,
Orbital Forty Six, The Ridgeway Trading Estate, Iver, Bucks, SL0 9HW on 16
June 2026 at 10.00 a.m. and the board looks forward to welcoming those
shareholders who are able to attend in person.
Summary and Outlook
The difficult trading environment experienced in 2025 has continued into the
current year, but I believe that Warpaint is making the right decisions to
sustain long term growth. It is a founder-led, entrepreneurial company, with a
culture that enables it to move quickly in adapting to changing circumstances
and to withstand the challenging environment. The board is confident that this
will support a return to earnings growth when market conditions permit. One of
the strengths of Warpaint is its people and I would like to thank my
colleagues on the board and all of the Warpaint team for their dedication and
exceptional efforts during the year.
Warpaint continues to have a consistent and focused strategy of ensuring its
branded products are sold through an ever-expanding network of large retailers
globally, by gaining more space within these retailers, entering into
relationships with new ones and increasing the Group's online sales presence.
The addition of the Brand Architekts' brands during the year and the Barry M
brand more recently, present further significant opportunities for growth in
2026 and the future.
Whilst the board is mindful of the continuing global macroeconomic uncertainty
and continued subdued consumer confidence in many parts of the world, we
expect the Group performance to improve in 2026, particularly in the second
half.
Clive Garston
Chairman
28 April 2026
CHIEF EXECUTIVE'S STATEMENT
The 2025 results were heavily impacted by the very challenging macroeconomic
environment seen during the year and specific one-off factors, however, we
were pleased with the progress made in many areas of the Group and the Company
again achieved another record level of sales, at an improved gross profit
margin.
Group sales increased by 3.4% to £105.1 million (2024: £101.6 million),
importantly at an increased gross margin of 42.6% (2024: 41.2%), including the
contribution from Brand Architekts. As outlined in the Company's February 2026
trading update, revenue in 2025 was negatively impacted by the closure of
Bodycare, a significant customer for Technic (-£3.3 million), the challenging
consumer and customer environment (approximately -£4.0 million), and business
lost as a result of US tariff uncertainty earlier in the year leading to
stalled momentum in the US (-£2.4 million).
Despite the headwinds experienced, the Group generated Adjusted EBITDA of
£21.3 million and maintained its strong financial position with no debt and
continued strong cash generation. The resilience of the business model,
combined with disciplined cost control and careful management of working
capital, enabled the Group to continue paying significant dividends while
investing in future growth opportunities.
In 2025, the addition of the Brand Architekts' brands to our portfolio, and
more recently the Barry M brand, has provided additional opportunities to grow
sales and profits over and above those we expect from our core cosmetic
brands. Our global market share remains modest and there continues to be
substantial opportunities for growth, both with the Group's existing retail
partners and from other major retailers globally that we are in discussions
with.
W7
The Group's lead brand is W7, with sales in 2025 of £63.9 million, accounting
for 61% of total Group revenue (2024: £65.4 million/64%).
W7 revenue in the UK was down 5% year-on-year to £17.6 million (2024: £18.6
million), and represented 28% of W7 sales in the year (2024: 28%), reflecting
subdued consumer confidence in the UK, mitigated to a large extent in the
second half of the year by expansion of the range and outlets served by
existing retail partners. W7 sales in the UK continue to see significant
growth potential, particularly with existing retailers, where plans are in
place to expand the number of stores served and to increase the footprint in
existing stores during 2026. In the second half of 2025, W7 was rolled out
into an additional 140 Superdrug stores and launched accessories into 250
Boots stores, along with a Christmas gift offering going into 350 Boots stores
for the first time. W7 also expanded its impulse offering into a further 150
Tesco stores.
In 2025, W7 sales in Europe were £35.9 million (2024: £36.8 million), a fall
of 2% and represented 56% of W7 sales (2024: 56%). In the first half of the
year, certain larger retailers reduced their historic levels of stock held,
however, these returned to more normal order levels in the second half of the
year. Furthermore, additional sales were secured with existing customers as
they expanded the size of their estates, and new opportunities were secured
with new customers, including in countries where the Group has previously had
only a limited presence. Europe continues to present significant growth
opportunities for the Group, with both existing customers and new ones, both
of which are actively being pursued.
In the US, W7 sales decreased by 25% to £5.8 million in 2025 (2024: £7.8
million), accounting for 9% of overall W7 sales (2024: 12%), with growth into
an additional 399 CVS stores not fully mitigating lost sales due to the tariff
situation, particularly in April/May 2025, when retailers were looking to
place orders for Christmas. As tariffs have stabilised, albeit at higher than
historic levels, we continue to see significant opportunities in the US.
Across the rest of the world, W7 sales grew by 102% to £4.6 million in 2025
(2024: £2.3 million), but remain a modest proportion of overall W7 sales at
7% (2024: 4%).
Technic
In 2025, overall Group sales of Technic branded product, which includes the
Technic, Body Collection, Man'stuff and Chit Chat brands, fell by 15% to
£25.3 million (2024: £29.7 million), due particularly to the closure of
Bodycare, a significant Technic customer.
White label products are made for several major high street retailers and are
assessed on a case-by-case basis, based on the return they can deliver. In
2025, Technic's white label sales were £1.6 million (2024: £4.3 million),
and accounted for 1.5% of Group revenue (2024: 4%) as fewer appropriate
opportunities were presented.
Europe continued to represent the largest proportion of Technic sales in the
period, at £15.9 million or 59% (2024: £17.8 million/53%), with the UK being
its next largest market at £9.3 million, representing 35% of Technic's total
revenue (2024: £14.3 million/42%), the UK decreasing largely as a result of
the Bodycare closure and reduced white label business.
ROW sales were £1.4 million in 2025 and accounted for 5% of Technic sales
(2024: £0.9 million/3%), and while small in the context of the Group as a
whole, present an opportunity for future growth.
Technic continues to grow its direct online sales, particularly through brand
stores on Amazon.co.uk, Amazon.com and on continental European Amazon sites.
These direct online sales also remain a modest proportion of Technic's overall
sales and present a further opportunity for growth.
Brand Architekts
On 12 February 2025, the Group completed the acquisition of Brand Architekts,
a health, beauty and personal care brand specialist selling predominantly in
the UK. The brands have a focus on every day, high-performing products that
engender high levels of consumer loyalty. The Brand Architekts' portfolio of
brands encompasses female beauty, skincare, self-tan and male grooming. Brands
(including Skin & Tan, Super Facialist, Dirty Works and Fish Soho) are
available on the high street in leading pharmacy and drugstore chains, in
national grocery stores, on the platforms of global retailers, and through own
brand ecommerce websites.
From 12 February 2025, revenue from the Brand Architekts portfolio was £11.8
million, representing 11% of total Group revenue. The majority of Brand
Architekts' sales are in the UK (85%), with the remainder in the EU (7%),
which grew strongly in the second half of 2025, and Australia.
Following the acquisition, the Group made significant efforts to integrate the
business and reposition the individual brands. A number of decisive
operational actions were taken, including the rationalisation of the cost
base, the closure of the legacy head office and the integration of functions
into the Group's existing infrastructure. These measures created a more
efficient operating platform and aligned the business with the Group's broader
strategy.
As a result of these actions, Brand Architekts delivered a positive Adjusted
EBITDA contribution of £0.8 million since 12 February 2025, representing a
significant improvement on the Adjusted EBITDA loss reported prior to
acquisition (year to 30 June 2024: approximate £1.1 million loss). Returning
the business to profitability within the first full year of ownership was an
important objective for the Group and reflects the benefits of the integration
process, and the operational discipline and know how applied. Alongside the
operational restructuring, work was undertaken during the year to strengthen
the brand portfolio, develop new product ranges and prepare the business for
future growth. Much of this work was not reflected in the 2025 financial
performance and is expected to be seen particularly in the second half of 2026
and into 2027. In addition, Brand Architekts moved to Group inhouse
warehousing in early 2026, having been required to give 12 months' notice to
their previous third party logistics partners.
e-Commerce
The Group continued to drive direct online ("D2C") sales in 2025, an
initiative that started in 2020. Revenue increased by 38% to £11.6 million
(2024: £8.4 million), and as a proportion of Group revenue, D2C sales
increased to 11.0% in 2025 (2024: 8.3%). While growing these online sales, the
focus remains on achieving a similar net margin to that achieved via the
Group's sales through traditional physical outlets.
Significant opportunities to grow sales exist through the W7, Technic and
Brand Architekts brands' own e-commerce sites, and on Amazon in the UK, Europe
and the US.
Close-out
While close-out sales were slightly higher than last year, they are not a core
focus of the Group. However, the Group will continue to take advantage of
profitable close-out opportunities if they become available, as they continue
to provide a significant and profitable source of intelligence in the colour
cosmetics market. In 2025, close-out sales were £2.5 million (2024: £2.3
million) and represented 2% of the overall revenue of the Group (2024: 2%).
Barry M
Post year end, on 9 February 2026, the Group acquired the Barry M brand,
including its IP, stock and order book, but excluding the manufacturing
capabilities and any liabilities, for a cash consideration of £1.4 million
out of administration.
Barry M is a well-established value cosmetics brand, with strong recognition
in the UK beauty market and a long-standing presence with major retailers. It
trades in a similar market segment to Warpaint's cosmetics brands and has
significant retail distribution channels with one metre plus stands in more
than 1,300 stores, including Superdrug (650), Boots (420), Sainsbury's (120),
Tesco (50) and Priceline Australia (90), as well as trading direct to
consumers online.
The acquisition was financed from Warpaint's existing cash resources and
represented an attractive opportunity to expand the Group's brand portfolio
and further strengthen its position within the UK cosmetics sector. Barry M
benefits from significant existing retail distribution and a loyal consumer
following, while also offering opportunities for profitable growth through
product development, enhanced sourcing efficiencies and expansion into
additional retail outlets and international markets. Barry M is expected to
contribute meaningful revenue to the Group in 2026 and with the Group's
sourcing, logistics and distribution capabilities, offers the potential for
improved margins and further value creation over time.
Customers and Geographies
The largest markets for sales of the Group's brands are retail partners in
continental Europe and the UK, with a nascent presence in the US, coupled with
a rapidly growing online presence. In 2025, the Group's top ten customers
represented 68% of revenues (2024: 72%).
UK
In 2025, revenue from the UK was £38.9 million (2024: £35.0 million), an 11%
increase, and accounted for 37% of Group revenue (2024: 34%). UK revenue
growth was a result of the Brand Architekts acquisition, with both W7 and
Technic contracting, for the reasons noted above.
The top ten UK customers accounted for 72% of UK sales (2024: 82%), with
strong growth from major retailers being offset by overall subdued consumer
spending and a significant customer, Bodycare, ceasing trading. Significant
space growth was achieved in Boots, Superdrug and Tesco, and this should
continue in 2026, accelerated by the acquisition of the Barry M brand. The
Group now supplies the six largest cosmetic retailers in the UK and has
significant potential to grow sales with them.
Europe
Since 2022, continental Europe has been the largest sales region for the
Group. In 2025, Group revenue from Europe was £52.9 million, a decrease of 3%
year on year (2024: £54.7 million), and Europe accounted for 50% of overall
Group sales (2024: 54%). The largest markets for the Group's brands in
continental Europe are Spain, Scandinavia, Turkey, the Netherlands, and Italy,
but with an increasing presence in many other countries in the region. Europe
continues to present growth opportunities, both with existing and new
customers, and particularly in countries where the Group currently has a more
limited presence.
Expansion of the Group's footprint in Europe in 2026 is expected to include a
contribution from Dirk Rossmann in Germany, part of the AS Watson group, which
is launching, as a pilot, a capsule range of W7 products into all of its 2,200
stores from May 2026. If this proves successful, it may open up other markets
within AS Watsons' EU footprint, which is substantial.
US
In 2025, revenue from the US, in sterling terms, was £6.9 million (2024:
£8.7 million), a decrease of 21% and a decrease of 18% in US dollar terms,
and in line with 2023 revenue. This equated to 7% of Group sales (2024: 9%).
Over recent years, significant US sales were generated in the second half of
the year from gifting orders, including a large Christmas order received from
Walmart for the W7 and Chit Chat brands in 2024. In spring 2025, significant
additional import tariffs were imposed by the US administration, particularly
on goods manufactured in China. Whilst the Group looked to mitigate the
effects as far as possible and to navigate the evolving tariff landscape, the
imposition of higher tariffs coincided with the period customers looked to
place orders for the key holiday selling season at the end of the year and
these orders were either not placed or were placed for smaller quantities of
lower cost items.
Despite this backdrop, there were still a number of smaller wins including CVS
expanding the W7 range stocked and conducting a roll-out to a further 399
stores in the second half of 2025, taking the number of CVS stores stocking
the Group's products to 918. In 2026 the Group has received a significantly
improved Christmas order from Walmart and there is increased confidence for
the Group's US prospects now that tariff levels have settled compared to 2025.
Rest of the World
Sales from the rest of the world more than doubled in 2025 to £6.5 million
(2024: £3.2 million), with strong growth in Australia and New Zealand through
both the W7 and Technic brands. Whilst the rest of the world has not been a
primary focus for the Group, the Group has 2026 expansion plans that will see
the launch of W7 into the Indian and certain South American markets.
New Product Development
New product development ("NPD") continues to be core to the Group's
proposition, to provide new products that are exciting, on trend, fast to
market and that meet consumers' evolving tastes.
During 2025, the NPD team continued to develop a strong pipeline of
customer-focused new products. The NPD team works with around 25 manufacturing
partners, in China and globally, that can provide high quality products
quickly, at competitive prices, while meeting the Group's legal and ethical
compliance requirements, together with ensuring continuity of delivery. The
Group continues to investigate new manufacturing partners, particularly
outside of China, to ensure a diversity of supply and to mitigate, as far as
possible, the effects of tariffs increasingly being implemented, particularly
in the US on Chinese manufactured products.
The Group's cosmetic products are 'cruelty free' and are not tested on animals
irrespective of where the products are being supplied. The Group supports
cruelty free alternatives to animal testing to become compulsory and animal
testing overall to cease globally. Warpaint proudly displays the PETA company
logo on its products and its commitment to the PETA 'Beauty without Bunnies
program' covers all brands within the Group, including the newly acquired
Brand Architekt brands, apart from Skin & Tan, which are in the process of
having approval renewed under the Cruelty Free International Leaping Bunny
programme.
Environmental and Social Impact
Warpaint is committed to operating responsibly and ensuring that the Group's
activities have a positive impact on its employees, communities and the
environment. The Group's culture promotes inclusivity, opportunity and
respect, with diversity, equality of pay and opportunity embedded across the
Group. The health, safety and wellbeing of colleagues remains a priority and
management aims to provide an environment in which individuals can develop and
progress within the business.
The Group benefits from a loyal and diverse workforce with relatively low
staff turnover, reflecting a strong culture and the opportunities for
progression available across the business. Colleagues are encouraged to seek
internal advancement wherever possible, with many progressing from operational
roles into administrative and managerial positions. The Group's reward
structure includes share option participation for eligible employees, enabling
staff to share in its long-term success. Open communication is encouraged
through regular departmental meetings and an open-door management culture,
ensuring employees can contribute ideas and feedback. Diversity remains an
important consideration across the organisation, including at board and senior
management level, where a strong representation of female colleagues is
maintained.
Warpaint also seeks to support the communities in which it operates.
Recruiting locally, wherever possible, and working with local suppliers and
trades, helping to support local employment and economic activity. The Group
continues to maintain strong links with academic institutions, particularly
Sunderland University, where members of the regulatory, new product
development and marketing teams provide lectures to students studying cosmetic
science. This engagement helps bridge the gap between academic study and
industry practice, and the Group also offers a gap-year placement to provide
students with practical industry experience.
The Group supports a range of charitable and educational initiatives. We
maintain a long-term partnership with iHeart, which supports young people's
mental health through educational programmes.
Environmental responsibility is an increasingly important focus for the Group.
Warpaint is committed to reducing the environmental impact of its products and
operations and aims to be recognised as a leader in sustainable product design
and packaging within its sector. The Group is proud to be associated with
Plant Mark, which provides a recognised framework for measuring and reporting
carbon emissions. Through this programme the Group measures its carbon
footprint and implements initiatives designed to reduce emissions, stay ahead
of evolving environmental regulation and ensure transparent communication of
sustainability performance.
The Group's product teams continue to focus on reducing packaging waste and
improving recyclability across our ranges. The Group uses recyclable plastics
in the outer packaging of its gifting products and continues to remove
unrecyclable plastics from year-round ranges wherever possible. Paper and
cardboard packaging are used wherever practicable to enable effective
recycling by both retailers and consumers.
Across the Group's branded portfolio, all products are manufactured to be
vegan friendly and free from parabens. No heavy metals or ingredients of
concern are added, and all raw materials comply with the strict regulatory
requirements applicable in the UK, EU, US, Canada and other international
markets in which the Group operates. Through these initiatives, Warpaint aims
to ensure its products meet high environmental and ethical standards while
continuing to deliver accessible and inclusive beauty products for consumers
worldwide.
Marketing and PR
The Group has a highly focused, product-led marketing and PR strategy built
around the strength of its brands, targeting value-conscious consumers seeking
on-trend, high-quality cosmetics at accessible price points. The Group's
approach prioritises digital and social media engagement, appropriate
influencer partnerships and rapid reaction to emerging beauty trends, allowing
new products to be promoted efficiently across multiple territories. Marketing
activity is closely aligned with retail partners and distributors to maximise
in-store visibility and online conversion, while PR and brand communications
emphasise the Group's vegan-friendly formulations, responsible ingredient
standards and evolving sustainability credentials. This disciplined,
cost-effective approach enables Warpaint to build strong brand recognition and
customer loyalty, while maintaining a relatively lean marketing spend compared
with larger global cosmetics companies.
Strategy
On an annual basis, the board reviews and adapts its three-year strategic plan
for the business based on consumer insight, market data, experience and the
Group's aims. This is targeted by year, measured, monitored and reviewed as
part of the board's on-going business throughout the year. The strategic plan
was most recently updated in February 2026, forming the basis of the Group's
focused activity through to 2028. The plan is developed to drive shareholder
value and has defined targets for sales by the six key pillars below, EBITDA,
earnings per share and cash generation, with a particular emphasis on driving
incremental EBITDA growth.
The strategic plan comprises six key pillars:
· Develop and build the Group's brands and ensure new product
development reflects trends and consumer needs
Continually review, evaluate and develop the Group's brand portfolio,
including: maintaining a clear brand hierarchy and brand positioning; full,
regular new product development reviews to determine market price and profit;
create franchises within brands; and continued monitoring of brand and product
proliferation, allowing focus on core products.
· Develop and nurture current business
There is still significant growth potential to be realised and further
distribution gains across the Group's brands to be made with current
customers. The Group is committed to ensuring this potential is maximised,
focusing on maintaining continued sales momentum, growing a multi brand
presence across the customer base, all the while improving productivity by
optimising retail space allocated to each brand and increasing cross-selling
across the range and Group brands.
· Grow market share in the UK: 75/25 Plan
The Group now has a presence in the key UK high street and grocery chains.
Significant growth opportunities exist by continuing to focus on increasing
the presence of the Group's brands across the channels in which our consumers
shop, thereby increasing accessibility and driving profitable market share
growth. This includes increasing the number of stores selling Warpaint brands,
increasing the number of Group brands sold in these customers, as well as
increasing the shelf space within stores. This will be achieved by targeting
legacy brands, aiming to improve productivity by maximising return on
investment from acquired retail space. The Group will also look to achieve
category expansion, using data insights to introduce new product categories,
and increase brand penetration in its existing customer base.
· Grow market share in the US and the rest of the world
The US continues to provide major long-term growth opportunities for the Group
and there are other markets globally that have great potential. Following the
US tariff challenges in 2025, the market is expected to return to greater
normality in 2026. The US growth strategy is data and case study led to drive
sustainable, profitable growth. As in other markets, the Group will utilise
the appropriate brands for the appropriate channels, utilising gifting,
accessories and potential exclusives to gain access.
Meanwhile, elsewhere in the world the Group will develop and grow existing
relationships and look to expand into new markets with the necessary scale for
sustainable, profitable growth, utilising, where possible existing
relationships with Customers who participate in multiple geographical markets.
· Develop the online/e-commerce strategy for brand development and
profitable sales
Warpaint aims to grow and maximise profitable sales across the Group's Direct
to Consumer ("D2C") channels. As well as continuing to sell on its own
websites, Tik Tok shop and developing its own consumer community, plans
continue to be executed to develop sales across Amazon platforms, globally.
Further on-line sales platforms and geographies continue to be evaluated and,
where profitable opportunities are identified, launched over the course of the
three-year plan.
The Group continues to develop and build its brands by utilising brand
ambassadors, influencers and make-up artists to engage actively with its
target audience, as well as trialling exclusive and targeted lines, and
streamlining operations commensurate with the scale of the ecommerce business.
The Group also seeks to focus its sales efforts on full price e-tailers.
· Develop and implement appropriate strategies that ensure Warpaint
reduces its impact on the environment
Warpaint recognises consumers', customers' and its own requirement to reduce
its environmental impact. The business has already implemented a number of
initiatives to reduce its environmental footprint via reduced shipping and
road mileage; removing plastics where possible from packaging and improving
recyclability; removing parabens from ingredients and ensuring all products
are manufactured cruelty free and marketed with the PETA logo on packaging and
displays. Further initiatives have been identified, targeted and will be
implemented across the course of the three-year plan. Further information is
contained within the ESG section of the annual report.
Summary and Outlook
During the year, we made significant operational progress across the business.
A key achievement was the successful integration and turnaround of Brand
Architekts. As a result of the actions taken, Brand Architekts generated an
adjusted EBITDA profit in its first full year within the Group, delivering a
positive contribution compared with the losses reported prior to acquisition.
This represents an important milestone and demonstrates the Group's ability to
acquire, integrate and improve underperforming businesses. Further
improvements are being made to the Brand Architekts portfolio in 2026 that are
expected to benefit margin, particularly in H2 2026 and into 2027.
Across our brands, we continued to strengthen our retail relationships and
expand distribution. In the UK, we deepened our partnerships with leading
retailers including Tesco, Superdrug and Boots. During the year we rolled out
a significant Christmas gifting range with Boots and extended our presence
into additional product categories. Our relationships with the UK's major
beauty retailers now provide the Group with a strong platform for future
growth.
Internationally, trading conditions remained challenging. In the US, tariff
uncertainty during the year created a degree of disruption to ordering
patterns from certain retailers, particularly restricting Christmas orders,
although we retained key relationships including Walmart, CVS and Five Below.
In Europe, weaker consumer demand and changes in purchasing strategies from
certain customers impacted sales. Nevertheless, the Group continued to expand
its geographic reach, securing new retail partners and growing its presence in
a number of international markets, including Australia and New Zealand.
While revenues were affected by subdued consumer confidence, underlying demand
for the Group's brands remained encouraging. In several instances volumes
increased year-on-year, with consumers increasingly favouring lower price
points within the product range as they adjusted spending patterns in response
to broader economic pressures.
Following the year end, the Group completed the acquisition of the
well-established cosmetics brand Barry M. This acquisition represents an
attractive opportunity to expand the Group's brand portfolio. Barry M is a
recognised brand with strong distribution in the UK beauty market and offers
significant opportunities for growth through both expanded retail distribution
and product development. The brand will also benefit from the Group's sourcing
capabilities, operational infrastructure and international distribution
network.
The Group entered 2026 with a solid balance sheet, strong retail partnerships
and a portfolio of established brands. Whilst the difficult trading
environment experienced in 2025 continued in Q1 2026 and the global economic
environment remains uncertain, some signs of recovery have been seen more
recently. A number of initiatives undertaken during 2025, including new
product launches, retail rollouts and international opportunities, are
expected to contribute to growth in 2026, particularly in the second half of
the year and into 2027, and the board remains confident in the long-term
prospects of the business.
Overall, the Group remains a profitable, cash-generative and well-capitalised
business with significant operational resilience. While market conditions
remain challenging, the progress made during the year leaves us well
positioned to capitalise on opportunities as trading conditions improve.
Sam Bazini
Chief Executive Officer
28 April 2026
CHIEF FINANCIAL OFFICER'S REVIEW
2025 was a challenging year for the Group resulting in lower revenue and
profit than expected at the start of the year. In the UK, uncertainty around
economic issues and cost of living increases had a knock-on effect on consumer
confidence and willingness to spend, resulting in a major customer of the
Group entering administration. In addition, the US market saw significant
uncertainty due to volatile import tariffs. Trading in our Rest of the World
segment was more positive, seeing revenue more than double as a result of good
sales progress in Australia and New Zealand. We took the decision to modestly
increase prices in the first half of the year, which, amongst other actions
taken, underpinned the fifth year running that gross margin has improved.
Post year end, on 9 February 2026, the Group acquired the Barry M brand,
including its IP, stock and order book, but excluding the manufacturing
capabilities and any liabilities, out of administration, for a cash
consideration of £1.4 million, from existing cash resources. Further
commentary and rationale for the acquisition is contained in the CEO's
statement.
The Group continues its strategy of building its brands, and remains focused
on margin, generating cash and remaining debt free.
The Group monitors its performance using a number of key performance
indicators, which are agreed and monitored by the board.
*Adjusted numbers are closer to the underlying cash flow performance of the
business, which is regularly monitored and measured by management, the
adjustments made to EBITDA are shown below:
£m Year ended 31 Dec 2025 Year ended 31 Dec 2024
Statutory profit from operations 18.49 24.00
Depreciation 1.27 0.93
Depreciation of right of use assets 1.52 1.27
Amortisation of intangible assets 0.29 0.03
Foreign exchange loss/(gain) 2.23 (2.00)
EBITDA 23.80 24.23
Gain on bargain purchase (4.52) -
Exceptional items 1.39 0.42
Share based payments 0.62 0.35
Adjusted EBITDA 21.29 24.99
Headline results, shown above, represent the performance comparisons between
the consolidated statements of income for the years ended 31 December 2024 and
31 December 2025.
Revenue
Group revenue for 2025 increased by 3.4% to £105.1 million (2024: £101.6
million). On a like-for-like basis, excluding sales generated by Brand
Architekts in the period, revenue was £93.3 million.
In 2025, certain events negatively impacted group sales that were one off and
exceptional in the ordinary course of business, and impacted H2 2025
specifically. In the US, tariff volatility disrupted the placing of gift
orders and some regular day to day business causing the loss of approximately
£2.4 million of sales, and Bodycare, a large customer for the Technic brand,
went into administration causing the loss of £3.3 million of sales.
Company branded sales were £101.0 million (2024: £95.1 million). The W7
brand generated sales in the year of £63.9 million (2024: £65.4 million),
the Technic portfolio of brands, excluding sales of retailer own brand white
label cosmetics, contributed sales of £25.3 million (2024: £29.7 million),
while sales from the Brand Architekts portfolio from 12 February 2025 to the
end of 2025 were £11.8 million.
In 2025, sales of white label cosmetics were £1.6 million (2024: £4.3
million). The white label business is traditionally cost competitive and is
only undertaken based on commercial viability, in particular margin.
Close-out sales were marginally higher than last year at £2.5 million (2024:
£2.3 million), the Group strategy remains to reduce its focus on close-out
opportunities, whilst still taking advantage of those that are of a good net
margin.
The major regions for Group sales are Europe, the UK, and the US. In Europe,
sales were £52.9 million (2024: £54.7 million) a decrease of 3.3%. In the
UK, sales of £38.9 million (2024: £35.0 million) increased by 11.0%, as a
result of the inclusion of Brand Architekt sales.
In the US, Group sales decreased by 20.8% to £6.9 million (2024: £8.7
million), which, in US dollar terms, was a decrease of 18.2%, to US$9.1
million (2024: US$11.1 million). This was because of significantly higher
tariffs imposed in Q2 2025, when retailers were looking to place orders for
the December holiday season, resulting in lost business and consequently an
Adjusted EBITDA loss for the year of US$0.6 million (2024: profit US$1.3
million). Tariffs have reduced significantly since 2025 and now remain
relatively settled, so that management expect the US business to return to
profitability in 2026 and have calculated that the tariffs will have no
material impact on the business as a whole, or the carrying value of the
goodwill in its US entity.
Sales to the rest of the world were £6.5 million (2024: £3.2 million), up
100.8%.
E-commerce sales were up by 38% to £11.6 million, representing 11.0% of Group
revenue (2024: £8.4 million/8.3%). Brand Architekts in the period generated
£2.7 million of e-commerce sales.
Product Gross Margin
Gross margin was 42.6% for the year compared to 41.2% in 2024.
This is the fifth year in a row that gross margin has improved incrementally.
A modest inflationary price increase undertaken in the first half of the year,
new product development, increased scale of orders to suppliers, and sourcing
product from new factories helped to achieve the gross margin improvement in
2025. Also contributing to the improvement in gross margin are more normalised
annual freight rates compared to prior years and an improved exchange rate for
GBP against the US$.
In 2025, the proportion of Group revenue from Group branded portfolio, which
overall achieves a higher margin than close-out sales and retailer own brand
white label sales, was 96% (2024: 94%) as a result of significantly lower
white label product and increased branded product following the acquisition of
Brand Architekts. Group brand sales include all-year-round colour cosmetics,
health, beauty and skincare and gifting, which is sold at a more competitive
margin than all-year-round products. Gifting sales in 2025 grew slightly but
remained at the same percentage of overall Group brand sales and therefore
made little impact to the overall margin achieved by the Group in the year.
We remain focused on improving gross margin where possible in all our
businesses and are working with our Asian business units to execute this.
Margins are also benefiting from the increased scale of our orders placed with
existing suppliers as the business grows but at the same time, we continue to
move some production to new factories of equal quality to retain or improve
margin and have a partial natural hedge from our US dollar revenue.
At 31 December 2024, forward foreign exchange contracts were in place for the
purchase of US$57 million at an average exchange rate of US$1.2912/£, this
helped to protect our margin in 2025. During 2025, we purchased more forward
foreign exchange contracts to further help protect our gross margin in 2025
and into 2026. At 31 December 2025, forward foreign exchange contracts were in
place for the purchase of US$81 million at an average exchange rate of
US$1.3416/£.
The currency options we have for the current year, along with new product
development and sourcing strategies, will all contribute to protecting our
gross margin in 2026.
Operating Expenses
Total operating expenses before exceptional** items (exceptional items include
directly attributable acquisition costs, restructuring costs and other one-off
costs as a result of the acquisition of Brand Architekts), amortisation costs,
depreciation, foreign exchange movements and share-based payments, were £22.5
million in the year, or 21.45% of revenue (2024: £16.9 million/16.6%). On a
like-for-like basis, excluding Brand Architekts in the period, operating
expenses were £18.6 million, and as a percentage of sales, excluding those
sales of Brand Architekts in the period, they were 20.0%.
The absolute increase of £1.7 million year-on-year was made up of increases
in wages and salaries, business rates, the spend on PR and marketing as
e-commerce sales continue to grow, legal and professional fees, and the cost
of a larger US sales team that was put in place in late 2024, all of which are
necessary to support the growth of the business.
There was also an impairment of financial assets in the year, being a bad debt
provision following the administration of Bodycare in 2025 and the
administration of The Original Factory Shop in early 2026. The bad debt charge
for the year was £1.0 million (2024: £nil).
Warpaint remains a business with relatively fixed operating expenses evenly
spread across the whole year. We continue to monitor and examine major costs
to ensure they are controlled and strive to reduce them. In addition, the
increased scale of the business continues to give the Group increased buying
power on certain scalable costs.
** Exceptional items are those which, in the directors' judgement, should be
disclosed separately by virtue of their size, nature, or incidence to enable a
full understanding of the group's financial performance
Adjusted EBITDA
The board considers Adjusted EBITDA (adjusted for share-based payments, the
gain on bargain purchase, and exceptional items) a key indicator of the
performance of the Group and one that is more closely aligned to the
underlying performance of the business. Adjusted EBITDA for the year was
£21.3 million (2024: £25.0 million).
£m Year ended 31 Dec 2025 Year ended 31 Dec 2024
Statutory profit from operations 18.49 24.00
Depreciation 1.27 0.93
Depreciation of right of use assets 1.52 1.27
Amortisation of intangible assets 0.29 0.03
Foreign exchange loss/(gain)*** 2.23 (2.00)
EBITDA 23.80 24.23
Gain on bargain purchase (4.52) -
Exceptional items 1.39 0.42
Share-based payments 0.62 0.35
Adjusted EBITDA 21.29 24.99
***Foreign exchange loss in the year totalled £2.23 million, of which £0.13
million was unrealised losses of forward foreign exchange contracts in place
at 31 December 2025.
Profit Before Tax
Group profit before tax for the year was £18.1 million (2024: £23.8
million). A reconciliation between profits in 2025 and 2024 is shown below:
£m Effect on Profit
Sales volume growth 1.6
Margin growth 1.6
Increase in operating expenses (detailed above) (5.6)
Impairment of financial assets (bad debt charge) (1.0)
Foreign exchange loss in 2025 £2.2m (2024: gain £2.0 million)*** (4.2)
Exceptional items (1.0)
Gain on bargain purchase - Brand Architekts 4.5
Amortisation of intangible assets (0.5)
Share-based payments (0.3)
Depreciation of right-of-use assets, and property, plant and equipment (0.6)
Other items (0.2)
Change in profit before tax between 2025 and 2024 (5.7)
***Foreign exchange loss in the year totalled £2.23 million, of which £0.13
million was unrealised losses of forward foreign exchange contracts in place
at 31 December 2025.
Tax
The tax rate for the Group for 2025 was 20.72% compared to the average UK
corporation tax standard rate of 25.0% for 2025. Since the acquisition of LMS,
the Group is exposed to tax in the USA at an effective rate of approximately
25% and in other jurisdictions the Group operates cost centres, but these are
not materially exposed to changes in tax rates.
Earnings Per Share
The statutory basic and diluted earnings per share were 17.77p and 17.73p,
respectively, in 2025 (2024: 23.47p and 23.34p).
The adjusted basic and diluted earnings per share before exceptional items,
amortisation costs, share-based payments, gain on bargain purchase, foreign
exchange loss, and the tax attributable to adjusting items in the year were
16.68p and 16.65p respectively in 2025 (2024: 22.28p and 22.16p).
£m Year ended 31 Dec 2025 Year ended 31 Dec 2024
Statutory profit attributable to equity holders 14.35 18.23
Exceptional items 1.39 0.42
Amortisation of intangible assets 0.29 0.03
Share-based payments 0.62 0.35
Gain on bargain purchase (4.52) -
Foreign exchange loss/(gain)*** 2.23 (2.00)
Tax attributable to adjusting items (0.88) 0.29
Adjusted profit attributable to equity holders 13.48 17.32
Weighted number of ordinary shares for the purpose of basic EPS 80,774,765 77,691,505
Adjusted basic EPS 16.68p 22.28p
Weighted number of ordinary shares for the purpose of diluted EPS 80,951,523 78,124,762
Adjusted diluted EPS 16.65p 22.16p
***Foreign exchange loss in the year totalled £2.23 million, of which £0.13
million was unrealised losses of forward foreign exchange contracts in place
at 31 December 2025.
Dividends
The board is recommending a final dividend for 2025 of 9.0 pence per share,
making a total dividend for the year of 13.0 pence per share of which 4.0
pence per share was paid on 21 November 2025 (2024: Total dividend of 11.0
pence per share, of which the interim dividend was 3.5 pence per share and the
final dividend was 7.5 pence per share). The dividend for the year is covered
1.28 times by adjusted earnings per share.
Cash Flow and Cash Position
The Group's year end cash balance decreased by £5.9 million to £16.0 million
(2024: £21.9 million, which included restricted cash of £14.0 million held
in an escrow account, released in February 2025 and utilised in the
acquisition of Brand Architekts). Net cash, excluding the restricted cash at
31 December 2024, increased £8.1 million in the year, having acquired £6.0
million of cash as a result of the Brand Architekts acquisition.
Net cash flow generated from operating activities was £14.3 million (2024:
£9.2 million). The cash generated was principally used to fund working
capital, make dividend payments in the year, and for the acquisition of Brand
Architekts.
We expect the capital expenditure requirements of the Group to remain low.
However, as part of our strategy to grow market share in the UK, Europe and
US, there will be occasions where investment in store furniture for customers
is required to secure business.
In 2025, £2.2 million (2024: £2.2 million) was spent on store furniture, new
computer software and equipment, warehouse improvements and other general
office fixtures and fittings and plant upgrades. Warehouse improvements
included the preparation of a 94,000 sq. ft. warehouse to store and distribute
the Technic and Brand Architekts brands when existing third party logistic
arrangements come to an end.
As the Group continues to grow, it is both necessary and prudent to have bank
facilities available to help fund day-to-day working capital requirements.
Accordingly, the Group maintains an £8.0 million invoice and stock finance
facility (2024: £9.5 million), and a 'general purpose' £1.0 million facility
(2024: £5.0 million); both facilities were reduced at the Company's request
during 2025. At the year end, both facilities were unused and the balance
outstanding was £nil (31 December 2024: £nil). These facilities, together
with the Group's positive cash generation and cash balances, ensure that
future growth can be comfortably funded.
Share Options
No options over ordinary shares were exercised or granted by the Company in
2025. The share-based payment charge of the EMI and CSOP share options for the
year was £0.62 million (2024: £0.35 million) and has been taken to the share
option reserve.
Exceptional Items
Exceptional** costs in 2025, which were directly attributable acquisition
costs, restructuring costs and other one-off costs as a result of the
acquisition of Brand Architekts, totalled £1.39 million and included £0.64
million of direct acquisition-related costs, £0.57 million of staff
redundancy costs, and £0.18 million of restructuring and other costs (2024:
£0.42 million of acquisition-related costs).
** Exceptional items are those which, in the directors' judgement, should be
disclosed separately by virtue of their size, nature, or incidence to enable a
full understanding of the group's financial performance.
Balance Sheet
Inventory was £0.2 million higher at the year end at £31.4 million (2024:
£31.2 million). Included in the inventory total at 31 December 2025 is £3.2
million of Brand Architekts product. The level of inventory supports growth of
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 £0.60 million, 1.9% at the year-end
(2024: £0.42 million, 1.3%), the increase being partly as a result of the
acquisition of Brand Architekts. Across the Group we endeavoured to sell
through older stock lines, allowing for our provision for old and slow
inventory to remain modest in percentage terms. To better manage the Group
businesses as growth continues, the stock provision policy has been amended to
now apply a flat 1.3% charge across the Group's total stock value, plus a
provision for specific stock items that are slow moving or being sold at less
than cost, instead of tracking the specific age of individual items (under the
previous policy the provision for old and slow inventory at 31 December 2025
would have been £0.69 million). However, we remain confident that many such
items will ultimately be sold, in the normal course of business, through our
close-out operations without a loss to the Group. The 1.3% value was derived
after examining the running average of the Group stock provision for the
previous four years, being 2021 to 2024.
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. At the year
end, trade receivables, excluding other receivables, were £17.1 million
(2024: £13.6 million). The Brand Architekts business trade receivables at 31
December 2025 were £3.4 million. The provision for bad and doubtful debts
carried forward at the year-end was £0.15 million, 0.9% of gross trade
receivables (2024: £0.09 million, 0.6%). Despite an unusually high bad debt
charge in 2025, management have assessed the year end trade receivables
balance, net of provision and consider it to be fully recoverable.
At year end, the Group had no borrowings outstanding (2024: £nil), apart from
those associated with right-of-use assets as directed by IFRS 16 (see below).
The Group was therefore debt free at the year end.
Working capital decreased by £2.3 million in the year to £61.1 million
(2024: £63.4 million).
The main components were an increase in inventory of £0.2 million, an
increase in trade and other receivables of £3.6 million, a decrease in cash
at the year-end of £5.9 million, and an increase in trade and other payables
of £0.4 million. Other items contributed an increase of £0.2 million.
Free cash flow (cash from operating activities less capital expenditure)
remained strong at £12.2 million (2024: £6.9 million).
The Group's balance sheet remains in a very healthy position. Net assets
totalled £80.4 million at 31 December 2025, an increase of £7.1 million from
2024. Most of the balance sheet is made up of liquid assets of inventory,
trade receivables and cash. Included on the balance sheet is £7.3 million of
goodwill (2024: £7.3 million) and £4.3 million of intangible fixed assets
(2024: £0.1 million), the increase in the year is as a result of the value of
the Brand Architekts' brands and customer lists acquired. At the year-end,
cash totalled £16.0 million (31 December 2024: £21.9 million, including
restricted cash of £14.0 million held in an escrow account and utilised for
the acquisition of Brand Architekts in February 2025).
Goodwill represents the excess of consideration over the fair value of the
Group's share of the net identifiable assets of acquired businesses / cash
generating units at the date of acquisition. The carrying value at 31 December
2025 of £7.3 million included Treasured Scents Limited at £0.5 million,
Retra Holdings Limited at £6.2 million and Marvin Leeds Marketing Services,
Inc. at £0.6 million. Management has performed the required annual impairment
review at 31 December 2025 and 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 £9.5 million (2024: £4.1 million) of
right-of-use assets, which is the inclusion of Group leasehold properties,
recognised as right-of-use assets as directed by IFRS 16. An equivalent lease
liability is included of £9.8 million (2024: £4.2 million) at the balance
sheet date. The increase relates to the new 94,000 sq. ft. warehouse discussed
above.
Foreign Exchange
The Group currently 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 foreign exchange contracts when rates are deemed favourable,
and with consideration for the budget rate set by the board for the year.
Similarly, forward foreign exchange contracts are taken to sell forward our
expected Euro income in the year to ensure our sales margin is protected.
We started 2025 with forward foreign exchange contracts in place for the
purchase of US$57 million at an average exchange rate of US$1.2912/£, and the
sale of €2.3 million at €1.1627/£. During 2025 when currency rates were
favourable, we purchased additional US dollar forward foreign exchange
contracts and spot rate amounts to cover our total US dollar requirement for
the year.
In addition, during 2025 we purchased forward foreign exchange contracts to
help protect the Group's gross margin in 2026. At 31 December 2025, forward
foreign exchange contracts were in place for the purchase of US$80.6 million
at an average exchange rate of US$1.3417/£, and the sale of €0.75 million
at €1.1414/£.
There was a foreign exchange loss in the period of £2.23 million (2024: gain
of £2.00 million), of which £0.13 million was unrealised losses of forward
foreign exchange contracts in place at 31 December 2025 (2024: unrealised
gains of £1.34 million).
The Group additionally has a natural hedge from sales to the US, which are
entirely in US dollars, in 2025 these sales were US$9.1 million (2024: US$11.1
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 to a large extent the effect of a
strong US dollar against sterling.
Acquisition of Brand Architekts
On 12 February 2025, the Company completed the acquisition of 100% of the
ordinary shares of Brand Architekts for £13.34 million in cash and the issue
of 103,422 Warpaint shares at £5.24 per share, making a total purchase
consideration of £13.88 million (the "Acquisition"). Including legal and
professional fees, the total purchase price of the Acquisition was £14.94
million, of which £0.42 million was incurred in 2024.
The Acquisition has been accounted for using the acquisition method of
accounting in accordance with IFRS 3. Management has completed the process of
allocating the purchase price. The Acquisition is considered a "bargain
purchase" because the final assessed fair value of the assets acquired of
£18.40 million was greater than the purchase price of £13.88 million,
resulting in negative goodwill of £4.52 million. Further details are shown in
note 12.
The Acquisition included a defined benefit occupational pension scheme, which
has been closed to new members since 2015. The scheme will have its next
triannual valuation in April 2026. The triennial valuation is a mandatory,
legal, actuarial assessment of a defined benefit pension scheme's financial
position conducted every three years. It calculates the difference between
assets and liabilities to determine if the scheme is properly funded and
determines the employer contribution rates needed. Current independent
valuations undertaken for the Company indicate the scheme is in surplus, such
that its assets exceed pension liabilities. The scheme surplus at 31 December
2025 has been valued at £3.3 million (30 June 2024: £0.8 million, 12
February 2025: £1.5 million) and has been included as an asset in the balance
sheet. Under the rules of the scheme, the Company has an unconditional right
to a refund of surplus under the principles of IFRIC 14 where the Company
elects to "run-off" the Scheme until there are no liabilities left to be paid
and only assets remain before choosing to terminate allowing the Trustees and
Employer to wind-up the Scheme. The Company has therefore recognised a surplus
in full as at 31 December 2025. No additional minimum funding liability has
been recognised in relation to the Company's ongoing deficit reduction
contributions to the Scheme as the surplus is unrestricted. Further details
are shown in note 13.
Sale of Brands in the Year
On 27 June 2025, The Brand Architekts Limited (a wholly owned subsidiary of
Warpaint London PLC) sold all the inventory and intellectual property relating
to three of its brands, Mr Expert Solutions, The Solution, and Kind Natured.
These had an intangible value of £0.153 million. Total consideration was
£0.823 million. At the same time certain Christmas brands acquired within
Brand Architekts were discontinued, these had an intangible value of £0.121
million, this amount being written off in full. The brands Mr Expert
Solutions, The Solution, Kind Natured and the Christmas brands were not
considered critical to the ongoing strategy of the Group business. Overall,
this disposal of brands and inventory resulted in a small gain of £1,000.
Business Disposal
On 12 September 2025, InnovaDerma Limited (a wholly owned subsidiary of
Warpaint) sold 100% of the share capital in its Australia subsidiary
InnovaDerma AUS & NZ Pty Ltd, which sold men's beauty and healthcare
products in Australia and New Zealand, under the brand name Charles & Lee.
On acquisition of the Brand Architekts business no value was attributed to the
brand Charles & Lee as the company in Australia had been loss making for
several years. After the acquisition of Brand Architekts an offer was received
for the InnovaDerma AUS & NZ Pty Ltd business including the brand name
Charles & Lee, which was accepted by Warpaint. The result was a loss of
£44,000 compared to the net assets of the business at the date of completion,
which was charged to exceptional items in the year.
Post Balance Sheet Events
On 9 February 2026, the Group acquired the Barry M brand, including its IP,
stock and order book, but excluding the manufacturing capabilities and any
liabilities, out of administration, for a cash consideration of £1.4 million,
from existing cash resources.
Section 172(1) Statement
The directors are well aware of their duty under section 172 of the Companies
Act 2006. Further information on how the directors have had regard to the
Section 172(1) Matters can be found in the Section 172 Report (Engagement with
Stakeholders).
Strategic Report - Risk Management
Warpaint is exposed to a variety of risks that can have financial, operational
and regulatory impacts on the Group's business performance. The board
recognises that creating shareholder returns is the reward for taking and
accepting risk. The effective management of risk is therefore critical to
supporting the delivery of the Group's strategic objectives.
Risk Risk Level Movement
Currency / Foreign Exchange ("FX") Medium Unchanged
Due to the Group's goods being manufactured outside of its key trading areas
and its extensive export business from the UK, it both generates revenues and
incurs manufacturing costs in foreign currencies. As a result, the Group is
exposed to the risk that adverse exchange rate movements cause the value
(relative to its reporting currency) of its revenues to decrease, or costs to
increase, resulting in reduced profitability.
Management continues to review the Group's hedging policy to ensure it remains
appropriate while it increases its international business. There is a Group FX
committee made up of senior management who communicate regularly. Whenever
possible foreign currency is purchased (using forward foreign exchange
contracts) at, or as close as possible to, the budget rate to cover the annual
needs of the business.
Reliance on Key Suppliers Medium Unchanged
In 2025, one key supplier from China was responsible for approximately 13.5%
(2024: 17.3%) of the Group's branded colour cosmetics. This is the first time
since IPO to AIM that the key supplier percentage has fallen below 14.0% as we
continue to source from new suppliers. If there were some catastrophic event
that reduced or stopped deliveries from this key supplier, management would be
able to place orders with other existing suppliers. However, this would take
several months to implement and such an event would therefore have a material
adverse effect on the Group's financial position, results of operations and
future prospects.
Management retains close relations with suppliers with relatively short lead
times, and the Group typically holds four to six months of inventory at any
one time, nevertheless the sourcing of new suppliers in a wider geographic
location is ongoing.
Product Liability Medium Unchanged
All products are manufactured in facilities approved by relevant authorities.
The ingredients in each product are compliant with and meet the relevant
standards required by the markets to which the products will be sold into.
There is however always the risk that an end user could have an allergic or
other reaction to an individual product leading to the possibility of
compensation claims and potentially damaging the good reputation of the
Group's brands.
Management has every colour cosmetic ingredient independently checked by a
qualified chemist for compliance with UK, EU, US regulations and when
necessary, any other relevant legislation, and maintain adequate product and
public liability insurance to ensure that any claims have little impact on the
Group's profitability.
Significant Customers Medium Unchanged
The Group has one customer in Denmark with over 1,000 stores across Denmark,
Norway, Sweden, the Netherlands, France, Finland, Portugal, Spain, Italy and
Ireland. In 2025 this customer represented 29.4% (2024: 27.2%) of Group
revenue. We currently have an excellent working relationship with this
customer who has a significant awareness of Warpaint's brands.
Management believes that, should the customer decide not to sell our brands, a
large amount (if not all) of the existing business will be taken up by other
retailers in the countries in which the customer operates, given that the
brands are now established in the respective markets.
Cyber Attacks Medium Unchanged
There is an increasing risk that cybercrime will cause business interruption,
loss of key systems, loss of online sales, theft of data or damage to
reputation.
The Group regularly reviews, tests and invests in the development and
maintenance of its IT infrastructure, systems and security. There is in place
disaster recovery and business continuity plans that are tested annually. The
Group has a password policy in place and utilises Multifactor Authentication
(MFA) before access is granted to its systems and data.
Tariffs High Unchanged
The global trade environment has been shaped by significant tariff escalations
and other macroeconomic and geopolitical events throughout 2025, with some
volatility continuing in 2026. Tariffs have increased the costs of goods
imported into the US that are made in China, impacting gross margins and sales
growth in the US.
Management have calculated that tariffs will have no material impact on the
business as a whole, or the carrying value of the goodwill in its US entity.
To mitigate for tariff increases, management can increase prices, in
particular online which is a major element of US sales. New product developed
with tariffs incorporated into the costing can maintain margin. There is
potential to manufacture approximately 12 products that form the bulk of the
range sold in the US, in the UK and other geographic locations less affected
by tariffs.
This information forms part of the strategic report and has been approved for
issue by the board on 28 April 2026.
Neil Rodol
Chief Financial Officer
28 April 2026
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
Year ended 31 December
2025 2024
Note £'000 £'000
Revenue 2 105,082 101,607
Cost of sales 2 (60,343) (59,739)
Gross profit 44,739 41,868
Administrative expenses 3,4 (29,783) (17,921)
Impairment (loss)/gain on financial assets (995) 39
Gain on bargain purchase 12 4,524 -
Profit from operations 18,485 23,986
Finance expense 5 (625) (341)
Finance income 5 242 116
Profit before tax 18,102 23,761
Tax expense 6 (3,750) (5,528)
Profit for the year attributable to equity holders of the parent company 14,352 18,233
Item that will not be reclassified to profit or loss:
Re-measurement of defined benefit liability 13 1,085 -
Item that will or may be reclassified to profit or loss:
Exchange gain on translation of foreign subsidiary (41) 11
Total comprehensive income attributable to equity holders of the parent 15,396 18,244
company, net of tax
Basic earnings per share (pence) 27 17.77 23.47
Diluted earnings per share (pence) 27 17.73 23.34
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2025
As at 31 December
2025 2024
Note £'000 £'000
Non-current assets
Goodwill 8 7,274 7,274
Intangibles 9 4,318 90
Property, plant, and equipment 10 3,373 2,527
Right-of-use assets 11 9,513 4,073
Deferred tax assets 19 1,221 568
Retirement benefit surplus 13g 3,339 -
Total non-current assets 29,038 14,532
Current assets
Inventories 14 31,351 31,192
Trade and other receivables 15 19,957 16,336
Corporation tax recoverable 1,850 273
Cash and cash 16 15,985 21,887
equivalents
Derivative financial instruments 25 - 1,340
Total current assets 69,143 71,028
Total assets 98,181 85,560
Current liabilities
Trade and other payables 17 (7,883) (7,630)
Lease liabilities 18 (1,275) (1,326)
Derivative financial instruments 25 (129) -
Total current liabilities (9,287) (8,956)
Non-current liabilities
Lease liabilities 18 (8,541) (2,919)
Deferred tax liabilities 19 - (391)
Total non-current liabilities (8,541) (3,310)
Total liabilities (17,828) (12,266)
NET ASSETS 80,353 73,294
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2025
2025 2024
£'000 £'000
Equities
Share capital 21 20,197 20,171
Share premium 34,114 34,114
Merger reserve (15,584) (16,100)
Foreign exchange reserve (8) 33
Share based payment reserves 23 1,041 652
Retained earnings 40,593 34,424
TOTAL EQUITY 80,353 73,294
The financial statements of Warpaint London plc were approved and authorised
for issue by the Board of Directors and were signed on its behalf by:
Neil Rodol
Chief Financial Officer
Date: 28 April 2026
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER
2025
Share Capital Share Premium Merger Reserve Foreign exchange reserve Share based payment reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 31 December 2023 19,314 19,726 (16,100) 22 594 23,249 46,805
Comprehensive Income for the year
Profit for the year - - - - - 18,233 18,233
Other comprehensive income:
Exchange gain arising on translation of foreign subsidiaries - - - 11 - - 11
Total comprehensive income for the year - - - 11 - 18,233 18,244
Contributions by and distributions to owners
Equity shares issued (note 21) 857 14,835 - - - - 15,692
Share issue costs (note 21) (447) (447)
Transfer to retained earnings for exercised share options - - - - (321) 321 -
Deferred tax movement - - - - 30 - 30
Share based payment charge - - - - 349 - 349
Dividends paid - - - - - (7,379) (7,379)
Total contributions by and distributions to owners 857 14,388 - - 58 (7,058) 8,245
As at 31 December 2024 20,171 34,114 (16,100) 33 652 34,424 73,294
Comprehensive Income for the year
Profit for the year - - - - - 14,352 14,352
Other comprehensive income:
Exchange gain arising on translation of foreign subsidiaries - - - (41) - - (41)
Remeasurement of defined benefit liability (note 13) - - - - - 1,085 1,085
Total comprehensive income for the year - - - (41) - 15,437 15,396
Contributions by and distributions to owners
Equity shares issued (note 21) 26 - 516 - - - 542
Transfer to retained earnings for expired share options - - - - (23) 23 -
Deferred tax movement - - - - (208) - (208)
Share based payment charge - - - - 620 - 620
Dividends paid - - - - - (9,291) (9,291)
Total contributions by and distributions to owners 26 - 516 - 389 (9,268) (8,337)
As at 31 December 2025 20,197 34,114 (15,584) (8) 1,041 40,593 80,353
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
Year ended 31 December
2025 2024
Note £'000 £'000
Operating activities
Profit before tax 18,102 23,761
Non-cash items:
Finance expense 5 625 341
Finance income 5 (242) (116)
Impairment loss/(gain) on financial assets 995 (39)
Gain on bargain purchase 12 (4,524) -
Depreciation of property, plant and equipment 10 1,274 934
Depreciation on right of use assets 11 1,524 1,273
Loss on disposal of property, plant and equipment 3 105 9
Loss on disposal of subsidiary 12 44 -
Amortisation of intangible assets 9 294 26
Impairment of intangible assets 9 122 -
Profit on sale of intangibles 9 (123) -
Share based payments 23 620 349
Contributions to defined benefit pension scheme 13 (292) -
Movement in derivative financial instruments 1,469 (1,858)
Increase in deferred tax liabilities 19 - 24
Foreign exchange impact 26 45
Other adjustments:
Acquisition related costs 3 - 418
Working capital adjustments:
Decrease/(increase)in inventories 14 2,647 (2,807)
Decrease/(increase) in trade and other receivables 15 165 (3,190)
Decrease in trade and other payables 17 (3,053) (1,943)
Cash generated from operations 19,778 17,227
Tax paid (5,431) (8,070)
Net cash flows from operating activities 14,347 9,157
Investing activities
Acquisition related costs 3 - (418)
Acquisition of subsidiary, net of cash acquired (note 2 below) 12 (7,362) -
Purchase of intangible assets 9 (2) (23)
Purchase of property, plant and equipment 10 (2,184) (2,237)
Proceeds from sales of property, plant and equipment 2 12
Proceeds from the sale of intangible assets 275 -
Proceeds from disposal of subsidiary net of cash disposed 12 118 -
Interest received 5 242 116
Net cash used in investing activities (8,911) (2,550)
Financing activities
Loans received from Directors - 14,000
Loans repaid to Directors - (14,000)
Lease payments 18 (1,393) (1,270)
Proceeds from issued share capital - 15,245
Lease liability interest 18 (473) (206)
Interest paid 5 (152) (135)
Dividends 20 (9,291) (7,379)
Net cash (used in)/from financing activities (11,309) 6,255
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
Year ended 31 December
2025 2024
Note £'000 £'000
Net (decrease)/increase in cash and cash equivalents (5,873) 12,862
Cash and cash equivalents at beginning of period 21,887 9,053
Exchange loss on cash and cash equivalents (29) (28)
Cash and cash equivalents at end of period 16 15,985 21,887
Cash and cash equivalents consist of:
Cash and cash equivalents¹ 16 15,985 21,887
15,985 21,887
Note 1: Cash and cash equivalents in 2024 include restricted cash of
£14,021,000 (see Note 16) which was held in an escrow account at 31 December
2024. The funds were released in February 2025 and utilised in the acquisition
of Brand Architekts Group PLC. Further details of this acquisition are
provided in Note 12.
Note 2: On 12 February 2025, the Company issued 103,422 ordinary shares of
£0.25 each at £5.24 per share as partial consideration for the acquisition
of Brand Architekts Plc.
The notes form part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT ENDED 31 DECEMBER 2025
1. Material accounting policies
Basis of preparation
The financial statements of Warpaint London PLC (the "Company" or "Warpaint")
and its subsidiaries (together the "Group") for the year ended 31 December
2025 were authorised for issue by the board of directors on 28 April 2025.
Warpaint London PLC is a public limited Company incorporated and registered in
England and Wales. Its registered office is Units B&C, Orbital Forty-Six,
The Ridgeway Trading Estate, Iver, Buckinghamshire, SL0 9HW.
The Group's financial statements have been prepared in accordance with UK
adopted international accounting standards and in conformity with the
requirements of the Companies Act.
The financial statements are presented in pounds sterling and are rounded to
the nearest thousand (£'000) except where otherwise indicated foreign
operations are included in accordance with policies set out in the Foreign
Currencies accounting policy.
The annual financial statements have been prepared on the historical cost
basis, except for certain financial assets and liabilities which are carried
at fair value.
The preparation of financial statements in accordance with UK adopted
international accounting standards requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period. Although these estimates are based on management's best
knowledge of current events and actions, actual results ultimately may differ
from those estimates. The principal accounting policies adopted are set out
below.
Basis of consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the Company and
its subsidiaries as if they formed a single entity. Intercompany transactions
and balances between group companies are therefore eliminated in full. All
subsidiaries have a reporting date of December.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
They are deconsolidated from the date on which control ceases.
On consolidation, the results of overseas operations are translated into
pounds sterling at rates approximating to those ruling when the transactions
took place. All assets and liabilities of overseas operations, including
goodwill arising on the acquisition of those operations, are translated at the
rate ruling at the reporting date. Exchange differences arising on translating
the opening net assets at opening rate and the results of overseas operations
at actual rate are recognised in other comprehensive income and accumulated in
the foreign exchange reserve.
Exchange differences recognised in the profit or loss of the Group entities'
separate financial statements on the translation of long-term monetary items
forming part of the Group's net investment in the overseas operation are
reclassified to other comprehensive income and accumulated in the foreign
exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences
recognised in the foreign exchange reserve relating to that operation up to
the date of disposal are transferred to the consolidated statement of
comprehensive income as part of the profit or loss on disposal.
Going concern
The Directors have concluded that it is reasonable to adopt a going concern
basis in preparing the financial statements. This is based on a reasonable
expectation that the Group has adequate resources to continue in operational
existence for at least twelve months from the date of signing of these
accounts. The Group made a statutory profit after tax of £14.3 million in the
year to 31 December 2025 (2024: £18.2 million) and had net current assets of
£59.9 million at 31 December 2025(2024: £62.1 million).
The Group occasionally makes use in its Retra Holdings Limited ("Retra")
subsidiary of a £6.0 million bank facility that can be used for confidential
invoice discounting, and a £2.0 million bank facility that can be used for
stock finance, which is used if needed during the peak gift buying season.
These facilities are ongoing without a fixed term. In addition, the Group has
a £1.0 million) general purpose bank facility in its Warpaint Cosmetics
(2014) Limited ("Warpaint Cosmetics") subsidiary. This facility was renewed
for another year on 10 March 2026 and was put in place to support the
continued growth of the business. As at the year end £nil of the bank
facilities were utilised and the Directors expect that in 2026 the facilities
will rarely be used, if at all and only to modest levels well within the
facility limits, to support the day to day working capital of the business. At
the 31 March 2026 the Company had cash of £17.3 million (8 April 2025: £17.3
million), no debt and had used £nil of its bank facilities (8 April 2025: No
debt and £nil bank facilities were used).
The Directors have prepared forecasts covering the period to December 2027,
built from the detailed Board-approved budget for 2026. The forecasts include
a number of assumptions in relation to varying levels of sales revenue. Whilst
the Group's trading and cash flow forecasts have been prepared using current
trading assumptions, the operating environment presents a number of challenges
which could negatively impact the actual performance achieved. These
challenges include, but are not limited to, achieving forecast levels of sales
and order intake, the impact on customer confidence as a result of general
economic conditions, achieving forecast margin improvements, supply side price
inflation, increases in freight costs, and the director's ability to implement
cost saving initiatives in areas of discretionary spend where required.
The Group's cash flow forecasts and projections, taking account of reasonable
and possible changes in trading performance, offset by mitigating actions
within the control of management including reductions in areas of
discretionary spend, show that the Group will be able to operate comfortably
through to the end of December 2027, and in Retra and Warpaint Cosmetics
within the level of their own bank facility.
In preparing this analysis, a number of scenarios were modelled. The scenarios
modelled were all based on varying levels of sales revenue, including one that
assumes no growth for 2026 and 2027 as a reasonable downside scenario, and
more extreme falls in revenue of up to 30% in both years as a worst-case
scenario. In each scenario, mitigating actions within the control of
management have been modelled. In addition, management have considered the
changing US tariffs made in recent months and during 2025, even though sales
into the US are a small part of the business (Sales 2025: £6.9 million, 2024:
£8.7 million). Management calculated that the changes in tariff made an
immaterial impact on the business and the carrying value of the goodwill in
its US entity. Under each of the scenarios modelled, the Group has sufficient
cash to meet its liabilities as they fall due and consequently, the directors
believe that the Group has sufficient financial strength to withstand the
possible disruption to its activities.
While the ongoing Middle East crisis has been monitored by management, it
currently does not pose a threat to the Group's status as a going concern.
The business maintains immaterial sales exposure within the affected region,
ensuring that core revenue streams remain insulated from direct geopolitical
volatility. The primary impacts are operational rather than structural,
specifically involving fluctuations in shipping rates and extended transit
times due to rerouted logistics. These inflationary pressures and delays are
being managed through proactive supply chain adjustments and are not expected
to impair the Company's ability to meet its financial obligations for the
foreseeable future.
Based on the above indications the directors believe that it remains
appropriate to prepare the financial statements on a going concern basis.
Revenue Recognition
Performance obligations and timing of revenue recognition
The Group's revenue is derived from selling goods with revenue recognised at a
point in time when control of the goods has transferred to the customer. This
is generally when the goods are delivered to the customer. However, for export
sales, control might also be transferred when delivered either to the port of
departure or port of arrival, depending on the specific terms of the contract
with a customer. There is limited judgement needed in identifying the point
control passes: once physical delivery of the products to the agreed location
has occurred, the group no longer has physical possession, usually will have a
present right to payment (as a single payment on delivery) and retains no
control of the goods in question.
UK sales are recognised and invoiced to the customer once the goods have been
delivered to the customer. Overseas sales are recognised and invoiced to the
customer once the goods have been delivered to the customer or collected by
the customer from the Group's warehouse according to the terms of sale. Online
sales are recognised and invoiced to the customer once the goods have been
delivered to the customer.
Under IFRS 15, volume rebates and early settlement discounts represent
variable consideration and is estimated and recognised as a reduction to
revenue as performance obligations are satisfied. Management recognises
revenue based on the amount of estimated rebate and discounts to the extent
that revenue is highly probable of not reversing. Management monitors this
estimate at each reporting date and adjusts it as necessary.
Determining the transaction price
Most of the group's revenue is derived from fixed price contracts and
therefore the amount of revenue to be earned from each contract is determined
by reference to those fixed prices. Exceptions are as follows:
· Some contracts provide customers with a limited right of return.
These relate predominantly, but not exclusively, to online sales direct to
consumers and sales made to certain large retailers. Historical experience
enables the group to estimate reliably the value of goods that will be
returned and restrict the amount of revenue that is recognised such that it is
highly probable that there will not be a reversal of previously recognised
revenue when goods are returned.
· Variable consideration relating to volume rebates has been considered
in estimating revenue in order that it is highly probable that there will not
be a future reversal in the amount of revenue recognised when the amount of
volume rebates has been determined.
Allocating amounts to performance obligations
For most contracts, there is a fixed unit price for each product sold, with
reductions given for bulk orders placed at a specific time. Therefore, there
is no judgement involved in allocating the contract price to each unit ordered
in such contracts (it is the total contract price divided by the number of
units ordered). Where a customer orders more than one product line, the Group
is able to determine the split of the total contract price between each
product line by reference to each product's standalone selling prices (all
product lines are capable of being, and are, sold separately).
Practical Exemptions
The group has taken advantage of the practical exemptions:
· not to account for significant financing components where the time
difference between receiving consideration and transferring control of goods
(or services) to its customer is one year or less; and
· expense the incremental costs of obtaining a contract when the
amortisation period of the asset otherwise recognised would have been one year
or less.
Alternative Performance Measures
Alternative performance measures (APM's) are used by the Board to assess the
Group's performance and are applied consistently from one period to the next.
They therefore provide additional useful information for shareholders on the
underlying performance and position of the Group. Additionally, adjusted
profit from operations is used to determine adjusted EPS which is used in some
instances for the Company's share option schemes. These measures are not
defined by IFRS and are not intended to be a substitute for IFRS measures.
Adjusted numbers are closer to the underlying cash flow performance from
recurring operations of the business, which is regularly monitored and
measured by management.
Underlying results are used in the day-to-day management of the Group. They
represent statutory measures adjusted for items which could distort the
understanding of performance and comparability year on year. Non-underlying
items include the amortisation of intangible assets, acquisition related costs
in respect of the acquisition of Brand Architekts Group Plc (see note 12) and
share-based payments.
Non-underlying items are considered by management to be non - cash items which
are included as part of the consolidation process such as amortisation of
intangible assets, other non - cash items and one-off expenditure, such as
exceptional items and foreign exchange gains and losses, which management
consider will distort the performance measures being monitored.
The table below discloses the performance measures monitored by the Company.
Year ended 31 Dec 2025 Year ended 31 Dec 2024
Statutory profit from operations £18.49m £24.00m
Depreciation £1.27m £0.93m
Depreciation of right of use assets £1.52m £1.27m
Amortisation of intangible assets £0.29m £0.03m
Foreign exchange gain/loss £2.23m £ (2.0) m
EBITDA £23.80m £24.23m
Gain on bargain purchase** £(4.52)m -
Exceptional Items* £1.39m £0.42m
Share based payments 0.62m £0.35m
Adjusted EBITDA £21.29m £25.00m
Statutory profit from operations £18.49m £24.00m
Exceptional Items* £1.39m £0.42m
Amortisation of intangible assets £0.29m £0.03m
Gain on bargain purchase** £(4.52)m -
Share based payments £0.62m £0.35m
Adjusted profit from operations £16.27m £24.80m
Adjusted profit margin from operations £16.27m / £105.08m = 15.48% £24.80m / £101.61m = 24.4%
Statutory PBT £18.10m £23.76m
Exceptional Items* £1.39m £0.42m
Amortisation of intangible assets £0.29m £0.03m
Share based payments £0.62m £0.35m
Gain on bargain purchase** £(4.52)m -
Adjusted PBT £15.88m £24.56m
Statutory profit attributable to equity holders £14.35m £18.23m
Exceptional Items* £1.39m £0.42m
Amortisation of intangible assets £0.29m £0.03m
Share based payments £0.62m £0.35m
Gain on bargain purchase** £(4.52)m -
Foreign exchange gain/loss £2.23m £ (2.0) m
Tax attributable to adjusting items £(0.88)m £0.29m
Adjusted profit attributable to equity holders £13.48m £17.32m
Weighted number of ordinary shares 80,774,765 77,691,505
Adjusted EPS 16.68p 22.29p
Exceptional Items*
Exceptional items are those which, in the directors' judgement, should be
disclosed separately by virtue of their size, nature, or incidence to enable a
full understanding of the group's financial performance. They include directly
attributable acquisition costs, restructuring costs and other one-off costs as
a result of the acquisition of Brand Architekts Group PLC.
Gain on bargain purchase**
The gain on bargain purchase relates to the acquisition of Brand Architekts in
the year. See note 12 for further explanation.
Intangible assets
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately
from goodwill are initially recognised at their fair value at the acquisition
date (which is regarded as their cost). Subsequent to initial recognition,
intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis
as intangible assets that are acquired separately. Amortisation is provided on
customer lists and brands so as to write off the carrying value over the
expected useful economic life of five and fifteen years. Other details of the
acquisition are detailed in note 9.
Goodwill
Goodwill represents the excess of the cost of a business combination over the
Group's interest in the fair value of identifiable assets, liabilities and
contingent liabilities acquired.
Cost comprises the fair value of assets given, liabilities assumed, and equity
instruments issued, plus the amount of any non-controlling interests in the
acquiree. Contingent consideration is included in cost at its acquisition date
fair value and, in the case of contingent consideration classified as a
financial liability, remeasured subsequently through profit or loss.
Goodwill is considered to have an indefinite useful economic life and is
capitalised as an intangible asset with any impairment in carrying value being
charged to the consolidated statement of comprehensive income. Where the fair
value of identifiable assets, liabilities and contingent liabilities exceed
the fair value of consideration paid, the excess is credited in full to the
consolidated statement of comprehensive income on the acquisition date and is
shown as "gain on bargain purchase"
Impairment of non-financial assets (excluding inventories and deferred tax
assets)
Impairment tests on goodwill and other intangible assets with indefinite
useful economic lives are undertaken annually at the financial year end.
Other non-financial assets are subject to impairment tests whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable.
Where the carrying value of an asset exceeds its recoverable amount (i.e. the
higher of value in use and fair value less costs to sell), the asset is
written down accordingly. Where it is not possible to estimate the recoverable
amount of an individual asset, the impairment test is carried out on the
smallest group of assets to which it belongs for which there are separately
identifiable cash flows; its cash generating units ('CGUs').
Goodwill is allocated on initial recognition to each of the Group's CGUs that
are expected to benefit from a business combination that gives rise to the
goodwill. Impairment charges are included in profit or loss, except to the
extent they reverse gains previously recognised in other comprehensive income.
An impairment loss recognised for goodwill is not reversed.
Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As
well as the purchase price, cost includes directly attributable costs.
Depreciation is provided on all items of property, plant and equipment so as
to write off their carrying value over the expected useful economic lives. It
is provided at the following rates:
Plant and
machinery
- 25% reducing balance or 20% straight line
Fixtures and
fittings
- 25% reducing balance or 20% straight line or 33.3%
straight
Line.
Computer
equipment
- 25% reducing balance or 33.33% straight line
Motor
vehicles
- 20% straight line
Financial assets
The Group classifies its financial assets into one of the categories discussed
below, depending on the purpose for which the asset was acquired. Other than
financial assets in a qualifying hedging relationship, the Group's accounting
policy for each category is as follows:
Fair value through profit or loss
This category comprises in-the-money derivatives and out-of-money derivatives
where the time value offsets the negative intrinsic value (see "Financial
liabilities" section for out-of-money derivatives classified as liabilities).
They are carried in the statement of financial position at fair value with
changes in fair value recognised in the consolidated statement of
comprehensive income. Other than derivative financial instruments which are
not designated as hedging instruments, the Group does not have any assets held
for trading nor does it voluntarily classify any financial assets as being at
fair value through profit or loss.
Amortised cost
These assets arise principally from the provision of goods and services to
customers (e.g. trade receivables) but also incorporate other types of
financial assets where the objective is to hold these assets in order to
collect contractual cash flows and the contractual cash flows are solely
payments of principal and interest. They are initially recognised at fair
value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Impairment requirements use an 'expected credit loss' ('ECL') model to
recognise an allowance. Impairment is measured using a 12- month ECL method
unless the credit risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL method is adopted.
For receivables, a simplified approach to measuring expected credit losses
using a lifetime expected loss allowance is available and has been adopted by
the Group. During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For trade receivables, which are
reported net, such provisions are recorded in a separate provision account
with the loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation that the trade
receivable will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
The Group's financial assets measured at amortised cost comprise trade and
other receivables, and cash and cash equivalents in the consolidated statement
of financial position.
Cash and cash equivalents include cash in hand, deposits held at call with
banks and restricted cash held under escrow (see note 16). For the purpose of
the statement of cash flows - bank overdrafts. Bank overdrafts are shown
within loans and borrowings in current liabilities on the consolidated
statement of financial position.
Financial liabilities
The Group classifies its financial liabilities into one of two categories,
depending on the purpose for which the liability was acquired. The Group's
accounting policy for each category is as follows:
Fair value through profit or loss
This category comprises out-of-the-money derivatives where the time value does
not offset the negative intrinsic value (see "Financial assets" for
in-the-money derivatives and out-of-money derivatives where the time value
offsets the negative intrinsic value). They are carried in the consolidated
statement of financial position at fair value with changes in fair value
recognised in the consolidated statement of comprehensive income. The Group
does not hold or issue derivative instruments for speculative purposes, but
for hedging purposes. Other than these derivative financial instruments, the
Group does not have any liabilities held for trading nor has it designated any
financial liabilities as being at fair value through profit or loss.
Other financial liabilities
Other financial liabilities include the following items:
· Trade payables, other borrowings and other short-term monetary
liabilities, which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
Derivative financial instruments
The Group enters into a variety of derivative financial instruments to manage
its exposure to foreign exchange rate risk, through the use of foreign
exchange rate forward contracts.
Derivatives are initially recognised at fair value at the date the derivative
contracts are entered into and are subsequently re-measured to their fair
value at the end of each reporting period. The resulting gain or loss is
recognised in profit or loss immediately unless the derivative is designated
and effective as a hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge relationship.
Foreign currencies
Transactions entered into by Group entities in a currency other than the
currency of the primary economic environment in which they operate (their
"functional currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the reporting date. Exchange differences arising on the
retranslation of unsettled monetary assets and liabilities are recognised
immediately in profit or loss.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the group's foreign operations are translated at exchange
rates prevailing on the reporting date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates
fluctuate significantly during that period, in which case the exchange rates
at the date of transactions are used. Exchange differences arising, if any,
are recognised in other comprehensive income and accumulated in a foreign
exchange translation reserve.
Leases
The Group assesses whether contract is, or contains, a lease at the inception
of the contract.
At the commencement date of a lease, a right of use asset and corresponding
lease liability are recognised.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value guarantee;
· the exercise price of any purchase option granted in favour of the
group if it is reasonably certain to assess that option; and
· any penalties payable for terminating the lease, if the term of the
lease has been estimated on the basis of termination option being exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease
incentives received, and increased for:
· lease payments made at or before commencement of the lease;
· initial direct costs incurred; and
· the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
When the group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted at
a revised discount rate. The carrying value of lease liabilities is similarly
revised when the variable element of future lease payments dependent on a rate
or index is revised. In both cases an equivalent adjustment is made to the
carrying value of the right-of-use asset, with the revised carrying amount
being amortised over the remaining (revised) lease term.
When the group renegotiates the contractual terms of a lease with the lessor,
the accounting depends
on the nature of the modification:
· if the renegotiation results in one or more additional assets being
leased for an amount commensurate with the standalone price for the additional
rights-of-use obtained, the modification is accounted for as a separate lease
in accordance with the above policy;
· in all other cases where the renegotiated increases the scope of the
lease (whether that is an extension to the lease term, or one or more
additional assets being leased), the lease liability is remeasured using the
discount rate applicable on the modification date, with the right-of-use asset
being adjusted by the same amount ; and
· if the renegotiation results in a decrease in the scope of the lease,
both the carrying amount of the lease liability and right-of-use asset are
reduced by the same proportion to reflect the partial of full termination of
the lease with any difference recognised in profit or loss. The lease
liability is then further adjusted to ensure its carrying amount reflects the
amount of the renegotiated payments over the renegotiated term, with the
modified lease payments discounted at the rate applicable on the modification
date. The right-of-use asset is adjusted by the same amount.
For contracts that both convey a right to the group to use an identified asset
and require services to be provided to the group by the lessor, the group has
elected to account for the entire contract as a lease, i.e. it does allocate
any amount of the contractual payments to, and account separately for, any
services provided by the supplier as part of the contract.
Nature of leasing activities (in the capacity as lessee)
The group leases a number of properties in the jurisdictions from which it
operates with a fixed periodic rent over the lease term. The group has a total
of 7 property leases.
The Group depreciates the right-of-use assets on a straight-line basis from
the lease commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term.
The Group also assesses the right-of-use asset for impairment when such
indicators exist.
The right-of-use assets are included in a separate line within non-current
assets on the Consolidated Balance Sheet.
Taxation
Income tax expense represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from 'profit before tax' as reported in the consolidated
statement of comprehensive income and other comprehensive income because of
items of income or expense that are taxable or deductible in other years and
items that are never taxable or deductible.
The Group's current tax is calculated using tax rates that have been enacted
or substantively enacted by the end of the reporting period.
Deferred taxation
A deferred tax liability shall be recognised for all taxable temporary
differences, except to the extent that the deferred tax liability arises from:
· the initial recognition of goodwill;
· the initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the transaction affects
neither accounting or taxable profit at the time of the transaction, does not
give rise to equal taxable and deductible temporary differences; and
· investments in subsidiaries and jointly controlled entities where the
Group is able to control the timing of the reversal of the difference and it
is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the end of the reporting period and
are expected to apply when the deferred tax liabilities or assets are settled
or recovered. Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable group company; or
· different Company entities which intend either to settle current tax
assets and liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets and liabilities are expected to be settled or
recovered.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
the cost and net realisable value. Cost comprises all costs of purchase, costs
of conversion and other costs incurred in bringing the inventories to their
present location and condition. Costs are calculated using the FIFO (first in,
first out) method. Provision is made for obsolete, slow-moving or defective
items where appropriate.
Operating segments
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision maker has been identified as the management team including the Chief
Executive Officers, Managing Director and the Chief Financial Officer.
The Board considers that the Group's activity constitutes two operating
segments presented in Note 2, as defined under IFRS 8. Management reviews the
performance of the Group by reference to total results against budget.
The total profit measures are operating profit and profit for the year, both
disclosed on the face of the combined income statement. No differences exist
between the basis of preparation of the performance measures used by
management and the figures in the Group financial information.
Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders of the parent by the weighted average number of
ordinary shares outstanding during the year, excluding treasury shares and
shares in employee benefit trusts, determined in accordance with the
provisions of IAS 33 earnings per Share. Diluted earnings per share is
calculated by dividing earnings attributable to ordinary shareholders of the
parent by the weighted average number of ordinary shares outstanding during
the year adjusted for the potentially dilutive ordinary shares.
Share Capital
The Group's ordinary shares are classified as equity instruments. Costs
specifically relating to the issue of shares are offset against any share
premium arising on the issue of those shares. Any share issue costs in excess
of share premium are expensed to the consolidated statement of comprehensive
income.
Pension obligations
The Group operates both defined benefit and defined contribution pension
plans.
i) Defined benefit plans
Defined benefit scheme surpluses and deficits are measured at:
· The fair value of plan assets at the reporting date;
· less Plan liabilities calculated using the projected unit credit
method discounted to its present value using yields available on high quality
corporate bonds that have maturity dates approximating to the terms of the
liabilities and are denominated in the same currency as the post employment
benefit obligations; less
· The effect of minimum funding requirements agreed with scheme
trustees.
Remeasurements of the net defined obligation are recognised directly within
equity. The remeasurements include:
· Actuarial gains and losses
· Return on plan assets (interest exclusive)
· Any asset ceiling effects (interest exclusive).
Service costs are recognised in profit or loss, and include current and past
service costs as well as gains and losses on curtailments.
Net interest expense (income) is recognised in profit or loss, and is
calculated by applying the
discount rate used to measure the defined benefit obligation (asset) at the
beginning of the annual period to the balance of the net defined benefit
obligation (asset), considering the effects of contributions and benefit
payments during the period.
Gains or losses arising from changes to scheme benefits or scheme curtailment
are recognised
immediately in profit or loss.
Settlements of defined benefit schemes are recognised in the period in which
the settlement occurs.
ii) Defined contribution plans
Costs of defined contribution pension plans are charged to the profit or loss
in the year they fall due.
Exceptional items
Exceptional items are significant, non-recurring items of income or expense
presented separately to aid understanding of underlying performance. In the
current period, they relate primarily to acquisition costs, including
professional and transaction fees, which are not expected to recur in the
normal course of business.
Share-based payments
Where equity settled share options are awarded to employees, the fair value of
the options at the date of grant is charged to the consolidated statement of
comprehensive income over the vesting period. Non-market vesting conditions
are considered by adjusting the number of equity instruments expected to vest
at each reporting date so that, ultimately, the cumulative amount recognised
over the vesting period is based on the number of options that eventually
vest. Non-vesting conditions and market vesting conditions are factored into
the fair value of the options granted. As long as all other vesting conditions
are satisfied, a charge is made irrespective of whether the market vesting
conditions are satisfied. The cumulative expense is not adjusted for failure
to achieve a market vesting condition or where a non-vesting condition is not
satisfied.
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and
after the modification, is also charged to the consolidated statement of
comprehensive income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the
consolidated statement of comprehensive income is charged with the fair value
of goods and services received.
Dividends
Dividends are recognised when they become legally payable. In the case of
interim dividends to equity shareholders, this is when paid to the
shareholders. In the case of final dividends, this is when approved by the
shareholders at the annual general meeting.
Changes in accounting policies
a) New standards, interpretations and amendments adopted
from 1 January 2025
The following amendments are effective for the period beginning 1 January
2025:
· Lack of exchangeability (Amendment to IAS 21 The Effects of Changes
in Foreign
Exchange Rates)
On 15 August 2023, the IASB issued Lack of Exchangeability which amended IAS
21 The Effects of Changes in Foreign Exchange Rates (the Amendments). The
Amendments introduce requirements to assess when a currency is exchangeable
into another currency and when it is not. The Amendments require an entity to
estimate the spot exchange rate when it concludes that a currency is not
exchangeable into another currency.
These amendments had no effect on the consolidated financial statements of the
Group.
The following illustrative examples have been issued during 2025 with no
effective date:
· Illustrative examples on reporting uncertainties in financial
statements
On 28 November 2025, the IASB issued Disclosures about Uncertainties in the
Financial Statements - Illustrative examples, which amended multiple IFRS
Accounting Standards to include illustrative examples demonstrating how
companies can apply IFRS Accounting Standards when reporting the effects of
uncertainties in their financial statements. The illustrative examples are
accompanying materials to IFRS Accounting Standards and do not have an
effective date. The IASB had issued a near-final staff draft of the
illustrative examples in July 2025. The Group has considered these
illustrative examples in its preparation of the consolidated financial
statements and no additional disclosures or changes in presentation were
considered necessary.
b) New standards, interpretations and amendments not yet
effective
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The following amendments are effective for the annual reporting period
beginning 1 January 2026:
· Amendments to the Classification and Measurement of Financial
Instruments (Amendment s to IFRS 9 Financial Instruments and IFRS 7
Financial Instruments: Disclosures)
· Contracts Referencing Nature -dependent Electricity (Amendments to
IFRS 9 and IFRS 7)
The following standards and amendments are effective for the annual reporting
period beginning 1 January 2027:
· IFRS 18 Presentation and Disclosure in Financial Statements
· IFRS 19 Subsidiaries without Public Accountability: Disclosures.
The Group is currently assessing the effect of these new accounting standards
and amendments.
IFRS 18 Presentation and Disclosure in Financial Statements, which was issued
by the IASB in April 2024 supersedes IAS 1 and will result in major
consequential amendments to IFRS Accounting Standards including IAS 8 Basis of
Preparation of Financial Statements (renamed from Accounting Policies, Changes
in Accounting Estimates and Errors). Even though IFRS 18 will not have any
effect on the recognition and measurement of items in the consolidated
financial statements, it is expected to have a significant effect on the
presentation and disclosure of certain items. These changes include
categorisation and sub-totals in the statement of profit or loss,
aggregation/disaggregation and labelling of information, and disclosure of
management-defined
performance measures.
The Group does not expect to be eligible to apply IFRS 19.
Critical accounting judgements and key sources of estimation uncertainty
The Group makes certain estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including the expectations of future events that
are believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year
are discussed below.
Key sources of estimation uncertainty
a) Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
the cost and net realisable value. There is judgement involved in assessing
the level of inventory provision required in respect of slow-moving inventory.
Inventory is carried at a value of £31.3 million (2024: £31.2 million) at
the year end.
To better manage the group business as we continue to grow, we have amended
our stock provision policy. Instead of tracking the specific age of
individual items, we now apply a flat 1.3% across our total stock value, plus
we make provision for specific stock items that are slow moving or being sold
at less than cost. The 1.3% value was derived after examining the running
average of the group stock provisions for the previous four years, being 2021
to 2024.
The Group made a 1.3% general provision of its total stock holding at the year
end. In addition, a further "net realisable value" provision is made to write
stock down for any slow-moving items, or items that are being sold at less
than cost. At the year end the general provision of 1.3% totalled £423,000,
and the net realisable value provision totalled £178,000, making a total
provision for the year of £601,000. If the same provision basis had been
applied in 2024 the year end the general provision of 1.3% would have totalled
£411,000, and the net realisable value provision would have totalled
£84,000, making a total provision for the year of £495,000.
The previous provision basis was a 50% specific provisions for perishable
items of stock that were greater than two years old. In 2024 we reported a
provision of £423,000, and for 2025 the provision would have been £686,000
if the previous method was used.
b) Defined benefit pension
The present value of post-employment benefit obligations is determined on an
actuarial basis using various assumptions, including the discount rate,
inflation rate and mortality assumptions.
Changes in these assumptions can have a material impact on the defined benefit
obligation and net pension position. Actuarial gains and losses arising from
changes in assumptions and experience are recognised in other comprehensive
income in the period in which they occur.
The Group uses independent actuaries to determine the assumptions, which are
reviewed at each reporting date to reflect current market conditions.
Key assumptions and sensitivities for post-employment benefit obligations are
disclosed in Note 12.
c) Business combinations
The accounting for business combinations requires significant estimation in
determining the fair value of identifiable assets and liabilities at the
acquisition date.
Valuation techniques, including discounted cash flow models, are used to
measure identifiable intangible assets such as brands and customer
relationships, requiring assumptions such as future cash flows, growth rates
and discount rates.
Judgement is also required in recognising deferred tax assets on tax losses
carried forward in the acquired entity. This assessment is based on the
probability of future taxable profits and the period over which the losses can
be utilised. Where recovery is not considered probable, a portion of the
deferred tax asset is not recognised.
These estimates and judgements affect the fair value of net assets recognised
and, consequently, the amount of gain on bargain purchase arising on
acquisition.
Critical accounting judgements
In the process of applying the Group's accounting policies, management has
made the following judgements which have the most significant effect on the
amounts recognised in the financial statements.
Recognition of defined benefit pension surplus
In applying IAS 19 Employee Benefits, management has exercised judgement in
determining whether, and to what extent, a surplus in the Group's defined
benefit pension scheme is recoverable and can therefore be recognised as an
asset.
In accordance with IFRIC 14 The Limit on a Defined Benefit Asset Minimum
Funding Requirements and their Interaction, the amount recognised as an asset
is limited to the economic benefits available to the Group in the form of
refunds from the plan or reductions in future contributions.
The assessment of recoverability requires judgement and consideration of the
scheme rules, funding arrangements and applicable legislation. In particular,
management considers whether the Group has an unconditional right to a refund
or whether the surplus can be recovered through reduced future contributions.
Recognition of deferred tax assets on tax losses
Management has exercised judgement in determining the extent to which deferred
tax assets are recognised in respect of tax losses, particularly those arising
in an acquired subsidiary, in accordance with IAS 12 Income Taxes.
This includes judgement as to whether it is probable that sufficient future
taxable profits will be available against which the losses can be utilised,
taking into account the specific circumstances of the acquired entity,
including its historical performance, business plans and the period over which
the losses can be used.
Deferred tax assets have been recognised only on those losses for which
recovery is considered probable. Losses for which utilisation is not
considered probable have not been recognised.
2. Segmental information
For management purposes, the Group is organised into two operating segments;
Branded and Close-out. The segment 'Branded' relates to the sale of own
branded products whereas 'Close-out' relates to the purchase of third-party
stock which is then repackaged for sale. These segments are the basis on which
the Group reports internally to the Board. The executive directors Sam Bazini,
Eoin Macleod and Neil Rodol together with members from the Group's senior
management teams are the chief operating decision makers of the whole
business.
Year ended 31 December 2025 2025 2025 2024 2024 2024
Branded Close-out Total Branded Close-out Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 102,582 2,500 105,082 99,357 2,250 101,607
Cost of sales (58,911) (1,432) (60,343) (58,416) (1,323) (59,739)
Gross profit 43,671 1,068 44,739 40,941 927 41,868
Administrative expenses (25,707) (594) (26,301) (15,253) (396) (15,649)
Depreciation (1,274) - (1,274) (934) - (934)
Depreciation of right of use assets (1,524) - (1,524) (1,273) - (1,273)
Amortisation (294) - (294) (26) - (26)
Gain on bargain purchase 4,524 - 4,524
Exceptional items (1,385) - (1,385) - - -
Profit from operations 18,011 474 18,485 23,455 531 23,986
Reconciliation of segment result to profit before tax:
Segment result 18,011 474 18,445 23,455 531 23,986
Finance Income 242 - 242 116 - 116
Finance expense (625) - (625) (341) - (341)
Profit before tax 17,268 474 18,102 23,230 531 23,761
Analysis of total revenue by geographical market:
UK 36,883 1,975 38,858 32,870 2,128 34,998
Europe - Other 8,686 69 8,755 10,283 10 10,293
Europe - Spain 12,409 29 12,438 14,623 84 14,707
Europe - Denmark 31,605 106 31,711 29,716 17 29,733
Rest of World - USA 6,540 321 6,861 8,649 11 8,660
Rest of World - Australia and New Zealand 5,145 - 5,145 2,168 - 2,168
Rest of World - Other 1,314 - 1,314 1,048 - 1,048
Total 102,582 2,500 105,082 99,357 2,250 101,607
2. Segmental information (continued)
During the year ended 31 December 2025, revenues of approximately £30.9
million (2024: £27.7 million) were derived from a single external customer
based in Denmark, with operations across Europe (29.3%; 2024: 27.3%).
The Directors are not able to attribute the Group's assets and liabilities by
reportable business segment.
Analysis of non-current assets by geographical market:
Year ended 31 December 2025 2025 2025 2024 2024 2024
UK USA Total UK USA Total
£'000 £'000 £'000 £'000 £'000 £'000
Goodwill 6,720 554 7,274 6,720 554 7,274
Customer lists 255 - 255 - - -
Brand 4,000 - 4,000 - 3 3
Patents 40 - 40 60 - 60
Website 23 - 23 27 - 27
Property, plant and equipment 2,915 458 3,373 1,986 541 2,527
Right of use assets 9,448 65 9,513 4,023 50 4,073
23,401 1,077 24,478 12,816 1,148 13,964
The Group has disaggregated revenue into the following category:
Year ended 31 December
2025 2024
Sales Type £'000 £'000
Sales to retailers and distributors 93,479 93,199
E-commerce sales 11,603 8,408
105,082 101,607
3. Operating profit
Operating profit for the period is stated after (crediting)/charging:
Year ended 31 December
2025 2024
£'000 £'000
Foreign exchange loss/(gain) 2,227 (2,004)
Depreciation 1,274 934
Loss on disposal of property, plant and equipment 105 9
Profit on disposal on intangible assets (123) -
Impairment of intangible assets 122 -
Depreciation of right-of-use assets 1,524 1,273
Amortisation of intangible assets 294 26
Impairment (loss)/gain on financial assets 995 (39)
Exceptional items 1,385 418
Staff costs (note 4) 11,054 9,337
Write off of inventories 178 45
Inventories recognised as an expense (note 14) 49,462 50,244
Exceptional items are those which, in the directors' judgement, should be
disclosed separately by virtue of their size, nature, or incidence to enable a
full understanding of the group's financial performance. They include directly
attributable acquisition costs, restructuring costs and other one-off costs as
a result of the acquisition of Brand Architekts Group PLC. Further details of
the acquisition are provided in note 12.
Auditor's Remuneration
Analysis of auditor's remuneration is as follows:
Year ended 31 December
2025 2024
£'000 £'000
Fees payable to the Company's auditor for the audit of the Group's annual 413 147
accounts
Fees payable to the Company's auditor and its associates for the audit of 233 186
subsidiary companies
Total audit fees 646 333
Tax advice - 5
Total non-audit fees - 5
4. Staff costs
Year ended 31 December
2025 2024
£'000 £'000
Wages and salaries 9,540 8,199
Social security costs 1,279 1,004
Share based payment (note 23) 620 349
Pension costs (note 13) 235 134
11,674 9,686
The average monthly number of employees during the period was as follows:
Year ended 31 December
2025 2024
No. No.
Directors 9 9
Administrative 35 23
Finance 20 14
Warehouse 73 71
Sales 23 17
New Product Development and PR 27 21
187 155
2025 2024
Directors' remuneration, included in staff costs £'000 £'000
Salaries and bonus 1,277 1,616
Share based payments (note 23) 108 74
Benefits 27 28
Pension contributions 4 4
1,416 1,722
Remuneration of the highest paid director:
2025 2024
Directors' remuneration, included in staff costs £'000 £'000
Salaries and bonus 309 450
Pensions 1 -
Benefits - 15
310 465
4. Staff costs (continued)
The highest paid director did not exercise any share options in the year and
had no shares receivable under long-term incentive schemes.
The highest paid director in 2025 is (2024: is not) a member of the
Company's money purchase pension scheme.
Number of executive directors to whom retirement benefits are accruing under
the money purchase pension scheme was 2 (2024: 2
Number of non- executive directors to whom retirement benefits are accruing
under the money purchase pension scheme was 2 (2024: Nil).
During the year no options over ordinary shares were of 25p each were
exercised or sold by the Directors.
In 2024 Directors exercised 250,000 options over ordinary shares of 25p at an
exercise price of 122p and sold for 485p.
The Directors of the Group are the only key management personnel.
5. Finance income and finance expenses
Year ended 31 December
2025 2024
£'000 £'000
Finance income
Interest received 242 116
242 116
Finance expenses
Lease liability interest (note 18) (473) (206)
Other interest relating to trade finance facilities (152) (135)
(625) (341)
6. Income tax
Year ended 31 December
2025 2024
£'000 £'000
Current tax expense
Current tax on profits for the period 3,852 5,335
Overprovided tax in respect of prior periods - (72)
3,852 5,263
Deferred tax expense
Origination and reversal of temporary differences (102) 265
Total tax expense 3,750 5,528
The reasons for the difference between the actual tax charge for the year and
the standard rate of corporation tax in the United Kingdom applied to profit
for the year before tax as follows:
Year ended 31 December
2025 2024
£'000 £'000
Profit for the period before taxation 18,102 23,761
Expected tax charge based on UK effective corporation tax rate of % (2024: 25% 4,525 5,940
UK standard rate)
Expenses not deductible/(income not allowable) (884) (175)
Other adjustments 239 -
Different tax rates applied in overseas jurisdiction (16) (68)
Losses utilised (114) -
Reduction of deferred tax on losses utilised - (97)
Overprovided tax in prior years - (72)
Total tax expense 3,750 5,528
The standard rate of UK corporation tax is 25% (2024: 25%). The Group's
effective tax rate for the year is 20.72% (2024: 23.27%).
7. Subsidiaries
At the period end, the Group has the following subsidiaries:
Subsidiary name Nature of business Place of incorporation Percentage owned
Warpaint Cosmetics Group Limited Holding company England and Wales 100%
Warpaint Cosmetics (2014) Limited* Wholesaler England and Wales 100%
W7 Cosmetics India Private Limited** Wholesaler India 100%
Treasured Scents (2014) Limited Holding company England and Wales 100%
Treasured Scents Limited* Non - operating entity England and Wales 100%
Warpaint Cosmetics Inc. Holding company U.S.A. 100%
Retra Holdings Limited Holding company England and Wales 100%
Badgequo Limited* Wholesaler England and Wales 100%
Badgequo Hong Kong Limited* Supply chain management Hong Kong 100%
Jinhua Badgequo Cosmetics Trading Co., Ltd* Wholesaler People's Republic of China 100%
Marvin Leeds Marketing Services, Inc.* Wholesaler U.S.A. 100%
Warpaint Cosmetics (ROI) Limited Wholesaler Republic of Ireland 100%
Beaute Sales EU Limited Wholesaler England & Wales 100%
Brand Architekts Group Limited Holding company England and Wales 100%
The Brand Architekts Limited * Wholesaler England and Wales 100%
MR. Haircare Limited * Non - operating entity England and Wales 100%
InnovaDerma Limited * Holding company England and Wales 100%
InnovaDerma UK Limited * Non - operating entity England and Wales 100%
SkinnyTan UK Limited * Non - operating entity England and Wales 100%
InnovaDerma AUS & NZ Pty Ltd *(owned from 12 Februray 2025 to 12 September Wholesaler Australia 100%
2025)
Skinny Tan Pty * Wholesaler Australia 100%
Innova Science, Inc * Wholesaler U.S.A. 100%
* Indicates indirect interest
** incorporated 31 October 2025
All entities detailed above have been in existence for the whole of the
reporting period, except for W7 Cosmetics India Private Limited, which was
incorporated on 31 October 2025.
The registered office for all UK incorporated subsidiaries is Units B&C,
Orbital Forty-Six, The Ridgeway Trading Estate, Iver, Bucks. SL0 9HW, with the
exception of Beaute Sales EU Limited (Units 3 & 4 Zodiac Business Park,
High Road, Cowley, UB8 2GU as per CH, as below.
The registered office for Warpaint Cosmetics Inc. is 445 Northern Boulevard -
Great Neck, New York 11021.The registered office for Badgequo Hong Kong
Limited is 12F, 3 Lockhart Road, Wanchai, Hong Kong.
The registered office for W7 Cosmetics India Private Limited is M100 Basement,
Saket, Saket (South Delhi), New Delhi, South Delhi, 110017, Delhi, India.
The registered office for Jinhua Badgequo Cosmetics Trading Co. Ltd is Room
1401, Gongyuan Building No. 307 South Shuanglong Street, Wucheng District,
Jinhua, Zhejiang, China 321000.
The registered office for Marvin Leeds Marketing Services, Inc. is 225 West
34(th) Street, 9(th) Floor, New York, NY 10122.
7. Subsidiaries (continued)
The registered office for Warpaint Cosmetics (ROI) Limited is 6(th) Floor,
South Bank House, Barrow Street, Dublin 4, D04 TR29.
The registered office for Beaute Sales EU Limited is Units 3 & 4 Zodiac
Business Park, High Road, Cowley, Uxbridge, UB8 2GU.
The registered office of Innova Science Inc is 251 Little Falls Drive,
Wilmington, Delaware, USA.
The registered office of Skinny Tan Pty Limited is Level 42, 2-26 Park Street
Sydney NSW 2000 Australia.
The registered office of InnovaDerma Aus & NZ Pty Limited was Suite 743,
1 Queens Road, Melbourne, VIC 3004, Australia.
8. Goodwill
Cost £'000
At 1 January 2024, 31 December 2024 and 31 December 2025 8,086
Impairment
At 1 January 2024, 31 December 2024 and 31 December 2025 812
Net book value
At 31 December 2025 7,274
At 31 December 2024 7,274
Goodwill represents the excess of consideration over the fair value of the
Group's share of the net identifiable assets of the acquired business/CGU at
the date of acquisition. The carrying value as at 31 December 2025 includes
Treasured Scents (2014) Limited ("TS2014") (the Close-out business) of
£513,000, Retra Holdings Limited £6,207,000 and Marvin Leeds Marketing
Services, Inc. £554,000.
Impairment is calculated by comparing the carrying amounts to the recoverable
amount being the higher of value in use derived from discounted cash flow
projections or the fair value less costs to sell. A CGU is deemed to be an
individual division, and these have been grouped together into similar classes
for the purpose of formulating operating segments as reported in Note 2. The
discount rate for the CGU has been calculated using various assumptions to
arrive at the Weighted Average Cost of Capital ("WACC"). The WACC has been
calculated by weighting the required returns of interest bearing debt and
common equity in line with an estimated split of the capital structure of
market participants. Value in use calculations are based on a discounted cash
flow model ("DCF") for the subsidiary, which discounts expected cash flows
over a five-year period using a pre-tax discount rate of 13.5%. Cash flows
beyond the five-year period are extrapolated using a long-term average growth
rate of 2.0%.
The fair value less costs to sell was based on a multiple of earnings less
estimated costs to sell. For the year ended 31 December 2024, a multiple of
6.9 was applied. As the recoverable amount based on the fair value less costs
of disposal was, in each case, in excess of the carrying value, the value in
use was not calculated for that year. For the year ended 31 December 2025, a
multiple of 6.3 was applied. In addition, however, the value in use was also
calculated as referred to above.
Management have performed the annual impairment review as required by IAS 36
and have concluded that no impairment is indicated for TS2014, Retra Holdings
Limited ("Retra") or Marvin Leeds Marketing Services, Inc. ("LMS") as the
recoverable amounts exceed the respective carrying values.
8. Goodwill (continued)
Key assumptions and sensitivity to changes in assumptions
The key assumptions are based upon management's historical experience. The
calculation of VIU is most sensitive to the following assumptions:
· Discount rate - the pre-tax discount rate was estimated at 13.5% that
reflects current market assessments of the time value of money and the risks
specific to the asset.
· Growth Rate - used to extrapolate beyond the budget period and for
terminal values based on a long-term average growth rate of 2.0%.
· Operating cash flows - forecasts were prepared for each CGU
incorporating compound annual growth in revenues of 15% for LMS, 10% for Retra
and 5% for Treasured Scents over the next five years, with assumptions made
for the gross margin percentage and growth in administrative expenses. The
forecast EBITDA figures link into operating cash flow projections for each
CGU.
Sensitivity to changes in assumptions
The impairment review of the Group is sensitive to changes in the key
assumptions, most notably the pre-tax discount rate, the terminal growth rate,
the projected operating cash flows. Reasonable changes to these assumptions
are considered to be:
· 5.0% increase in the pre-tax discount rate;
· reduction in the terminal growth rate to 1%; and
· 10.0% reduction in projected operating cash flows.
Reasonable changes to the assumptions used, considered in isolation, would not
result in an impairment of goodwill.
9. Intangible assets
Brands Customer lists Patents Website Licences Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2024 3,802 8,241 244 49 6 12,342
Additions - - - 23 - 23
At 31 December 2024 3,802 8,241 244 72 6 12,365
Additions - - - 2 - 2
Acquired through 4,508 286 - - - 4,794
business combinations (note 12)
Disposals (152) - - - - (152)
At 31 December 2025 8,158 8,527 244 74 6 17,009
Accumulated amortisation and impairment
At 1 January 2024 3,799 8,241 161 42 6 12,249
Charge for the year - - 24 2 - 26
At 31 December 2024 3,799 8,241 185 44 6 12,275
Charge for the year 237 31 19 7 - 294
Impairment 122 - - - - 122
At 31 December 2025 4,158 8,272 204 51 6 12,691
Net book value
At 31 December 2025 4,000 255 40 23 - 4,318
At 31 December 2024 3 - 59 28 - 90
For details of securities and charges against intangible assets , please refer
to note 30.
Sale of Brands in the Year
On 27 June 2025, The Brand Architekts Limited (a wholly owned subsidiary of
Warpaint London PLC) disposed of all the inventory and intellectual property
associated with three brands (Mr Expert Solutions, The Solution, and Kind
Natured). The assets disposed had a total carrying value of £0.7 million,
comprising £0.548 million of inventory, £0.152 million of brand assets.
Total consideration received was £0.823 million, comprising £0.548 for
inventory and £0.275 million for brand assets, resulting in a gain on
disposal of £0.123 million, recognised in the consolidated statement of
comprehensive income (note 3). In addition, various Christmas Season brands,
acquired as part of the acquisition of The Brand Architekts Limited, were
discontinued during the year. These brands had a carrying value of £0.122
million, which were written off in full. The disposal and discontinuation of
these brands were undertaken as they were not considered critical to the
Group's ongoing strategic objectives.
10. Property, plant and equipment
Plant and machinery Fixtures and fittings Computer equipment Motor vehicles Total
£'000 £'000 £'000 £'000 £'000
Costs
At 1 January 2024 1,437 1,761 618 78 3,894
Additions 56 2,089 42 50 2,237
Disposals - (155) (2) (34) (191)
Foreign exchange gain - 1 - - 1
At 31 December 2024 1,493 3,696 658 94 5,941
Additions 1,115 952 117 - 2,184
Acquired through 81 - - - 81
business combinations(note 12)
Disposals (1) (348) - - (349)
Foreign exchange gain/(loss) 3 (57) (2) - (56)
At 31 December 2025 2,691 4,243 773 94 7,801
Accumulated depreciation
At 1 January 2024 1,049 1,165 381 54 2,649
Charge for year 99 741 83 11 934
Disposals - (135) (1) (34) (170)
Foreign exchange gain - 1 - - 1
At 31 December 2024 1,148 1,772 463 31 3,414
Charge for year 232 941 85 16 1,274
Disposals - (242) - - (242)
Foreign exchange loss - (15) (3) - (18)
At 31 December 2025 1,380 2,456 545 47 4,428
Net book value
At 31 December 2025 1,311 1,787 228 47 3,373
At 31 December 2024 345 1,924 195 63 2,527
11. Right-of-use assets
Leasehold property Computer equipment Total
£'000 £'000 £'000
Costs
At 1 January 2024 8,998 77 9,075
Additions 66 - 66
Disposals (139) - (139)
At 31 December 2024 8,925 77 9,002
Additions 6,888 - 6,888
Modification 76 76
At 31 December 2025 15,889 77 15,966
Accumulated amortisation
At 1 January 2024 3,718 77 3,795
Charge for the year 1,273 - 1,273
Disposals (139) - (139)
At 31 December 2024 4,852 77 4,929
Charge for the year 1,524 - 1,524
At 31 December 2025 6,376 77 6,453
Net Book Value
At 31 December 2025 9,513 - 9,513
At 31 December 2024 4,073 - 4,073
The weighted average incremental borrowing rate applied to measure lease
liabilities and Right of use assets on initial recognistion is 6.85% (2024:
4.16%) for leasehold property.
12. Business combination/disposal during the period
12 (a) Business combination during the period
On 12 February 2025 the Group acquired 100% of the voting equity instruments
of Brand Architekts Group Plc ("Brand Architekts"), Brand Architekts is a
beauty brand specialist which offers a portfolio of problem-solving challenger
beauty brands, sold throughout the UK and internationally. Brand Architekts'
focus is on brands and products that engender high levels of consumer loyalty
and reflect the focus on high-performance problem-solving solution-led brands
for everyday beauty. Brand Architekts' brand portfolio encompasses female
skincare, self-tan and male grooming. Brands (including Super Facialist,
Skinny Tan and Dirty Works) are available on the high street in leading
pharmacy and drugstore chains; in national grocery stores; on the platforms of
global e-tailers; and through ecommerce websites.
Brand Architekts operaties in a similar sector to the Group and its
acquisition will further bolster Warpaints' growth opportunities and
relatively low risk. In addition, Brand Architeks has a number of high-quality
health beauty and personal care brands with a well established customer base
which complements Warpaint's existing customer relationships and its brand
portfolio. The acquisition will strengthen the enlarged Warpaint's customer
proposition and facilitate cross -selling opportunities by leveraging a wider
brand offering and broader customer relationships.
In addition, while Brand Architekts has grown its gross margins over recent
financial periods, it carries a high overhead cost base relative to the level
of gross profit generated by the business, in part as a result of being a
small Company carrying the corporate and governance costs associated with a
public quotation. The Warpaint Board believes that the level of overheads
relative to the scale of the Brand Architekts Group is inefficient and has
impacted profitability. Warpaint believes that the Acquisition will provide
the opportunity to generate cost synergies and reduce overheads to a more
efficient level which should increase Brand Architekts' profitability in the
future.
12. Business Combination during the period (continued)
12 (a) Business combination during the period
Fair value
£'000
Non-current assets
Intangible assets
Goodwill
Brands 4,508
Customer relationships 286
Property plant and equipment 81
Retirement benefit surplus 1,539
Deferred tax asset 3,183
Current assets
Inventories 3,111
Trade and other receivables 4,819
Cash 5,976
Current liabilities
Trade and other payables (3,514)
Tax payable (2)
Non- Current liabilities
Deferred tax (1,583)
Total net assets 18,404
Fair value of consideration paid
Cash 13,338
Shares 542
Total consideration 13,880
Negative goodwill 4,524
103,422 shares of £0.25 each per share were issued at £5.24, Warpaint's
share price on 4 December 2024.
The fair value of identifiable assets and liabilities acquired which was a net
value of £18.4 million exceed the total consideration payable of £13.8
million. Accordingly, the excess gives rise to negative goodwill, known as a
"gain on bargain purchase" totalling £4.5 million.
Business Combination during the period(continued)
12 (a) Business combination during the period
As part of the acquisition of Brand Architekts, the Group recognised a gain on
bargain purchase of £4.524 million, representing the excess of the fair value
of the identifiable assets acquired and liabilities assumed over the
consideration transferred.
The gain on bargain purchase arose principally because, at the acquisition
date, Brand Architekts was loss‑making and experiencing ongoing cash
outflows, which adversely affected its valuation and resulted in the business
being acquired at a price below the fair value of its identifiable net assets.
In accordance with IFRS 3, management reassessed the identification and
measurement of all identifiable assets acquired, and liabilities assumed and
concluded that all relevant items had been appropriately recognised and
measured at fair value at the acquisition date.
Separately, following the acquisition, the Group expects to realise
operational efficiencies and cost savings through the integration of the
acquired business, particularly through the reduction of overhead costs.
Exceptional items, include £426,000, directly attributable acquisition
costs as a result of the acquisition of Brand Architekts Group PLC.
Since the acquisition date, Brand Architekts has contributed £12.2 million to
group revenues and incurred a loss of £0.1 million against group profit
before tax (this being after exceptional costs of acquiring the business in
the year). If the acquisition had occurred on 1 January 2025, the Group's
revenue would have been £106.7 million and the Group's profit before tax for
the period would have been £16.4 million.
12 (b) Business disposal during the period
On 12 September 2025, InnovaDerma Limited, a wholly owned subsidiary of the
Group, sold its 100% shareholding in InnovaDerma AUS & NZ Pty Ltd. The
subsidiary operated in Australia and New Zealand selling men's beauty and
healthcare products under the Charles & Lee brand and was acquired as part
of the earlier acquisition of The Brand Architekts business. At the
acquisition date, no value was attributed to the Charles & Lee brand, as
InnovaDerma AUS & NZ Pty Ltd had been loss‑making for a number of years.
Following the acquisition, the Group received and accepted an offer to dispose
of the business, including the Charles & Lee brand. The disposal resulted
in a loss of £44,000 compared to the net assets of the business at the
completion date, which has been recognised as an exceptional item in the
consolidated financial statements (Note 3). The net assets disposed of
comprised of:
£'000
Current assets
Inventories 305
Trade and other receivables 38
Cash 11
Current liabilities
Trade and other payables (181)
Total net assets 173
Total consideration
Cash 129
Total consideration 129
Loss on disposal (44)
13. Employee benefits
Defined Contribution Pension Plan
The Group operates a defined contribution pension scheme. Contributions
payable to the Company's pension scheme are charged to the statement of
comprehensive income in the period to which they relate. The amount charged to
profit in each period was £235,267 (2024: £134,432).
Defined Benefit Pension Plan
The Group acquired the defined benefit pension plan on acquisition of Brand
Architekts on 12 February 2025
The Group operates a funded defined benefit plan, the Aerosols International
Pension Plan (the Plan) in the UK which provides both pensions in retirement
and death benefits to members. Key characteristics of the plan are detailed
below.
Payments made by the Company to the Plan and in respect of Plan liabilities
were:
12 February to 31 December
2025
£000's
Deficit recovery payments 292
Plan administrative expenses 82
Pension Protection Fund premium -
Total 374
The amounts expensed in the Group Statement of Comprehensive Income were:
2025
£000's
In Operating profit:
Plan administrative expenses 67
Pension Protection Fund premium 12
79
In Finance income:
Interest receivable (79)
Total -
Based on the triennial valuation in 2023, a deficit reduction payment of
£318,000 per annum until 30 June 2033 was agreed. The scheme will have its
next triannual valuation in April 2026. The triennial valuation is a
mandatory, legal, actuarial assessment of a defined benefit pension scheme's
financial position conducted every three years. It calculates the difference
between assets and liabilities to determine if the scheme is properly funded
and determines the employer contribution rates needed. Current independent
valuations undertaken for the Company indicate the scheme is in surplus, such
that its assets exceed pension liabilities. The scheme surplus at 31 December
2025 has been valued at £3.3 million (30 June 2024: £0.8 million, 12
February 2025: £1.5 million) and has been included as an asset in the balance
sheet.
Anticipated payments by the Company in respect of plan administrative expenses
and the pension protection fund premium in the year ending 31 December 2026
are expected to be of a similar order of magnitude to payments in the current
period.
IAS 19 requires that the assets and liabilities to members of the Plan are
consolidated in these Group accounts using the valuation method prescribed in
the accounting standard. The effects of the application of IAS19 on the
statement of financial position at December 2025 are:
2025
£'000s
Remeasurement of defined benefit liabilities 1,429
Deferred tax on remeasurement of defined pension obligations (Note 19) (344)
Recognised in Other Comprehensive Income 1,085
Accounting standards require the discount rate used for valuations under IAS
19 'Employee Benefits' to be based on yields on high quality (usually
AA-rated) corporate bonds of appropriate currency, taking into account the
term of the relevant pension plan's liabilities. Corporate bond indices are
used as a proxy to determine the discount rate. At the reporting date, the
yields on bonds of all types were higher than they were at 12 February 2025.
This has resulted in higher discount rates being adopted for accounting
purposes compared to last year. This has decreased the fair value of the plan
liabilities as measured under IAS 19, which, combined with an improvement in
the fair value of the scheme's assets, has translated into a decreased
liability under the IAS 19 methodology. For accounting purposes at 31
December 2025, the Group recognised under IAS 19 a net asset of £3,339.
Under the rules of the scheme, the Company has an unconditional right to a
refund of surplus under the principles of IFRIC 14 where the Company elects to
"run-off" the Scheme until there are no liabilities left to be paid and only
assets remain before choosing to terminate allowing the Trustees and Employer
to wind-up the Scheme.
The Company has therefore recognised a surplus in full as at 31 December 2025.
No additional minimum funding liability has been recognised in relation to the
Company's ongoing deficit reduction contributions to the Scheme as the surplus
is unrestricted.
13. Employee benefits (continued)
(a) The actuarial assumptions used at the Statement of Financial Position
date were as follows:
2025
Discount rate 5.65%
Inflation assumption (RPI) 2.65%
Inflation assumption (CPI) 2.35%
Deferred revaluation for benefits before retirement
GMP Fixed
Non-GMP 2.4%
Rate of increase in pensions in payment:
CPI, max 3% 1.95%
RPI, max 5% 2.60%
RPI, max 2.5% 1.85%
Mortality assumptions:
Life expectancy of male aged 45 now 21.9
Life expectancy of female aged 45 now 20.7
Life expectancy of male aged 65 in 20 years 24.3
Life expectancy of female aged 65 in 20 years 22.9
Cash commutation: 95% of members take maximum tax-free cash using Scheme factors (no change to assumption)
Mortality (current and future pensioners) S4PXA tables with a 1-year age rating, future improvements in line with CMI_2024 and a long term improvement rate of 1.25% p.a.
The weighted-average duration of the defined benefit obligation at 31 December
2025 was 13 years.
The assumptions used in determining the overall expected return on the plan's
assets have been set with reference to yields available on corporate bonds.
b) The assets in the plan at the Statement of Financial Position date were
as follows:
Unquoted Investments 2025
Market value
£'000
Equity* 10,390
Property* 1,824
Index Linked Gilts 1,575
Corporate Bonds 2,329
Diversified Growth Funds 3,153
LDI Funds 4,173
Insureds 117
Cash/Other 104
Fair value of plan assets 23,665
*Equity and property are invested through pooled investment vehicle, which
provides indirect exposure to these asset classes without direct ownership
13. Employee benefits (continued)
(c) Amounts recognised in the Statement of Financial Position:
2025
£'000
Present value of funded obligations (20,326)
Fair value of plan assets 23,665
Net asset recognised in the Statement of Financial Position 3,339
A surplus, based on an actuarial valuation on 31 December 2025, has been
recognised within the financial statements. The Company has access to economic
benefit in the future where the scheme is in surplus from reduced
contributions and, as a result, no onerous liability in respect of future
contributions is recognised.
(d) Reconciliation of opening and closing balances of the present value of
the defined benefit obligation:
2025
£'000
Benefit obligation at 12 February 2025 (21,299)
Movement in the year:
Notional finance cost (982)
Actuarial gains - financial 1,422
Actuarial losses - demographic (90)
Actuarial losses - experience (252)
Net benefits paid out 875
Benefit obligation at end of year (20,326)
(e) Reconciliation of opening and closing balance of the fair value of plan
assets:
2025
£'000
Fair value of plan assets at 12 February 2025 22,838
Movement in the year:
Notional interest on plan assets 1,061
Return on assets, excluding interest income 349
Contributions - employer 292
Benefits paid out (875)
Fair value of plan assets at end of year 23,665
13. Employee benefits (continued)
(f) Re-measurement of the net defined benefit liability to be shown in other
comprehensive income
2025
£'000
Net re-measurement - financial 1,422
Net re-measurement - demographic (90)
Net re-measurement - experience (252)
Return on assets, excluding interest income 349
Impact of asset ceiling -
1,429
Deferred taxation (344)
Total re-measurement of the net defined benefit liability to be shown in OCI 1,085
(g) History of plan - the history of the plan for the current year and prior
years is as follows:
Statement of Financial Position 2025 12 February 2025
£'000
£'000
Present value of defined benefit obligation (20,326) (21,299)
Fair value of plan assets 23,665 22,838
At end of year 3,339 1,539
The weighted-average duration of the defined benefit obligation at
31 December 2025 was 13 years.
Characteristics of the Plan and the risks associated with the Plan
a) Information about the characteristics the Plan
i. The Plan provides pensions in retirement and death benefits to
members. Pension benefits are linked to a member's final salary at retirement
and their length of service. As of 31 December 2015, the Plan closed to future
accrual.
ii. The Plan is a registered plan under UK legislation and was
contracted out of the State Second Pension.
iii. The Plan is subject to the plan funding requirements outlined in UK
legislation. The last scheme funding valuation of the Plan was as at 5 April
2023 and revealed a deficit of £4,612,000.
iv. The Plan membership as at 5 April 2023 comprised 217 deferred
pensioner members and 161 pensioner members.
v. The Plan was established from 1 January 1987 under trust and is
governed by the Plan's trust deed and rules dated 19 January 2001. The
Trustees are responsible for the operation and the governance of the Plan,
including making decisions regarding the Plan's funding and investment
strategy in conjunction with the Company.
b) Information about the risks of the Plan to the Company
The Plan exposes the Company to actuarial risks such as market (investment)
risk, interest rate risk, inflation risk, currency risk and longevity risk.
(see below). The small number of Plan members means that the Plan and
ultimately the Company are exposed to the experience (such as life expectancy
and take-up of member options) of individual members. The Plan does not expose
the Company to any unusual Plan-specific or Company-specific risks.
Market (investment) risk
The present value of the scheme's liabilities is calculated using a discount
rate. The rate is set by referencing market yields available on high quality
corporate bonds (generally considered to be rated AA or equivalent) of
appropriate currency and term to the liabilities. There is a risk for
potential financial losses due to broad market fluctuations that affect all
investments simultaneously.
The Trustee holds a proportion of the Scheme's assets in pooled funds invested
in gilts, corporate bonds and liability driven investment funds to provide
some degree of matching with the Scheme's liabilities. Liability driven
Investment funds and an index-linked gilts fund are used to provide a degree
of price inflation and interest rate matching with the liabilities.
Interest rate and currency risk
Interest and exchange rate fluctuations can affect the value of assets,
liabilities, and net interest income. The scheme has indirect exposure to
currency risk as the scheme assets and liabilities are predominantly sterling
and therefore the overall risk is considered to be low.
Inflation risk
The rate of inflation can affect the level of revaluation to pensions in
deferment and increases to pensions in payment.
Variation in inflation rates can lead investors to be concerned about the
potential for future inflation to be higher than anticipated.
The Scheme's investment strategy is to invest broadly 75% in return seeking
assets and 25% in matching assets, which include leveraged liability driven
investment funds in order to hedge some of the Scheme's interest rate and
inflation exposure.
This strategy reflects the Scheme's liability profile and the Trustees' and
Company's attitude to risk.
Longevity risk
The risk that a scheme member will outlive their expected life span, leading
to potential shortfalls in retirement savings or higher than anticipated
payout obligations. The present value of the scheme's liabilities is
calculated on the best estimate of the mortality of the scheme's participants.
The latest published tables from UK self-administered pension schemes ("SAPS")
tables are used with consideration of an adjustment for the specific
demographics of the Scheme members.
13. Employee benefits (continued)
c) Virgin Media vs NTL Pension Trustees II Limited
In June 2023, the High Court judged that amendments made to the Virgin Media
scheme were invalid because the necessary S37 certification associated to
these historic amendments was not prepared or documented appropriately. The
case was subsequently reviewed by the Court of Appeal in July 2024 which
upheld the High Court's decision. The High Court's decision has wide ranging
implications, affecting other schemes that were contracted-out on a
salary-related basis and made amendments between April 1997 and April 2016.
Historic scheme amendments without the appropriate certification might now be
considered invalid, leading to additional, unforeseen liabilities.
In September 2025, the Government introduced an amendment to the forthcoming
Pension Schemes Bill that intends to allow affected schemes to obtain
retrospective written actuarial confirmation that historic benefit changes met
the relevant statutory requirements. The Company, together with the scheme
trustees, continues to assess whether the proposed legislation will be
applicable to the Group's scheme and, if so, the circumstances in which
retrospective actuarial confirmation of historic benefit changes may be
required. While this assessment is ongoing, on the basis of the information
available at the reporting date, management is not aware of any indications of
non‑compliance with the relevant statutory requirements. There remains
uncertainty as to the extent to which the proposed legislation may affect the
measurement of the Group's defined benefit obligations. Accordingly, no
adjustment has been made to the carrying amount of the defined benefit pension
liabilities recognised in the financial statements. The position will continue
to be monitored and reassessed as further clarity becomes available.
Amount, timing and uncertainty of future cash flows
a) Sensitivity analysis
Please note that the results in the disclosures are inherently volatile,
particularly the figures shown on the statement of financial position. The
results disclosures are dependent on the assumptions chosen by the Directors.
The table below shows the approximate impact of varying the key assumptions
adopted as at 31 December 2025.
2025
£'000
Impact on scheme liabilities
Discount rate (increase of 0.25% p.a.) Decrease by 690
Rate of RPI inflation (increase of 0.25% p.a.) Increase by 430
Mortality (1.5% long term rate, rather than 1.25%) Increase by 110
b) Description of asset-liability matching strategies
The Trustees hold a proportion of the Plan's assets in pooled funds invested
in gilts, corporate bonds and liability driven investment funds to provide
some degree of matching with the Plan's liabilities. Liability driven
investment funds and an index-linked gilts fund are used to provide a degree
of price inflation and interest rate matching with the liabilities.
c) The Plan's investment strategy
The Plan's investment strategy is to invest broadly 75% in return seeking
assets and 25% in matching assets, which include leveraged liability driven
investment funds in order to hedge some of the Plan's interest rate and
inflation exposure. This strategy reflects the Plan's liability profile and
the Trustees' and Company's attitude to risk.
The Plan holds a number of annuity policies which match a portion of pensions
in payment.
14. Inventories
As at 31 December
2025 2024
£'000 £'000
Finished goods 31,952 31,615
Provision for impairment (601) (423)
31,351 31,192
The cost of inventories recognised as an expense and included in 'cost of
sales' amounted to £49.5 million in the year ended 31 December 2025 (2024:
£50.2 million).
The cost of inventories recognised as an expense includes a provision for
impairment in the year of £178,000 (2024: £45,000).
15. Trade and other receivables
As at 31 December
2025 2024
£'000 £'000
Trade receivables - gross 17,136 13,562
Provision for impairment of trade receivables (151) (85)
Trade receivables - net 16,985 13,477
Other receivables 966 465
Prepayments 2,006 2,394
Total 19,957 16,336
The directors consider that the carrying values of trade and other
receivables, excluding prepayments, measured at book value and amortised cost
approximates to their fair value.
The individually impaired receivables relate to the supply of goods to
customers. A provision is recognised for amounts not expected to be recovered.
Movements in the accumulated impairment losses on trade receivables were as
follows.
15. Trade and other receivables (continued)
As at 31 December
2025 2024
£'000 £'000
Accumulated impairment losses at 1 January 85 129
Acquired balances - Brand Architekts 101 -
Additional impairment losses recognised/(released) during the year, net 995 (39)
Amounts written off during the year as uncollectible (1,030) (5)
Accumulated impairment losses at 31 December 151 85
The impairment losses recognised during the year are net of a credit of
£0.009 million (2024: £Nil) relating to the recovery of amounts previously
written off as uncollectable.
16. Cash and cash equivalents
Cash and cash equivalents include the following for the purposes of the cash
flow statement:
As at 31 December
2025 2024
£'000 £'000
Cash at bank and in hand 15,985 7,866
Cash equivalents (restricted) - 14,021
15,985 21,887
In 2024, Cash equivalents (restricted) refers to cash held in escrow and could
only be used for the acquisition that took place in February 2025 (see note
12).
17. Trade and other payables
As at 31 December
2025 2024
£'000 £'000
Current
Trade payables 3,307 3,119
Social security and other taxes 1,162 1,101
Other payables 398 85
Accruals 3,016 3,325
Total 7,883 7,630
The directors consider that the carrying values of trade and other payables
excluding social security and other taxes measured at book value and amortised
cost approximates to their fair value.
Accruals comprise goods in transit accruals of £841,999 (2024: £1,353,276)
while the remaining are accruals for usual business expense.
18. Lease liabilities
As at 31 December
2025 2024
£'000 £'000
Lease liabilities
Repayable within 1 year 1,275 1,326
Repayable within 2 - 5 years 2,977 2,263
Repayable in more than 5 years 5,564 656
9,816 4,245
The Group did not enter into any short-term leases or leases of low-value
assets during the period. Accordingly, no amounts have been recognised in
profit or loss in respect of such leases under the recognition exemptions
permitted by IFRS 16 Leases.
Undiscounted lease payments
As at 31 December
2025 2024
£'000 £'000
Lease liabilities
Repayable within 1 year 1,914 1,476
Repayable within 2 - 5 years 5,096 2,605
Repayable in more than 5 years 7,780 689
Total 14,790 4,770
18. Lease liabilities (continued)
Lease liabilities
As at 31 December
Leasehold property Total
£'000 £'000
As at 1 January 2024 5,449 5,449
Lease additions 66 66
Interest expense 206 206
Lease payments (1,476) (1,476)
As at 31 December 2024 4,245 4,245
Lease additions 6,964 6,964
Interest expense 473 473
Lease payments (1,866) (1,866)
As at 31 December 2025 9,816 9,816
Nature of lease liabilities
The Group leases a number of properties in the United Kingdom and United
States of America.
The interest rates expected are as follows:
As at 31 December
2025 2024
% %
Interest rates 5.74 6.74¹
Note 1: Base rate + 1.99%
19. Deferred tax
Deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. The carrying amount of deferred tax assets is
reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all
or part of the assets to be recovered.
Deferred tax is calculated in full on temporary differences under the
liability method using tax rate of 25%.
The movement on the deferred tax account is as shown below:
2025 2024
£'000 £'000
At 1 January 177 412
Recognised in the profit and loss
Tax expense 102 (265)
Recognised in other comprehensive income
Actuarial gain on defined benefit scheme (450) -
Recognised in equity
Share based payment (208) 30
-
As at 31 December (379) 177
Arising on business combination 1,600 -
As at 31 December 1,221 177
Details of the deferred tax asset/(liability), amounts recognised in profit
and loss and amounts recognised in other comprehensive income are as follows:
Asset Liability Net (Charged)/credited to the profit and loss (Charged)/ (Charged)/
(credited) /to Other comprehensive income credit to equity
2025 2025 2025 2025 2025 2025
£'000 £'000 £'000 £'000 £'000 £'000
Accelerated capital allowances 14 (640) (626) (236) - -
Available losses 3,678 - 3,678 273 - -
Share based payment 37 - 37 (100) - (208)
Pensions - (835) (835) 24 (450) -
Intangible assets - (1,109) (1,109) 65 - -
Right of use assets - (2,378) (2,378) (2,378) - -
Lease liability 2,454 - 2,454 2,454 - -
Total asset (liability) 6,183 (4,962) 1,221 102 (450) (208)
Set off of tax liability (4,962) 4,962 - - - -
1,221 - 1,221 102 (450) (208)
Asset Liability Net (Charged)/credited to the profit and loss (Charged)/ (Charged)/
(credited) /to Other comprehensive income creditited to equity
2024 2024 2024 2024 2024 2024
£'000 £'000 £'000 £'000 £'000 £'000
Accelerated capital allowances - (391) (391) (211) - -
Available losses 222 - 222 (56) - -
Share based payment 346 - 346 2 - 30
Total asset (liability) 568 (391) 177 (265) - 30
Set off of tax liability - - - - - -
568 (391) 177 (265) - 30
19. Deferred tax (continued)
The deferred tax asset has arisen from loss carry forward for LMS amounting to
£1,842,067 (2024: £1,198,923) and recognised at a rate of 21% amounting to
£509,826 (2024: £222,000) and losses carried forward from Brand Architekts
Group Limited, which could be utilised amounting to £5,200,000, recognised at
rate of 25% amounting to £1,300,000.
Deferred tax amounting to £36,075 (2024:£244,368*) has been recognised in
the share based payment reserve, in the Statement of Changes in Equity.
Deferred tax recognised amounting to £450,000 has been charged to other
comprehensive income in respect for remeasurement of defined pension
obligations.
*In the prior period £346,316 was disclosed, this being the deferred tax
asset in respect of share based payments recognised in the statement of
financial position
20. Dividends
Year to December 2025 Paid Amount per share Total £'000
Final dividend - 2024 04 July 25 7.5p 3,232
Interim dividend - 2025 21 Nov 25 4p 6,059
9,291
Year to December 2024 Paid Amount per share Total £'000
Final dividend - 2023 05 July 24 6p 4,658
Interim dividend - 2024 22 Nov 24 3.5p 2,721
7,379
The Group has proposed a final dividend for the year ended 31 December 2025 of
9.0p per share.
21. Called up share capital
No. of shares
'000 £'000
Allotted and issued
Ordinary shares of £0.25 each:
At 1 January 2024 77,257 19,314
Issued on 9 May 2024 86 21
Issued on 30 May 2024 290 73
Issued on 19 September 2024 110 28
Issued on 9 December 2024 2,941 735
At 31 December 2024 80,684 20,171
Issued on 12 February 2025 26
103
At 31 December 2025 80,787 20,197
On 9 May 2024, the Company issued 85,895 equity shares with par value of
£0.25 per share for £2.375 per share. The entire amount was paid in cash. No
shares were allotted other than for cash. £182,527 was recognised in share
premium.
On 30 May 2024, the Company issued 290,000 equity shares with par value of
£0.25 per share for £1.22 per share. The entire amount was paid in cash. No
shares were allotted other than for cash. £281,300 was recognised in share
premium.
On 19 September 2024, the Company issued 110,000 equity shares with par value
of £0.25 per share for £1.22 per share. The entire amount was paid in cash.
No shares were allotted other than for cash. £106,700 was recognised in share
premium.
On 9 December 2024, the Company issued 2,941,176 equity shares with par value
of £0.25 per share for £5.10 per share. The entire amount was paid in cash.
No shares were allotted other than for cash. £14,264,704 was recognised in
share premium.
On 12 February 2025, the Company issued 103,422 ordinary shares of £0.25 each
at £5.24 per share as partial consideration for the acquisition of Brand
Architekts Plc.
Expenses incurred on the issue of shares amounting to £Nil (2024: £447,000)
were deducted from Share Premium.
All ordinary shares carry equal rights.
22. Reserves
Share premium
The share premium reserve contains the premium arising on the issue of equity
shares, net of issue expenses incurred by the Company.
Retained earnings
Retained earnings represent cumulative profits or losses, net of dividends and
other adjustments.
Merger reserve
The merger reserve arose due to the group reconstruction in 2016. The effect
of the application of merger accounting principles on the merger reserve is
that the share capital and other distributable reserves that existed in
Warpaint Cosmetics Group Limited (the Company) as at the point Warpaint London
PLC legally acquired Warpaint Cosmetics Group Limited is accounted for as if
it had been in existence as at 31 December 2015 and as at 1 January 2015. The
corresponding entry being the merger reserve so the overall net assets as at
the comparative dates are not affected.
During the year, the balance on the merger reserve increased as a result of
the Company issuing equity shares as consideration for the acquisition of
Brand Architekt's (see note 12). In accordance with section 612 of the
Companies Act 2006, the excess of the fair value of the shares issued over
their nominal value has been credited to the merger reserve rather than the
share premium account.
Share option reserves
'Share option reserves' have arisen from the share-based payment charge. The
shares over which the options were issued are that of the parent company.
Foreign exchange reserves
'Foreign exchange reserves' have arisen on translation of foreign
subsidiaries.
23. Share based payments
The Company have granted options under two schemes:
Company Share Option Plan (CSOP)
These options are granted to key persons discharging managerial
responsibilities (PDMR's). The options are exercisable between three and ten
years from the date of grant, with the usual first exercise date being the 3rd
anniversary of the date of the grant. There are no performance conditions
attaching to these options.
Company Share Option scheme (unapproved)
Under the Company share option scheme which follows the Enterprise Management
Incentive (EMI) scheme rules. The options are exercisable between three and
ten years from the date of grant, with the usual first exercise date being the
3rd anniversary of the date of the grant. In general, there are no performance
conditions attaching to these options except or those issued on 5 December
2024. These Options are exercisable subject to certain non-market based
performance conditions being met, including that the compound annual growth
rate in the Company's Adjusted Basic earnings per share must exceed 10 per
cent. over the three financial years commencing 1 January 2025, subject to the
discretion of the Board.
Long term Investment Plan (LTIP)
Share options with an exercise price of 254.50p, equal to the closing
mid-market value immediately prior to the date of grant, and subject to the
achievement of demanding Earnings Per Share ("EPS") and Total Shareholder
Return ("TSR") performance conditions measured over a period of up to 5 years
were granted to certain directors.
All options are equity settled.
23. Share based payments (continued)
CSOP
Movements in the number of options and their weighted average exercise price
are as follows:
Weighted average exercise price (pence) Number of options Weighted average exercise price (pence) Number of options
2025 2025 2024 2024
Outstanding at the beginning of the year 382.51 990,200 313.54 675,781
Granted during the year - - 490.00 360,509
Adjustment 382.51 2,000 - -
Reclassified to EMI options 325.0 (38,156) - -
Exercised - - 216.7 (46,090)
Expired and lapsed during the year 417.9 (51,500) - -
Outstanding at the end of the year 382.92 902,544 382.51 990,200
The weighted average remaining contractual life of the options is 8.78 years
(2024: 9.79 years).
EMI
Weighted average exercise price (pence) Number of options Weighted average exercise price (pence) Number of options
2025 2025 2024 2024
Outstanding at the beginning of the year 367.44 839,073 177.08 839,456
Granted during the year - - 272.07 460,922
Adjustment 247.72 70 - -
Reclassified from CSOP options 325.0 38,156
Exercised - - 143.51 (461,305)
Outstanding at the end of the year 3655.00 877,299 367.44 839,073
The weighted average remaining contractual life of the options is 7.96 years
(2043: 8.96 years).
23. Share based payments (continued)
The following options over ordinary shares have been granted by the Company
and remain unexercised at the year end:
Share option scheme Exercise price Expiry period Number of options
Pence (years)
29 June 2017 EMI 237.50 10 10,842
20 May 2020 CSOP 49.50 10 10,000
01 March 2022 EMI 127.50 10 200,000
24 November 2023 CSOP 325.00 10 559,035
24 November 2023 EMI 325.00 10 205,465
30 October 2024 CSOP 490.00 10 333,509
30 October 2024 EMI 490,00 10 255,992
05 December 2024 EMI 490.00 10 205,000
At the date of grant, the options were valued using the Black-Scholes option
pricing model. The fair value of options granted and the assumptions used in
the calculations were as follows:
05 Dec 24 30 Oct 24 24 Nov 23 01 Mar 22 20 May 20 29 June 17
Expected volatility 42% 41% 40% 54% 76% 64%
Expected life (years) 3 3 3 3 3 3
Risk-free interest rate 4.03% 4.06% 4.35% 0.99% 0.01% 0.38%
Expected dividend yield 1.75% 1.75% 1.79% 4.94% 2.08% 2%
Fair value per option (£) 1.617 1.371 0.918 0.354 0.213 0.963
On 30 October 2024, the Company granted in aggregate 362,509 ordinary shares
of 25 pence each at an exercise price of 490 pence each under a Company Share
Option Plan (CSOP) scheme. The options are exercisable between three and ten
years from the date of grant, with the usual first exercise date being the 3rd
anniversary of the date of the grant.
On 30 October 2024, the Company granted in aggregate 255,992 ordinary shares
of 25 pence each at an exercise price of 490 pence each under an unapproved
Enterprise Management Incentive (EMI) scheme. The options are exercisable
between three and ten years from the date of grant, with the usual first
exercise date being the 3rd anniversary of the date of the grant.
On 05 December 2024, the Company granted in aggregate 205,000 ordinary shares
of 25 pence each at an exercise price of 490 pence each under an unapproved
Enterprise Management Incentive (EMI) scheme. The
options are exercisable between three and ten years from the date of grant,
with the usual first exercise date being the 3rd anniversary of the date of
the grant. The Options are exercisable subject to certain non-market based
performance conditions being met, including that the compound annual growth
rate in the Company's Adjusted Basic earnings per share must exceed 10 per
cent. over the three financial years commencing 1 January 2025, subject to the
discretion of the Board.
The charge in the statement of comprehensive income for the share-based
payments during the year was £619,356 (2024: £348,913).
24. Related party transactions
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation.
Key management personnel are considered to be the directors. Compensation of
the directors is disclosed in note 4 with the exception of dividends which are
disclosed in note 20.
The lease between Warpaint Cosmetics (2014) Limited and Direct Supplies (2014)
Group Limited is a 10 year lease which commenced on the 3 August 2016, with
annual rental payments of £138,800. During 2025, Warpaint Cosmetics (2014)
Limited paid rent in the sum of £138,800 (2024: £138,800) to Direct Supplies
(2014) Group Limited, of which S Bazini is a director. At the year end the
amount due to Direct Supplies (2014) Group Limited was £34,700 (2024:
£34,700).
The lease between Warpaint Cosmetics (2014) Limited and Trading Scents Group
Limited is a 10 year lease which commenced on the 3 August 2016, with annual
rental payments of £138,800. During 2025, Warpaint Cosmetics (2014) Limited
paid rent in the sum of £138,800 (2024: £138,800) to Trading Scents Group
Limited, of which E Macleod is a director. At the year end the amount due to
Trading Scents Group Limited was £34,700 (2024: £34,700).
During the year ended 31 December 2023, Warpaint Cosmetics (2014) Limited
entered into two lease agreements, for two additional units with Warpaint
Cosmetics Limited. The agreements relate to two leases to the 2 August 2026,
with annual rental payments of £138,000 and £110,250 respectively. Warpaint
Cosmetics (2014) Limited paid rent in the sum of £248,250 (2024: £248,250)
to Warpaint Cosmetics limited, of which S Bazini and E Macleod are directors.
At the year end the amount due to Warpaint Cosmetics Limited was £62,063
(2024: £62,063).
Warpaint Cosmetics (2014) Limited also entered into a 10 year lease agreement
with Warpaint Cosmetics Limited on the 3 August 2016, with annual rental
payments of £138,800. During 2025, Warpaint Cosmetics (2014) Limited paid
rent in the sum of £138,800 (2024: £138,800) to Warpaint Cosmetics Limited,
of which E Macleod and S Bazini are directors. At the year end the amount due
to Warpaint Cosmetics Limited was £34,700 (2024: £34,700).
During 2025, Retra Holdings Limited paid rent in the sum of £410,107 (2024:
£410,107) to Warpaint Cosmetics Limited, of which E Macleod and S Bazini are
directors. The leases between Retra Holdings Limited and Warpaint Cosmetics
Limited are two 10 year leases which commenced on 11(th) March 2018 with
annual rental payments of £225,000, and £185,107 respectively. At the year
end the amount due to Warpaint Cosmetics Limited was £34,176 (2024:
£34,176).
Paul Hagon, an executive director of Warpaint London plc ("Warpaint"), is a
member of Ward & Hagon. Ward & Hagon were paid £255,000 fees (2024:
£225,000).
24. Related party transactions (continued)
Financing of the Acquisition of Brand Architekts PLC - Directors' Loans
The Company completed its purchase of the entire ordinary share capital of
Brand Architekts PLC in February 2025 (see note 12). Before raising the funds
through a placing which completed on 9 December 2024, the Company received
loans from two of its Directors in order to demonstrate adequate cash
resources prior to the placing of new shares in the Company.
The Directors' Loans in the year consisted of:
· a loan from Sam Bazini of £8,500,000 to Warpaint London PLC; and
· a loan from Eoin Macleod of £5,500,000 to Warpaint London PLC.
The Directors' Loans were each on the same terms and interest was payable
by the Company on the full amount of each Directors Loan at the Bank of
England's base rate plus 0.5 percent, until the date on which the relevant
loan was repaid in full, there was no fixed term, and no security was provided
by the Company.
The Director's Loans were made on the 29(th) November 2024, and repaid in full
on the 10(th) December 2024. There were no amounts outstanding at the end of
the year
25. Financial instruments
Capital risk management
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies. The overall objective of the Board is to
set policies that seek to reduce risk as far as possible without unduly
affecting the Group's competitiveness and flexibility. The Group reports in
Sterling. All funding requirements and financial risks are managed based on
policies and procedures adopted by the Board of Directors.
The Group manages its capital to ensure its ability to continue as a going
concern and to maintain an optimal capital structure to reduce cost of
capital. The capital structure of the Group comprises equity attributable to
equity holders of the Company consisting of invested capital as disclosed in
the Statement of Changes in Equity and cash and cash equivalents.
The Group's invested capital is made up of share capital, share premium and
retained earnings totalling £93,326,000 as at 31 December 2025 (2024:
£88,709,000) as shown in the statement of changes in equity.
The Group maintains or adjusts its capital structure through the payment of
dividends to shareholders and issue of new shares.
25. Financial instruments (continued)
Year ended 31 December
2025 2024
£'000 £'000
Financial assets
Financial assets at amortised cost:
Trade and other receivables 17,951 13,942
Cash and cash equivalents 15,985 21,887
Financial assets measured at fair value through the profit and loss:
Derivative financial instruments - 1,340
33,936 37,169
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables (6,721) (6,529)
Lease liabilities (9,816) (4,245)
Financial liabilities measured at fair value through the profit and loss:
Derivative financial instruments (129) -
(16,666) (10,774)
Financial assets measured at fair value through the profit and loss comprise
derivative financial instruments.
Financial assets measured at amortised cost comprise trade receivables and
other receivables, excluding prepayments and cash and cash equivalents.
Financial liabilities measured at amortised cost comprise trade payables and
other payables, and lease liabilities but exclude social security costs and
other taxes.
Cash and cash equivalents
This comprises cash and short-term deposits held by the Group). The carrying
amount of these assets approximates their fair value.
General risk management principles
The Group's activities expose it to a variety of risks including market risk
(interest rate risk), credit risk and liquidity risk. The Group manages these
risks through an effective risk management programme and through this
programme, the Board seeks to minimise potential adverse effects on the
Group's financial performance. The Directors have an overall responsibility
for the establishment of the Group's risk management framework. A formal risk
assessment and management framework for assessing, monitoring and managing the
strategic, operational and financial risks of the Group is in place to ensure
appropriate risk management of its operations.
25. Financial instruments (continued)
The following represent the key financial risks that the Group faces:
Market risk
The Group's activities expose it to the financial risk of interest rates.
The Group, along with other businesses, will face the risk of inflationary
pressures through commodities cost increases.
Interest rate risk
The Group has minimal interest rate exposure as it has no external borrowing.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or a
counterparty to a financial instrument fails to meet its contractual
obligations.
The Group's principal financial assets are trade and other receivables and
bank balances and cash. The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.
The Group's credit risk is primarily attributable to trade receivables. The
Group has a policy of assessing credit worthiness of potential and existing
customers before entering into transactions. There is ongoing credit
evaluation on the financial condition of accounts receivable using independent
ratings where available or by assessment of the customer's credit quality
based on its financial position, past experience and other factors. The Group
manages the collection of its receivables through its ongoing contact with
customers so as to ensure that any potential issues that could result in
non-payment of the amounts due are addressed as soon as identified. The Group
makes a provision in the financial statements for expected credit losses based
on an evaluation of historical data and applies percentages based on the
ageing of trade receivables.
The maximum exposure to credit risk in respect of the above is the carrying
value of financial assets recorded in the financial statements. As at 31
December 2025, the Group has trade receivables of £17,136,000 (2024:
£13,562,000).
25. Financial instruments (continued)
The following table provides an analysis of trade receivables that were due,
but not impaired, at each financial year end. The Group believes that the
balances are ultimately recoverable based on a review of past impairment
history and the current financial status of customers.
As at 31 December
2025 2024
£'000 £'000
Current 12,900 7,000
1 - 30 days 2,715 4,560
31 - 60 days 869 1,573
61 - 90 days 418 185
91 + days 234 244
17,136 13,562
Provision for impairment of trade receivables (151) (85)
Total trade receivables - net 16,985 13,477
The Directors are unaware of any factors affecting the recoverability of
outstanding balances at 31 December 2025 and, consequently, no further
provisions have been made for bad and doubtful debts.
The allowance for bad debts has been calculated using a 12-month lifetime
expected credit loss model, as set out below, in accordance with IFRS 9.
As at 31 December As at 31 December
2025 2024
£'000 % £'000 £'000 % £'000
Current 12,900 0.135% 17 7,000 0.135% 9
1 - 30 days 2,715 0.405% 11 4,560 0.405% 18
31 - 60 days 869 1.215% 11 1,573 1.215% 19
61 - 90 days 418 3.645% 15 185 3.645% 7
91 + days 234 41.880% 98 244 13.115% 32
152 85
25. Financial instruments (continued)
Credit quality of financial assets
As at 31 December
2025 2024
Trade receivables, gross (note 15): £'000 £'000
Receivable from large companies (see below for definition) 11,325 6,284
Receivable from small or medium-sized companies 1,575 716
Total neither past due nor impaired 12,900 7,000
For the purpose of the Group's monitoring of credit quality, large companies
or groups are those that, based on information available to management at the
point of initially contracting with the entity, have annual turnover in excess
of £100,000 (2024: £100,000).
As at 31 December
2025 2024
Past due but not impaired: £'000 £'000
Less than 30 days overdue 2,686 4,533*
30 - 90 days overdue 1,261 1,732
91+ days 138 212
Total past due but not impaired 4,085 6,477
Lifetime expected loss provision:
Less than 30 days overdue 29 27
30 - 90 days overdue 26 26
91+ days 97 32
Total lifetime expected loss provision (gross) 152 85
Less: Impairment provision (152) (85)
Total trade receivables, net of provision for impairment 16,985 13,477
Cash and cash equivalents, neither past due nor impaired.
*The 2024 figure has been amended from £4,542.
25. Financial instruments (continued)
Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. The Group's policy is to ensure that it will
always have sufficient cash to allow it to meet its liabilities when they
become due. To achieve this aim, it closely monitors its access to bank and
other credit facilities in comparison to its outstanding commitments on a
regular basis to ensure that it has sufficient funds to meet the obligations
as they fall due. Bank and loan facilities are available within the Group but
they were not utilised during the financial year or after the year end.
The Board receives monthly cash balance updates and weekly sales and margin
reports marked against budget. At the start of each year the Board approve and
adopt a budget and cash flow for the next 24 months, the CFO monitors these
and reports any material divergences to the Board, so that management can
ensure that sufficient funding is in place as it is required. The budget and
cash flow are updated at the end of each year, for the following 24 months.
The tables below summarise the maturity profile of the combined group's
non-derivative financial liabilities at each financial year end based on
contractual undiscounted payments, including estimated interest payments where
applicable:
Year ended 31 December 2025
Less than 6 months Between 6 months and 1 year Between 1 and 5 years Over 5 years Total
£'000 £'000 £'000 £'000 £'000
Trade payables 3,382 - - - 3,382
Other payables 398 - - - 398
Accruals 3,474 - - - 3,474
Lease liabilities 957 957 5,096 7,780 14,790
8,211 957 5,096 7,780 22,044
Year ended 31 December 2024
Less than 6 months Between 6 months and 1 year Between 1 and 5 years Over 5 years Total
£'000 £'000 £'000 £'000 £'000
Trade payables 3,119 - - - 3,119
Other payables 85 - - - 85
Accruals 3,325 - - - 3,325
Lease liabilities 738 738 2,605 689 4,770
7,267 738 2,605 689 11,299
25. Financial instruments (continued)
The borrowings of the subsidiary companies, Retra Holdings Limited and
Badgequo Limited, are secured by a debenture including a fixed charge over the
present leasehold property, a first fixed charge over book and other debts and
a first floating charge over all assets of those companies.
Foreign exchange risk
The Group operates in a number of markets across the world and is exposed to
foreign exchange risk arising from various currency exposure in respect of
cash and cash equivalents, trade receivables and trade payables, in particular
with respect to the US dollar and Euro.
Foreign exchange risk arises when individual Group entities enter into
transactions denominated in a currency other than their functional currency.
The Group's policy is, where possible, to allow group entities to settle
liabilities denominated in their functional currency with the cash generated
from their own operations in that currency. Where group entities have
liabilities denominated in a currency other than their functional currency
(and have insufficient reserves of that currency to settle them), cash already
denominated in that currency will, where possible, be transferred from
elsewhere within the Group.
As of 31 December the Group's net exposure to foreign exchange risk was as
follows:
Currency Liabilities Assets
2025 2024 2025 2024
USD $809,085 $7,487,643 $5,366,833 $7,284,506
EUR €62,126 €13,289 €1,690,215 €2,252,459
HKD HKD 22,952 HKD 22,952 HKD 295,831 -
RMB ¥4,248 ¥52,942 ¥166,472 ¥418,453
Included within the assets and liabilities of the Group are balances in
currencies other than GBP £. If these currencies were to strengthen by 5%
against GBP£, this would give rise to a gain of £255,146 (2024: £86,312)
Foreign exchange risk
2025 2024
£'000 £'000
Derivatives carried at fair value:
Forward foreign currency contracts (129) 1,340
25. Financial instruments (continued)
Derivatives: Foreign currency forward contracts
The Group enters into forward foreign exchange contracts to manage the risk
associated with anticipated sale and purchase transactions which are
denominated in foreign currencies. Derivatives are recognised initially at
their fair value at the date the derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The
resulting gain or loss is recognised immediately in the profit or loss unless
the derivative is designed and effective as a hedging instrument, in which
event the timing and recognition in the profit or loss depends on the nature
of the hedging relationship. Derivative financial instruments are measured at
fair value as level 2 instruments. Level 2 assets and liabilities are valued
using externally sourced information provided by the counterparties, Santander
and NatWest.
As at 31 December 2025, the group has in total 74 (2024: 66) forward foreign
exchange contracts outstanding, made up of regular forward foreign exchange
contracts.
Regular forward foreign exchange contracts:
At 31 December 2025, there were74(2024: 66) regular forward foreign exchange
contracts, to buy US dollars and sell Euros, for an agreed amount of foreign
currency on a specific future date. The purchase or sale is made at a
predetermined exchange rate. The outcome is certain and will deliver a known
fixed amount. The following table details the regular forward foreign exchange
contracts outstanding as at the balance sheet date.
a) Contracted exchange rate 2025 2024 2025 2024
£/ $ £/€
3 months or less 1.3372 1.2851 n/a n/a
3 to 6 months 1.3402 1.2855 n/a 1.1635
6 to 12 months 1.3425 1.2752 1.1414 1.1613
12 months or more 1.3667 n/a n/a n/a
b) Contract value 2025 2024 2025 2024
£/$ £/€
£'000 £'000 £'000 £'000
3 months or less 11,573 27,403 - -
3 to 6 months 18,709 13,882 - 1,289
6 to 12 months 27,561 3,530 657 728
12 months or more 2,195 - - -
60,038 44,815 657 2,017
c) Foreign currency 2025 2024 2025 2024
$'000 $'000 €'000 €'000
3 months or less 15,476 35,242 - -
3 to 6 months 25,074 17,830 - 1,500
6 to 12 months 37,000 4,500 750 845
12 months or more 3,000 - - -
80,550 57,572 750 2,345
25. Financial instruments (continued)
Fair value of financial assets and liabilities
Financial instruments are measured in accordance with the accounting policy
set out in Note 1. All financial instruments carrying value approximates its
fair value with the exception of foreign currency forward contracts s which
are considered Level 2. The Directors consider that there is no significant
difference between the book value and fair value of the Group's financial
assets and liabilities and is considered to be immaterial.
26. Controlling party
In the opinion of the directors there is no ultimate controlling party.
27. Earnings per share
Basic earnings per share are calculated by dividing profit or loss
attributable to ordinary equity holders by the weighted average number of
ordinary shares in issue during the period.
2025 2024
Basic earnings per share (pence) 17.77 23.47
Diluted earnings per share (pence) 17.73 23.34
The calculation of basic and diluted earnings per share is based on the
following data:
2025 2024
Earnings £'000 £'000
Earnings for the purpose of basic and diluted earnings per share, being the 14,352 18,233
net profit
Number of shares 2025 2024
Weighted number of ordinary shares for the purpose of basic earnings per 80,774,765 77,691,505
share
Potentially dilutive shares awarded 176,758 433,257
Weighted number of ordinary shares for the purpose of diluted earnings per 80,951,523 78,124,762
share
In the current year, 985,342 (2024: 1,779,843) share options in issue have
been included in the computation of diluted earnings per share, as per IAS 33,
as they are all likely to be exercised given that the average market price is
higher than the exercise price.
28. Notes supporting statement of cash flows
Changes in liabilities arising from financing activities are shown in the
table below.
Non-current loans and borrowings Current loans and borrowings
Total
£'000 £'000 £'000
At 1 January 2024 4,190 1,259 5,449
Non-cash flows 66 - 66
Cash flows - (1,270) (1,270)
Reclassification from Non-current loans and borrowings to current loans and (1,337) 1,337 -
borrowings
Loans received - 14,000 14,000
Loans repaid - (14,000) (14,000)
At 31 December 2024 2,919 1,326 4,245
Non-cash flows 6,964 6,964
Cash flows (1,393) (1,393)
Reclassification from Non-current loans and borrowings to current loans and (1,342) 1,342 -
borrowings
At 31 December 2025 8,541 1,275 9,816
The above relates to payments in respect of the groups right of use assets.
The group does not have any loans and borrowings.
29. Post balance sheet events
On 9th February 2026 the Group acquired the Barry M brand, including its
intellectual property, stock and order book, but excluding the manufacturing
capabilities and any liabilities, out of administration, for a cash
consideration of £1.4 million.
30. Commitments and contingencies
The Company has provided guarantees in respect of certain subsidiary
undertakings to enable them to claim exemption from statutory audit under
section 479A of the Companies Act 2006.
The following companies are exempt from the requirements relating to the audit
of individual accounts for the year ended 31 December 2025 or for the 18 month
period to 31 December 2025, by virtue of a guarantee provided by Warpaint
London Plc under section 479A of the Companies Act 2026:
Subsidiary name Company Number
Warpaint Cosmetics Group Limited 08994198
Treasured Scents (2014) Limited 08967110
Treasured Scents Limited 03287650
Retra Holdings Limited 05783393
Beaute Sales EU Limited 14622684
Brand Architekts Group Limited* 01975376
The Brand Architekts Limited * 06315241
MR. Haircare Limited * 09495035
InnovaDerma Limited * 09226823
InnovaDerma UK Limited * 09028508
SkinnyTan UK Limited * 09363606
*Accounts for the 18 months ended 31 December 2025
Assets pledged as security
Certain subsidiaries within the Group have granted fixed and floating charges
over their assets in favour of third parties.
Fixed and floating charges are held over all the property and undertakings of
the certain subsidiaries, most of which are those subsidiaries acquired in
Brand Architeks, and are currently in the process of being removed.
There is also a legal assignment of contract monies held in respect on one of
the subsidiaries, The Brand Architekts Limited. This being a legacy factor
arrangement that has expired and has not been used for several years. The
Brand Architekts Limited are in the process of having this assignment removed.
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 FR AKFBBCBKDOQB
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Warpaint London
See all newsREG - Warpaint London PLC - Results for the year ended 31 December 2025
AnnouncementREG - Warpaint London PLC - Notice of Results
AnnouncementREG - Warpaint London PLC - Block Listing Return
AnnouncementREG - Warpaint London PLC Schroders PLC - Holding(s) in Company
AnnouncementREG - Warpaint London PLC - Rule 19.6(c) confirmation re Brand Architekts
Announcement