Warpaint London (LSE:W7L), the AIM-listed owner of the W7, Technic, Barry M and Super Facialist cosmetics brands, reported group sales of £40.5 million for the six months to 30 June, down 17.8% from £49.3 million in the same period last year.
The company attributed the decline to challenging trading conditions, order timing and non-recurring sales in the prior period, partially offset by a £2.5 million contribution from Barry M, acquired out of administration in February for £1.4 million.
Gross profit margin rose 230 basis points to 47.3%, helped by re-sourced Brand Architekts products and a one-off 150-basis-point boost from selling discounted Barry M inventory. Profit before tax fell to £4.9 million from £7.3 million, while cash from operating activities jumped 80.9% to £7.4 million and cash reserves grew to £20.7 million from £17.0 million a year earlier, with the group remaining debt free.
The board raised the interim dividend by 6.25% to 4.25p per share, from 4.0p.
"With sales to the end of September 2026 expected to be closer to the level achieved last year than was the case at the half year, we remain comfortable with current market expectations for the full year," said chief executive Sam Bazini.
Nine-month sales to 30 September are expected to be approximately £69 million, against £76 million a year earlier, with third-quarter sales of around £28.5 million, around 5% ahead of the £27.1 million recorded in the third quarter of 2025.
The board expects full-year revenue toward the lower end of analyst forecasts of £103.3 million to £112.6 million, with adjusted EBITDA within the current range of £22.4 million to £24.0 million.
News Intelligence what this means for the company
Warpaint London's first-half revenue fell 18% to £40.5 million amid weak consumer spending and order timing, but the company offset the decline with margin expansion (230 basis points to 47.3%), a cash generation jump of 81%, and a 6.25% dividend increase to 4.25p per share. Management expects third-quarter sales to recover 5% year-on-year and guides full-year revenue toward the lower end of analyst forecasts (£103.3–£112.6 million), signaling stabilization rather than deterioration.
The margin recovery and cash generation demonstrate operational resilience despite the top-line contraction, and the dividend raise signals confidence in cash flow sustainability. However, full-year guidance at the lower end of forecasts and the reliance on a one-off 150-basis-point inventory boost to margins suggest underlying demand remains pressured; the investment case hinges on whether H2 recovery materializes as management expects.
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