Warpaint London plc (LSE:W7L) reported record revenue of £105.1 million for 2025, representing a 3% increase year on year, supported by the acquisition and integration of Brand Architekts. However, profitability declined during the period, with adjusted EBITDA down 15% and profit before tax falling 24%, reflecting more challenging trading conditions, particularly in the U.S. and European markets.
Despite the softer earnings, the company improved its gross margins and significantly strengthened its balance sheet, doubling cash reserves to £16 million while remaining debt-free. It also increased its total dividend to 13p per share, underlining confidence in its financial position.
Operationally, Warpaint continued to expand its footprint across Europe, the UK, the U.S., and other international markets. Direct-to-consumer online sales grew 38%, now accounting for 11% of total revenue. The group also acquired the Barry M brand out of administration, enhancing its offering in the value cosmetics segment. While management acknowledged ongoing macroeconomic pressures and a slower start to 2026, it highlighted a stronger order pipeline, new retail partnerships such as Rossmann in Germany, and seasonal demand from Walmart. The company expects a recovery weighted toward the second half of the year, supported by further margin improvements and international growth.
Overall, Warpaint’s outlook reflects strong underlying financial characteristics, including steady growth, solid profitability, and a healthy balance sheet with consistent cash generation. Valuation appears attractive, with a relatively low price-to-earnings ratio and a high dividend yield. However, technical indicators suggest some caution, as momentum appears stretched and the stock continues to trade below its long-term moving average.
More about Warpaint London
Warpaint London plc is a UK-based supplier of affordable colour cosmetics and personal care products. Its portfolio includes brands such as W7, Technic, Skin & Tan, Super Facialist, Dirty Works, Fish Soho, and Barry M. The company distributes its products through major retailers, supermarket chains, and international partners, alongside a rapidly growing direct-to-consumer online platform.
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