Warpaint London plc (LON:W7L), the specialist supplier of colour cosmetics and owner of the W7 and Technic brands, has announced an update on recent trading ahead of release of the Company’s results for the year ended 31 December 2020 on 28 April 2021.
As outlined in the Company’s trading update announced on 18 January 2021, trading in the second half of 2020 was stronger than previously anticipated and the Company is pleased to report that improved trading has continued to be experienced in the first quarter of 2021.
Despite much of the world having some level of lockdown during the first three months of 2021 and the continued enforced temporary closure of a number of the Group’s customers’ retail outlets, the Group is pleased to report that sales for the first three months of 2021 are ahead of the same period in 2020, a period that was only impacted by Covid-19 related lockdowns in its last few weeks. Product gross margin has also improved in the first quarter of 2021 versus the same period in 2020.
Sales of the Group’s W7 branded products through Tesco stores in the UK continue to perform well, with Tesco stocking an additional 15 W7 product lines in over 600 Tesco Extra Stores and Supermarkets from the end of May 2021, and a substantial Christmas order has been placed by Tesco for delivery later in the year.
The Group’s activities in the USA have been successfully refocused and restructured with the aim of increasing margin, reducing costs and building sales. Following a successful trial with store group Five Below, W7 products are now being stocked in over 1,000 of their stores in the USA.
As part of its focused efforts on its e-commerce strategy during 2020 the Group placed an increased emphasis on driving online sales via the Company’s own websites and launched Amazon FBA (Fulfilment by Amazon) in the UK and USA. The positive momentum in e-commerce sales achieved in 2020 has continued to accelerate in 2021 with a further launch onto Amazon EU planned to be implemented in the near future.
The Company’s net cash* balances as at 31 March 2021 totalled £5.2 million (31 March 2020: £3.0 million).
An update on the outlook for the remainder of 2021 will be provided with the release of the results for the year ended 31 December 2020.
* Net cash consists of cash and cash equivalents (31 March 2021: £5.4 million) less a small amount of hire purchase and other debt (31 March 2021: £0.2 million)
Warpaint London’s management will be hosting an online presentation and Q&A session at 5.30 p.m. BST on Wednesday 28 April 2021. This session is open to all existing and prospective shareholders. Those who wish to attend should email firstname.lastname@example.org and they will be provided with access details. Participants will have the opportunity to submit questions during the session, but questions are welcomed in advance and may be submitted to: email@example.com.