Warpaint profits fall despite record revenue
By Josh White
Date: Wednesday 29 Apr 2026
(Sharecast News) - Warpaint London reported record revenue for 2025 and an improved gross margin on Wednesday, but profit fell as the cosmetics supplier faced challenging trading conditions across many of its markets.
The AIM-listed owner of W7, Technic, Skin & Tan, Super Facialist, Dirty Works, Fish Soho and Barry M said revenue rose 3% to £105.1m in the year ended 31 December, from £101.6m in 2024.
That figure included an £11.8m contribution from Brand Architekts, which was acquired in February 2025.
Adjusted EBITDA fell 15% to £21.3m from £25.0m, while profit before tax declined 24% to £18.1m from £23.8m.
Profit attributable to equity holders dropped 21% to £14.4m, and adjusted earnings per share fell 25% to 16.7p.
Gross profit margin improved by 140 basis points to 42.6%, which Warpaint said reflected successful launches of new product lines, a modest price increase in the first half, sourcing improvements and volume savings.
The group ended the year with cash and cash equivalents of £16.0m and no debt, compared with £7.9m a year earlier, excluding £14.0m held in escrow at the end of 2024 for the Brand Architekts acquisition.
It recommended a final dividend of 9.0p per share, up from 7.5p, taking the total dividend for the year to 13.0p from 11.0p.
Revenue in the UK rose 11% to £38.9m, while sales in the rest of the world more than doubled to £6.5m.
European revenue fell 3% to £52.9m and US revenue declined 21% to £6.9m, or 18% in dollar terms.
Warpaint said it had completed the integration of Brand Architekts, which made a positive adjusted EBITDA contribution compared with losses before acquisition.
Further improvements to the Brand Architekts portfolio are being implemented in 2026 and are expected to increase margin, particularly in the second half and into 2027.
The group expanded W7 into 200 Tigota stores in Italy, with a capsule collection going into a further 400 stores, and widened its assortment across all 546 Etos stores in the Netherlands.
In the UK, it expanded into 140 additional Superdrug stores, rolled out gifting into 350 Boots stores for Christmas 2025 and added an Impulse offer in a further 150 Tesco stores.
In the US, it expanded the W7 range and rolled out to a further 399 CVS stores.
Direct online sales increased 38% to £11.6m, accounting for 11.0% of group revenue, compared with £8.4m and 8.3% in 2024.
Chairman Clive Garston said the 2025 results were "disappointing", but described the year as one of "resilience and strategic progress".
"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," he said.
"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."
Warpaint said difficult trading conditions continued into the first quarter of 2026, with unaudited group sales for the four months to 30 April expected to be about £26.1m, down from £32.6m a year earlier.
However, April sales were expected to exceed those achieved in April 2025, with signs of recovery emerging.
The company said sales in 2026 were expected to be more second-half weighted than in prior years, reflecting the timing of larger orders and planned customer rollouts from May.
Cash balances stood at £17.3m at 31 March, with no debt.
After the year end, Warpaint acquired the Barry M brand, including intellectual property, stock and order book but excluding manufacturing capabilities and liabilities, for £1.4m in cash out of administration.
The company said Barry M was a well-established value cosmetics brand operating in a similar market segment to its existing cosmetics brands.
Warpaint also said it had received a significantly improved Christmas order from Walmart, now that US tariff levels had settled compared with 2025.
In Europe, expansion this year is expected to include a pilot launch of a capsule W7 range into all 2,200 Dirk Rossmann stores in Germany from May.
The group said it was also expanding in new markets in South America, while an Indian subsidiary was due to begin trading in the second quarter.
"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," Garston said.
"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."
At 1105 BST, shares in Warpaint London were down 6.67% at 175p.
Reporting by Josh White for Sharecast.com.
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