Warpaint London (W7L) H1 2024 earnings summary

Executive summary

• Achieved record sales and profit in H1 2024, with revenue up 25% to £45.8m and profit from operations up 75% to £11.0m, driven by expansion into major retailers and strong online growth.

• Gross profit margin rose 334bps to 42.5%, supported by new product launches, sourcing efficiencies, and increased e-commerce and US profitability.

• Maintains a robust, cash-generative, debt-free balance sheet and continues to pay and increase dividends.

• Strong sales growth in both UK (+17%) and international markets (+30%), with Europe now the largest sales area.

• Management expresses confidence in meeting full-year expectations, supported by positive momentum into H2 2024 and nine-month sales expected at £76m, up from £64m year-over-year.

Financial highlights

• Revenue rose 25% year-over-year to £45.8m (H1 2023: £36.7m).

• Gross margin increased by 334bps to 42.5% (H1 2023: 39.1%).

• Profit before tax up 76% year-over-year to £10.9m (H1 2023: £6.2m).

• EBITDA: £12.0m (H1 2024) vs £7.3m (H1 2023), +66%; adjusted EBITDA: £11.4m (H1 2024) vs £7.9m (H1 2023), +44%.

• Basic EPS rose to 10.4p (H1 2023: 6.2p); adjusted EPS 10.6p (H1 2023: 6.5p).

Outlook and guidance

• Revenue for the nine months to 30 September 2024 expected at £76m, up from £64m year-over-year.

• Sales expected to be second-half weighted due to Christmas gifting and ongoing momentum.

• Further launches and increased product distribution planned for H2 2024 in the UK, Europe, and US.

• Management remains confident in meeting full-year expectations, with growth and margin improvement supported by new retail partnerships.