Warpaint London – the expected poor results see shares fall 7% to 175p, but the SQC 240p Target Price persists

Mark Watson-Mitchell – 29.04.2026

Did you know that women use colour cosmetics daily or a few times a week.

Some 79% of women in the UK think that the price of a product is an important selection criterion, while in the States that figure is just 68%.

In the UK, 67% think that affordable brands perform as well as prestige brands, in the States that figure is 74%.

The Colour Cosmetics Market is massive – worth £18.0bn in the USA, and some £1.8bn in the UK.

Warpaint London (LON:W7L), which is a specialist supplier of high-quality colour cosmetics and personal care brands at an affordable price, is also the owner of the W7, Technic, Skin & Tan, Super Facialist, Dirty Works, Fish Soho and Barry M brands.

Its brands are sold primarily to major retailers, retail chains and supermarkets, with a growing direct online business.

This morning the group announced its 2025 results, which, as detailed yesterday, reflected challenging trading conditions.

The 2025 Final Results

For the year to end-December 2025, the group reported a 3% increase in revenue to £105.1m, alongside an improvement in gross profit margin to 42.6%.

However, adjusted EBITDA decreased by 15% to £21.3m, and profit before tax fell 24% to £18.1m, impacting adjusted earnings per share by 25% to 16.7p.

The company ended the year with a significantly strengthened cash position of £16.0m, up 102% from the previous year, and maintained a debt-free balance sheet.

The group also recommended an increased final dividend of 9.0p per share, bringing the total for the year to 13.0p per share.

Management Comment

Chairman Clive Garston stated that:

"Whilst the 2025 results were disappointing, it was a year of resilience and strategic progress for Warpaint.

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.

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.

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.

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."

Broker Views

Analysts Darren Shirley and Clive Black, at the group’s brokers Shore Capital Markets, lowered their estimates on the back of this morning’s results.

They noted that whilst sales headwinds were unrelenting, Warpaint continued to make strong progress in its distribution. In the UK, 140 new Superdrug stores were added in the year, whilst Gifting was rolled into 350 Boots stores, with accessories expanded into a further 250 stores, and adding that 150 new Tesco stores also listed the W7 impulse offering. 

The estimates for 2026 are now for sales of £108.0m (£105.1m), with adjusted pre-tax profits of £20.5m (£18.0m), earnings of 20.00p (17.7p) but paying an unchanged dividend of 13.0p per share.

For 2027, they see £113.3m sales, £22.1m profit, 21.1p per share of earnings and a 13.0p dividend.

“Whilst we are disappointed to be chronicling such developments, Warpaint is a fine, entrepreneurial firm that has positively evolved, curating the W7 brand whilst building a wider portfolio of proprietary brand value.

Management has also enhanced the Group’s infrastructure and brand capabilities, whilst sustaining a cash-rich balance sheet that feeds highly attractive income credentials.

Rachel Reeves’ taxes, US tariffs, a war in the Middle East, and a key client going bust are not the doing of Warpaint, but they must face into them; they do so with gusto and an entrepreneurial zeal that we respect and like.”

My View

After speaking with the Warpaint bosses this morning, I take the view that the £141m-capitalised group will make improvements in its financial performance within the next year, despite still tricky trading times.

Its widening range of products and its further penetration into other global markets could well help to boost both sales and profitability.

The cash-rich group’s shares, which were hit for six on the results, falling to 165p at the lowest, are now at 175p and look appealing for the medium-term view.

Trading on just 9.9 times historic earnings and 8.7 times current year earnings, the shares are certainly not expensive at this level.

2026 - a year of recovery?

(Profile 17.06.2025 @ 411p set a Target Price of 555p)

(Profile 28.04.26 @ 196p set a Target Price of 240p)