Suggesting that Warpaint London (LON:W7L) is a great success story of British enterprise, analysts Darren Shirley and Clive Black at Shore Capital recently upgraded their current year forecasts by some 26% to look for adjusted pre-tax growth to £23.3m, generating 22.6p of earnings per share.
Warpaint sells branded cosmetics, its W7 brand is sold in the UK primarily to major retailers and internationally to local distributors or retail chains.
While Technic, the group’s other main brand, is sold in the UK and continental Europe with a significant focus on the gifting market, principally for high street retailers and supermarkets.
Looking For Strong Multi-Year Growth
The brokers suggest that Warpaint is in the foothills for growth, such foothills have a considerable distance to traverse, and they believe that strong multi-year growth beckons.
Their estimates for the year to end December 2025 are for £116.5m sales, adjusted pre-tax profits of £26.6m, with earnings of 25.8p and a 12.9p dividend per share.
Buy On Any Dips
In late April I wrote that patient investors in Warpaint should look to buy on any dips in the price, and that by doing so they will be onto a winner.
The shares were then 465p and fell back to 455p after news that the group’s CEO and Managing Director were sellers of 3.5m shares a piece, some 9.06% of the equity, ‘in response to strong investor demand’ and wanting to increase the freefloat of its stock and broadening the shareholder register.
Following the Placing at 450p a share, Samuel Bazini, CEO, and Eoin Macleod, MD, were each left with 15.95m shares, representing 20.64% each of the equity.
Share Price Strength Subsequent To Placing
That Placing was substantially oversubscribed and was strongly supported by existing and many new institutional investors.
The group’s shares have been on a gradual ascent since then, topping out at 550p late last week – showing a near-21% gain since the Placing.
The company is due to announce its H1 Trading Update this week.