Warpaint London PLC Covid-19 Update and Notice of Results (2810J)
09 Abril 2020 - 1:00AM
UK Regulatory
TIDMW7L
RNS Number : 2810J
Warpaint London PLC
09 April 2020
9 April 2020
Warpaint London PLC
("Warpaint", the "Company" or the "Group")
Covid-19 Update and Notice of Results
Warpaint London plc (AIM: W7L), the specialist supplier of
colour cosmetics and owner of the W7 and Technic brands , provides
a further update on the impact of Covid-19 on the Group.
Current Trading and Covid-19 Mitigating Actions
Prior to the Covid-19 lockdowns, the Group's current year
trading to the end of February 2020 was at the upper end of the
board's expectations. However, since the Company's last trading
update announced on 19 March 2020, there has, as anticipated, been
a substantial reduction in Group sales as a result of the lockdowns
causing the closure of many of the Group's customer's retail
outlets in the UK and its other markets. As a result, most
customers are currently reducing, deferring or cancelling orders of
all year round cosmetics. The Company continues to sell online and
through those retail outlets stocking the Group's products that
remain open.
In order to mitigate the impact of this, as far as possible, the
Group has undertaken a number of significant cost cutting measures
which include reducing non-essential spend, furloughing 84 of the
Group's 115 UK staff whilst maintaining their salaries and
participating in the UK Government's Coronavirus Job Retention
Scheme, landlords agreeing to defer rental payments, and the
suspension of all marketing, travel and other discretionary
expenditure. Staff who have not been furloughed are primarily
working on the Group's 2020 Christmas order book, which continues
to build.
Outlook and Dividend
Given the ongoing uncertainty regarding the duration of the
Covid-19 outbreak, the board is unable to provide guidance as to
the financial outcome for the year ending 31 December 2020. Whilst
it anticipates a significant fall in revenue in the current
financial year, the board believes that, even if the current
lockdown measures were to remain in place until the end of the
year, the Group has the financial strength to withstand a
disruption to its activities until at least the end of 2020 without
the need to seek any additional funding. At 8 April 2020, the
Company had cash of GBP3.3 million and hire purchase and term debt
of approximately GBP500,000.
As announced on 6 February 2020, subject to audit, the Company
expects to report revenue of GBP49.3 million and adjusted profit
before tax (excluding amortisation in connection with acquisitions,
share incentive scheme costs and exceptional items, which the board
expects to total approximately GBP2.8 million) of GBP5.2 million
for the year ended 31 December 2019. T he board, under ordinary
circumstances, would have sought to maintain its progressive
dividend policy, but, in the interests of prudence given the
considerable on-going uncertainty, and in order to further preserve
the Company's cash resources, the board has resolved to not
recommend a final dividend for the year ended 31 December 2019.
With the cost cutting measures undertaken and the Group's
current financial resources, the directors believe that the Group
is well placed to weather the Covid-19 crisis and is well
positioned to take advantage of any improvement in market
conditions.
Notice of Results
The Company will provide a further update at the time of
announcing its results for the year ended 31 December 2019 which is
now expected to be on 13 May 2020.
Commenting, Sam Bazini, Chief Executive of Warpaint, said:
"The wellbeing and health of our employees is of paramount
importance and we are doing everything possible to support them and
to ensure that they are well protected in these difficult
times.
"The current situation is challenging, but I am confident that
Warpaint with its differentiated product offering, strong balance
sheet and ability to react quickly to changes in circumstances is
well positioned to withstand the Covid-19 pandemic."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Enquiries:
Warpaint London c/o IFC
Sam Bazini - Chief Executive Officer
Eoin Macleod - Managing Director
Neil Rodol - Chief Financial Officer
Shore Capital (Nominated Adviser and Joint
Broker)
Antonio Bossi - Corporate Advisory
Daniel Bush - Corporate Advisory
Fiona Conroy - Corporate Broking 020 7408 4090
N+1 Singer (Joint Broker)
Shaun Dobson - Corporate Finance
Alex Bond - Corporate Finance 020 7496 3000
IFC Advisory (Financial PR & IR)
Tim Metcalfe
Graham Herring
Florence Chandler 020 3934 6630
Warpaint London plc
Warpaint London plc is made up of two divisions.
The largest division sells cosmetics under the lead brand names
of W7 and Technic. W7 is sold in the UK primarily to discount
retailers and internationally to local distributors or retail
chains. The Technic brand is sold in the UK and the rest of Europe
with a significant focus on the gifting market, principally for
high street retailers and supermarkets. In addition, this division
supplies white label cosmetics produced for several major high
street retailers. The Group also sells cosmetics using the smaller
brand names of Man'stuff, Body Collection, Vintage, Outdoor Girl,
Very Vegan, Chit Chat, Smooch, Copy Cat and Taxi.
The second division trades in close-out and excess stock of
other branded cosmetics and fragrances from around the world.
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END
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