Warpaint London (W7L)

Warpaint London W7L Logo

Sells color cosmetics in the UK and overseas, principally under the W7 brand.

7-Feb-2018 – 209.85p – £161.1m – PER 16.8

Trading Update For The 12 Months To End December 2017 – In-line, Retra (recent acquisition) performing well – “we look forward to the future with confidence”.

Still like this and it’s still on my Watchlist at 200p.

12-Jun-2018 – 214p – £164.2m – PER 14.3

AGM Statement – In-line, rest of the year encouraging.

It’s tempting this one. Touched my Watchlist Entry (flagged at 200p) last month but I failed to react – Kept it on the Watchlist though and will do so for now.

Subsequent Note: Bought in here on the 6th July. On a PER of 15, the EPS Growth of +55.8% (2018E) and +20.7% (2019E) together with ROCE of 16% and Operating Margin of 21% tipped the scales. Can also add in the fact there’s no Debt, there’s a small but well covered Dividend and recent Broker upgrades.

17-Sep-2018 – 237.5p – £182.3m – PER 15.1

Interim Results For The 6 Months To End June 2018 – Revenue up 38.7% to £18.4m, Adjusted Profit £2.8m in the half year (before exceptional Items, depreciation and amortisation costs) (H1 2017 £3.1 million), Net Cash stands at £4.6m at 30 June 2018 (30 June 2017: £2.5 million). The Interim Dividend is up 7% to 1.5p. Expecting to be two thirds H2 weighted here – FY earnings expected to be in-line.

I am still long here and on a PER of 15 if the EPS Growth of +55.8% (2018E) and +20.7% (2019E) are achieved then all should be OK – I continue to hold but remain a little wary of the huge H2 weighting.

29-Oct-2018 – 205p – £157.3m – PER 12.6

Trading Update For The 12 Months To End December 2018 – Expects Revenue of £48m – £52m and PBT of £6m – £7.5m (after exceptionals!) – Challenging UK market. This looks like quite a miss as I have £12.4m as a PBT estimate for the year, Revenue £55m.

I am Long here but will be considering an exit here this morning.

Subsequent note: I did sell out here and it’s very annoying to have 50% knocked off the value after an in-line 6 weeks previous (be cautious of H2 weightings, especially when there’s a lot to make up FY from a poor H1).

29-Jan-2019 – 85.4p – £65.5m – PER 7

Trading Update For The 12 Months To End December 2018 – Expects to report Revenue of £48.5m and Adjusted PBT of £8.25m.

I took a hit here on the Profit warning last year, I will keep an eye out for Broker notes but am very wary of trusting this company. The last Profit warning (which knocked 50% off the price) came 6 weeks after an in-line update.

10-Apr-2019 – 98p – £75m – PER 8

Results For The 12 Months To End December 2018 – Revenue (looks in-line) up 49.2%, Profits and EPS down (my notes show expectations were for increases here).

Again they increase Revenue but fail to increase Profits, I am still not interested in buying back in here (after taking a Profit Warning hit last year).

6-Aug-2019 – 78p – £60m – PER 7

Trading Update For The 12 Months To End December 2019 – FY Revenue to be circa £50m with PBT to be in the £6m – £7m range.

This looks like a 5% miss on Revenue and a 20%+ miss on PBT. This company always appears cheap for a reason, it is notorious for disappointing – I was so close recently to giving it the benefit of the doubt but I did not, perhaps we all need a bit of gut instinct sometimes!

18-Sep-2019 – 51p – £39m – PER 5

Interim Results For The 6 Months To End June 2019 – Revenue up 2.9%, made a loss, the Interim Dividend is maintained. FY outlook unchanged.

Disappointment again and further validates why it’s always cheap.

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