Cosmetics company sees profits drop by 63 per cent

A London cosmetics company reported today that it saw a 63 per cent drop in profit over the past year.

Warpaint London saw pre-tax profit for the year falling to £1.8m, down from £4.7m year-on-year.

However, revenue for the year rose by 1.6 per cent to £49.3m, despite gross profit margins dropping to 33.5 per cent from 35.5 per cent.

Warpaint London said its trading up until March 2020 had been at the upper end of its expectations, but the situation had deteriorated as customers were impacted by the ongoing pandemic.

More than 70 per cent of the company’s staff has been furloughed as a cost saving measure.

Clive Garston, chairman of Warpaint London, commented: “The directors have prepared forecasts for the period to December 2021, which are based on assumptions which the directors believe are conservative, although the unknown impact of COVID-19 could impact them negatively or positively.

“In preparing these forecasts a number of different scenarios were modelled, including a complete lockdown in all our markets to the end of 2020.

“In this unlikely event the directors believe that Warpaint has sufficient financial strength to withstand such disruption for at least the next 12 months.”