Warpaint London launches share buybacks

Affordable cosmetics specialist Warpaint London has launched an initial share buyback programme up to a maximum aggregate consideration of £2.5 million. The programme starts immediately and will end no later than 31 December.

Ordinary Shares acquired under the programme “will be held in treasury and are expected to be used to satisfy future obligations from Warpaint’s employee share schemes, thus reducing future dilution for shareholders”.

The board said it believes the programme “represents an effective use of the group’s cash balances, which stood at £20.6 million in total as at 30 June and provides an opportunity to deliver value for shareholders, in line with Warpaint’s approach to capital allocation”.

Listed companies frequently launch share buyback schemes and have a number of reasons for doing so. Sometimes when a company wants to raise money, a buyback can support the share price (as there are fewer shares to divide between the owners) and the price rises. That means firms can issue new shares and raise more cash. A stable share price also means debt can be financed on easier terms. Plus buybacks can be used to help fend off hostile takeovers.

Buybacks linked to obligations regarding employee share schemes are also common, as is the case here. Importantly though, companies mainly tend to launch them only when they feel the price is unnecessarily low and therefore they represent good use of spare cash. Warpaint’ share price is actually down more than 50% in the past year so its price is clearly cheap, although it did rise about 4% on Monday after the new plan was announced.

Last month, the company had announced that trading conditions remain tough, but Q2 so far had been better than Q1 and “more encouraging, with sales from 1 April to 31 May 2026 ahead of the same period last year”.