Warpaint has released a trading update for the year ending 31 December 2018. The company has prudently signalled that group sales for FY2018 are likely to be lower than previously indicated, in the range of £48m-£52m, with adjusted PBT of £8.5m-£10m. The company says that trading conditions in the UK remain challenging but that it has seen strong growth in its overseas markets. The share price responded negatively to this trading announcement, plunging by over 45% to 112.5p on the day, from the 206.5p closing price on 26 October. We have lowered FY18E revenue to £50.0m, from £55.1m, with adjusted PBT of £9.1m, from £12.4m, but we retain a dividend forecast of 5.5p.