Lotus Bakeries is one of Europe’s great branded-consumer compounding stories.
At the end of 2000, Lotus had a market value of about €42m and a year-end share price of €56. By the end of 2025, its market value had reached about €6.4bn, roughly 150x before dividends. Over the same period, Lotus also raised its dividend for 25 consecutive years.
I wanted to understand whether the ingredients behind Lotus’ subsequent success were actually visible in the early 2000s. At first glance, spotting Lotus early was not obvious. It looked like a small Belgian bakery group with modest growth. But the annual reports did show some useful early markers.
In 2002, Lotus had revenue of about €148m, REBIT of only €4m, a REBIT margin of 2.7%, and net financial debt of €41m. By 2005, revenue was still only €152m, basically flat, but REBIT had increased to €15m, REBIT margin had expanded to 9.9%, and net financial debt had fallen from €41m to €9m.
At this stage, the key signal was not explosive sales growth. It was structural margin improvement, balance-sheet repair, and evidence that the business was becoming higher quality.
Then came the 2006/2007 confirmation phase. Lotus acquired Peijnenburg, a Dutch market leader in gingerbread, which brought a strong local brand, a larger position in the Netherlands, additional scale, and another specialty product platform alongside Lotus’ caramelised biscuits. Revenue increased to €179m in 2006 and €225m in 2007, while REBIT margin expanded further to 11.1% and then 12.8%. By 2008–2010, Lotus was sustaining around 13% REBIT margins and 18% REBITDA margins, materially better than the early 2000s, but now on a much larger revenue base.
This is when the market began to reclassify Lotus from a small Belgian bakery group into a branded snacking compounder. Family-controlled ownership, stronger margins, disciplined acquisitions, clearer brand architecture, international expansion, strong cash generation, and product/category extensions such as Biscoff spread.
To me, Warpaint may be at a similar “pre-confirmation” stage today.
Warpaint is a UK-listed affordable beauty company behind brands including W7, Technic, Body Collection, Man’stuff, Brand Architekts, and now Barry M. Its products sit in a very different category from Lotus, but the investment question is similar: can a founder-led, underappreciated branded consumer business turn distribution expansion, margin improvement, and disciplined acquisitions into a much larger platform over time?
The surface story is still a bit messy. In 2025, Warpaint revenue rose only 3.4% to £105m, while adjusted EBITDA fell to £21m and adjusted EPS fell to 16.7p. Tariffs, lost Bodycare revenue, weaker US performance, and cautious retail ordering all created noise.
But it is worth keeping perspective. Warpaint’s five-year revenue growth has actually been much faster than Lotus’ was in its early confirmation period. Lotus revenue increased from about €132m in 2000 to €152m in 2005, a total increase of roughly 15%. Warpaint revenue increased from about £40m in 2020 to £105m in 2025, more than 2.5x over five years.
Underneath the messy 2025, several Lotus-like ingredients are visible.
Warpaint’s gross margin has expanded meaningfully over the last five years: from roughly 31% in 2020 to 42.6% in 2025. Operating profitability also improved materially before the 2025 setback. Adjusted EBITDA rose from roughly £2.7m in 2020 to £25.0m in 2024, before falling to £21.3m in 2025. Adjusted EBITDA margin rose from roughly 7% in 2020 to about 25% in 2024, before declining to roughly 20% in 2025.
The company ended 2025 with around £16m of cash and no bank debt. Free cash flow rose to about £12m, up from roughly £7m in 2024. The founders, Sam Bazini and Eoin Macleod, still own about 40% combined, which echoes the owner-led alignment that mattered in the Lotus story.
Lotus’ 2006/2007 story was partly about proving that its products could travel beyond Belgium: into the Netherlands through Peijnenburg, into France, the UK, North America, and export markets, and across multiple consumption occasions such as coffee biscuits, gingerbread, waffles, and later spread.
Warpaint’s equivalent is retailer-led global distribution. Recent and planned retailer wins include Walmart, CVS, Rossmann, Etos, Tigota, Superdrug, Boots, Tesco, Chemist Warehouse, New Zealand, South America, and India. Rossmann alone is piloting W7 across roughly 2,200 German stores, while Walmart’s 2026 Christmas order has reportedly been described as around 4x the FY2025 order.
Warpaint is also starting to look more like a brand platform, as Lotus did over time. Lotus was not only expanding one product; it used Peijnenburg and later other specialty brands to build a broader branded snacking platform. Warpaint is attempting something similar in affordable beauty: W7 as the lead brand, Technic as a second major cosmetics brand, and now Brand Architekts and Barry M as additional platform assets.
Warpaint has a healthy acquisition track record. It acquired Retra Holdings Limited, the parent company of Technic, Body Collection, and Man’stuff, in 2017 for up to £18.2m. Retra had £17.5m of sales and £2.7m of operating profit in 2016. By 2024, the broader Technic-related revenue base had grown to about £34m. Using Warpaint’s 2024 adjusted EBITDA margin as a rough guide, that could imply around £8m of illustrative EBITDA contribution, suggesting the Retra acquisition has likely been highly value-accretive.
More recently, in 2025, Warpaint acquired Brand Architekts, adding brands such as Super Facialist, Dirty Works, Fish Soho, and Dr. Salts. Importantly, Brand Architekts delivered a positive adjusted EBITDA contribution in its first year under Warpaint ownership, compared with losses prior to acquisition.
Then, in February 2026, Warpaint acquired Barry M, giving the group another well-known UK colour cosmetics brand with heritage and retailer recognition.
Lotus in 2006/2007 had already shown that its model could travel, but the full re-rating still required proof: sustained margins, disciplined acquisitions, brand extensions, and international execution. Warpaint has not proven all of that yet. Affordable cosmetics is more trend-driven than biscuits, and W7 / Technic / Barry M do not yet have the same obvious moat as Biscoff. But the setup is promising. The ingredients of a branded export compounder are starting to appear.
Looking at a stock chart makes it to assume that a 150x folds increase in a given stock was foreseeable, it never is, and by the time it is, its too late. Hence, why I spend much time trying to understand what makes a great stock great early on.