Shares in natural beauty company BWX Ltd (ASX: BWX) are trading firmly higher following the release of its maiden profit result as a public company.

For those investors who are unfamiliar with the company, it develops, manufactures, distributes and markets branded skin and hair care products with a focus on the natural beauty segment. BWX also develops and manufactures beauty and personal care products for third party customers.

The company listed in November 2015 and has delivered better-than-expected first-half results with the main highlights including:

  • Revenue of $27.6 million – an increase of 25.5% on the prior corresponding period (pcp)
  • Gross Margins of 59.1% – an increase of 4.1% on the pcp
  • EBITDA of $9.8 million – an increase of 53.1% on the pcp
  • Net profit after tax (NPAT) of $6.3 million – an increase of 61.5% on the pcp
  • Basic earnings per share (EPS) of 8.01 cents per share
  • Net cash position of $3.9 million at 31 December 2015
  • Positive operating cash flows of $7.3 million

According to the company, more than 50% of the revenue growth was generated from its core Sukin branded products as it expanded the number of domestic outlets stocking the brand. Sukin is now Australia’s number one selling ‘natural’ skin care brand in pharmacies and sales grew at more than 36% in the first half.

Although operating expenses increased by 14% during the first half, this was more than offset by the 25.5% increase in sales and 4.1% improvement in gross margins resulting from scale benefits.

Like other retail healthcare brands such as Blackmores Limited (ASX: BKL) and Bellamy’s Australia Ltd (ASX: BAL), BWX is also shifting some of its focus to export markets to take advantage of the demand coming out of the Asia region. Investors should note however, this process is still in the early phase with export sales expected to contribute only 12% of total revenue in FY16.

BWX is forecasting full year revenue of $53.6 million and NPAT of $12.4 million that would deliver sales growth of 18.8% and earnings growth of 29.2% over the previous period. The company is also expected to declare a maiden dividend when it releases its full year results with the dividend payout ratio expected to be between 35% to 50% of earnings.

Foolish takeaway

BWX operates in an attractive segment of the beauty industry with the potential for strong growth both domestically and internationally and the company clearly has a unique product offering that connects well with consumers.

Investors also appear excited by the potential expansion into export markets with the share price increasing by more than 80% since listing just over three months ago. At the current share price however, the shares appear fully valued and are now trading at 30x forecast FY16 earnings.

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Motley Fool contributor Christopher Georges has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.