Eve Sleep plc – Eve Sleep plc: Interim Results

Eve Sleep plc – Eve Sleep plc: Interim Results

eve Sleep plc (EVE), the direct to consumer European sleep brand, today announces its interim results for the six months ended 30 June 2018.

Financial highlights

£m1 H1-18 H1-17 Movement
Revenue 18.8 11.5 +63%
Gross profit 10.2 7.0 +47%
Gross profit margin 54.4% 60.4% (600bps)
Adjusted EBITDA loss2 (11.9) (6.9) (5.0)
Statutory loss before tax (12.0) (9.1) (2.9)
Net cash 16.7 37.2 (20.5)

Business highlights

  • Group sales up 63% year-on-year (200bps higher than guided in the trading update on 2 July 2018)
  • UK and Ireland (“UK&I”) sales broadly in line with initial expectations at 64% growth year-on-year
  • Group gross margin remains strong at 54%, with reduction due to growth of non-mattress products
  • Marketing efficiency in UK&I continues to improve alongside investment in brand building
  • Launch of 24 store retail partnership in France from June with leading homewares retailer BUT
  • New mattress range (the “hybrid” / the “light”) launched across UK and France
  • Maintained rating of “excellent” from Trustpilot, scoring 9.5 from over 2,400 customer reviews

Post period end  

  • Operations refocused on the core markets of UK&I and France to capitalise on eve’s leading online (bed in a box) position in these markets; activity in all other markets currently withdrawn
  • Cost savings plan initiated with savings targeted across marketing and overheads as a result of the refocus on core territories
  • Anticipated restructuring costs of approximately £0.8m for the year
  • Appointment of James Sturrock, ex Moonpig MD, as CEO from 10 September 2018
  • Dreams partnership launched in July 2018 across 193 stores and currently trading ahead of original expectations
  • Unprompted UK brand awareness increased from 7.6% at June 2018 to 11.2% at August
  • eve is now the 5th most well-known mattress brand in the UK
  • Trading in core markets in the first two months of H2 2018 increased year-on-year by c.40%

Commenting on the results Paul Pindar, Chairman said:

“While there is much to be proud of in our first half results, with sales growth of 63%, our group results fell short of our own high expectations. We have however taken swift and decisive action, including re-focusing on fewer core markets where we have a leading position and significant growth potential, which has enabled us to reduce costs substantially.

As you would expect from a new CEO, James is conducting his own strategic and financial review of the business and I have no doubt given his experience and capabilities, more improvements will be forthcoming. The market opportunity remains undiminished and eve, as the most well-knowndirect to consumer sleep brand, continues to win market share.”

The Company will be holding an analyst meeting at 9:00am today. For further details please contact Guy Scarborough at Instinctif Partners Guy.Scarborough@instinctif.com.

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