Eve Sleep plc (EVE) Eve Sleep plc: Interim Results 23-Sep-2021 /
07:00 GMT/BST Dissemination of a Regulatory Announcement,
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
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eve Sleep plc ("eve" the "Company")
Interim Results
Good H1 led by strong UK&I performance, on-course for full
year expectations
eve Sleep, the direct-to-consumer sleep wellness brand operating
in the UK, Ireland (together the "UK&I") and France, today
issues its results for the six months ended 30 June 2021 (the
"Period").
Financial Highlights1
2021 H1 GBPm 2020 H1 GBPm Movement
Revenue 13.9 12.2 +13%
Gross profit 7.6 6.8 +12%
Gross profit margin 55.0% 55.6% -58bps
Marketing costs as a % of revenue 32.7% 25.3% +737bps
Marketing contribution2 0.7 1.5 -GBP0.8m
Underlying EBITDA Loss3 (1.9) (0.8) -GBP1.0m
Statutory loss before tax (2.3) (1.3) -GBP1.0m
Cashflow from operations (3.1) 1.8 -GBP4.9m
Net cash at period end 5.2 9.2 -GBP4.0m
Business Highlights
-- UK&I revenue increased 19% year-on year and 15% on H1
2019
-- Average order value in the UK grew 31% as mattress purchases
were increasingly accompanied with bedroomfurniture, bedding and
other sleep accessories from the growing range
-- Two-year customer repeat rate4 in the UK increased 160 bps
year-on-year to 14.5%
-- French revenues in H1 decreased 8% year-on-year on minimal Q1
marketing spend ahead of a new marketingcampaign and Covid related
retail partner store closures
-- Gross profit margin gains secured in 2020 largely held
despite inflationary pressures
-- Marketing investment across the business has been first half
weighted
-- Operating cash outflow of GBP3.1m is first half weighted, in
part due to GBP0.9m of one-off factors relatingto increased stock
holding and the payment of VAT deferred from Q1 2020, and GBP0.3m
for other working capitalmovements
Post Period End
-- July saw the successful launch of the 'Sleep Away' sleepover
mattress with strong early sales
-- In September the new premium foam mattress range goes
live
Current Trading and Outlook
-- Strong trading momentum in the UK&I has continued with
revenues ahead of board expectations at +46% forJuly and August
against 2019 pre-Covid equivalents
-- Group revenues in July and August increased 1% year-on-year
against very strong comparatives and grew 26%on 2019 pre-Covid
equivalents
-- Net cash as at 31 August 2021 increased to GBP5.9m, with
minimal H2 outflow expected
-- The UK&I is on-course to report a healthy positive
marketing contribution for the second consecutive fullyear as the
region moves towards profitability in 2022
Cheryl Calverley, CEO of eve Sleep, commented:
"We are starting to reap the benefits of our three year rebuild
strategy. Our UK&I business continues to go from
strength-to-strength, with our re-engineered supply chain able to
meet continued strong demand, with sales up 46% in July and August
on 2019 pre-Covid comparatives. The ongoing expansion of the
product ranges is gaining traction, with new accessory ranges
driving growth in customer numbers, customer repeats and average
spend through the year. This gives us increasing confidence for the
full year outturn for the UK&I, which we expect to generate a
healthy profit pre overheads for the second consecutive year.
Our focus for the next 12-18 months is on delivering a core UK
business that is both growing and sustainably profitable, whilst
building our scale in France to generate a similarly accretive
business there in the medium term. To achieve these growth
objectives we continue to expand our sleep wellness offering with a
strong pipeline of new products for the second half of the year,
alongside the launch of our personalised sleep content engine,
which will serve information to customers on a wide range of sleep
related topics, further creating a differentiated business which
meets a fundamental and growing customer need and derives as a
result improving profitability."
Footnotes
1. Financial data has been rounded for presentation purposes. As
a result of this rounding the totals, comparatives and calculations
presented in this document may vary slightly from the arithmetic
totals or calculations using such data.
2. Marketing contribution is defined as the profit/loss after
marketing expenditure but before overhead costs; a measure also
referred to as operational profitability.
3. Underlying EBITDA is defined as earnings before interest,
taxation, depreciation, amortisation, impairment, share-based
payment charges connected with employee remuneration and
fundraising-related expenditure.
4. Based on the cohort who first ordered in H1 2019 compared to
the cohort who first ordered in H1 2018 and then placed subsequent
orders over the following two years.
For further information, please contact:
eve Sleep plc via M7 Communications LTD
Cheryl Calverley, Chief Executive Officer
Tim Parfitt, Chief Financial Officer
finnCap Limited (NOMAD and Broker) +44(0)20 7220 0500
Matt Goode (Corporate Finance)
Teddy Whiley
Alice Lane (ECM)
M7 Communications LTD +44(0) 7903 089 543
Mark Reed
Summary
Good first half
The UK&I business continues to gain momentum. Looking
through all of the distortions to trading patterns resulting from
the pandemic, revenues for the UK&I in the first half of the
year were up 15% on pre-Covid H1 2019 comparatives. This growth is
despite the decision to exit Amazon sales shortly after the end of
H1 2020 and is testament to the success of the three-year rebuild
strategy, which made structural improvements to the business across
product and customer service, infrastructure and marketing,
alongside a greater focus on profitable sales.
Trading momentum in the first half of 2021 in the UK&I
continued throughout the first half, despite more challenging
comparatives in May and June. Revenue growth for the half of 19%
year-on-year in the UK&I was driven primarily through online
channels, with a softer performance overall from retail partners,
reflecting lock down restrictions over the first quarter and to
some extent the permanence of channel shift to ecommerce. However,
some retail partners bucked the trend with both Argos and Shop
Direct performing strongly. Ireland recorded a strong performance,
generating year-on-year revenue growth in excess of 130%, although
it remains a small part of the overall business.
Demand was strong across the mattress range, with eve's hybrid
mattresses selling particularly well. The underlying strength in
the core products continued to be supported by the 2020 Which?
survey, rating eve's original and its premium hybrid the two best
mattresses in the UK. Five of the six eve mattresses now have a
Which? Best Buy rating and in June 2021 eve's premium hybrid
mattress received the Indy Best Award. Substantial progress has
also been made in the period with range extensions into the wider
bedding and sleep wellness categories, which was one of the three
pillars of the rebuild strategy. Sales of premium bed frames remain
strong and during the period, eve launched the new, entry level
'minimal' bedframe.
An important development in the period was the increase in
ancillary sales of new products, which drove both an increase in
average basket size and the number of customers in the period.
Recently launched new products, including the weighted blanket,
morphee sleep aid, the 'sleep away' sleep over range and the
temperature balancing mattress protector, alongside a redevelopment
of the 'baby sleep' offering, sold well and reflect eve's
increasing focus on the broader sleep wellness category. The
broadening of the product range in the UK has been a key
contributing factor to the 31% year-on-year growth in the average
order value and the improvement in the UK two-year customer repeat
rate KPI, which for the first six months of 2021 stands at 14.5%, a
160 bps year-on-year increase.
eve's business in France is at an earlier stage in its
development than the UK&I, with a lower level of brand
awareness, a more limited range of products on the website and a
less advanced customer experience. While much of eve's French
business has been restructured over the last three years, there is
still a lot of work to do in order to match the depth and breadth
of product ranges and the high quality customer experience achieved
in the UK. Restructuring has so far included manufacturing
consolidation, the move to the more stable Shopify ecommerce
platform and a reduced cost base, combined with defining a more
distinct brand position for this local market. During these initial
stages of restructuring the French business has received minimal
marketing investment.
The majority of the first half of the year in France was spent
preparing for the launch of the new marketing campaign - 'La vie en
jaune', which commenced in May. Ahead of the new campaign,
marketing spend remained minimal and retail partner store closures
resulting from Covid restrictions, both impacted on revenues in the
period, which were marginally lower year-on-year at GBP2.2m (H1
2020: GBP2.4m).
At the Group level, revenues for the period increased 13% to
GBP13.9m (2020 H1: GBP12.2m), reflecting the strength of trading in
the UK&I. The substantial gains made to the gross margin over
the last two years, resulting from the rebuild strategy and the
focus on profitable sales have been largely retained. The gross
margin in H1 2021 was broadly flat at 55.0% compared with H1 2020
but up 270 bps on the 52.3% reported in H1 2019, despite the
existence of inflationary pressures since the second half of 2020,
as previously highlighted. These inflationary pressures have been
offset largely by the strength of the eve brand and a more premium
product offering, allowing higher retail pricing to be passed
through to customers without significant adverse effects on
volumes.
Marketing contribution is an important metric for eve,
representing the profit or loss after marketing costs but before
central overheads, with 2020 being the first year in which this
measure of profitability turned positive. In the first half of 2021
marketing contribution remained positive at GBP0.7m, but reduced
year-on-year by GBP0.8m (2020 H1: GBP1.5m), as a result of the
upfront marketing investment associated with the new French
advertising campaign and the first half weighting of marketing
spend in the UK&I. In total, marketing investment expensed in
the first half increased year-on-year by GBP1.4m, reflecting a
higher GBP0.6m in the UK and GBP0.8m in France. The impact of this
investment flowed through into the higher EBITDA loss of GBP1.9m
reported for the period (2020 H1: GBP0.8m), with the payback on
this investment expected to start to flow through in the second
half of the year and over 2022. Marketing contribution for the
UK&I was broadly flat at GBP1.2m for the period, reflecting the
first half weighting of marketing investment, which is expected to
benefit the second half performance.
The operating cash outflow in the period was GBP3.1m. This
reflects the EBITDA loss of GBP1.9m, GBP0.9m of one-off factors
including the payment of VAT, previously deferred under the UK
Government's Covid support measures, a planned increase in stock,
in order to mitigate against any supply shortages and other working
capital movements of some GBP0.3m.
At the Company's AGM in May 2021 Paul Pindar stepped down as
Chairman of the Company, a position he had held since before the
IPO and Mike Lloyd, COO of McCarthy & Stone and a former
director of AA plc was appointed to the role. The board was also
strengthened with the appointment of Masood Choudhry as a
Non-Executive Director in February. Masood remains at the forefront
of ecommerce, having held senior leadership positions in logistics
at some of Europe's largest operators, and is currently Senior Vice
President of Logistics at Zalando. Collectively these appointments
provide the executive management team with fresh perspectives,
direct access to a wealth of expertise and renewed energy.
Market overview
Sleep is increasingly recognised as an essential element of
wellness at a time when wellness has never been more important.
There is a growing body of research and evidence which testifies to
the importance of sleep and the risks to physical and mental health
of insufficient sleep. In a poll commissioned by eve and taken
shortly after the start of the pandemic, as many as 48% of
respondents said that they were kept up due to worry about Covid-19
and nearly one in four admitted that their quality of sleep was
worse than ever. 'Sleep' has now overtaken both 'diet' and
'exercise' as the most searched for term on google (UK) across the
'wellbeing triad' of 'sleep', 'diet' and 'exercise', showing the
increased awareness that consumers have of this vital component of
wellbeing.
With the increasing understanding of the importance of sleep has
come consumer change. Not only are consumers spending more on sleep
wellness related products, they are also willing to spend more on
the central element of a good night's sleep; the mattress. The
strong sales performance of eve's premium hybrid mattress testifies
to this point, generating some 30% of mattress sales by volume.
Every customer that purchases an eve mattress is asked at 100 days
whether they're sleeping better thanks to their eve, and more than
80% tell us they are. This is a strong piece of advocacy for the
quality and effectiveness of our products.
Sleep is a huge market by value, which has evolved substantially
since the start of the pandemic. Data from Euromonitor estimates
that the European sleep market is worth approximately GBP26bn, with
the Core Markets that eve is focused on (UK&I and France) being
worth approximately GBP6bn. The advent of the first national
lockdown from March 2020 and the consequent switch to working from
home, coupled with a lack of leisure spending alternatives, drove a
strong increase in industry wide demand for bedding and homewares
products. Consumers en masse literally 'bedded down' for lockdown
as they sought to renovate their homes and bedrooms. Data from
Barclays UK Consumer Spending Reports show that retail spending in
the Household category grew each and every month year-on-year
through the second half of 2020 and this positive trend has
continued throughout the first half of 2021.
The growth in spending has been online led, resulting in an
acceleration of the trend to ecommerce. Recent data from the Office
for National Statistics (ONS) shows that whilst the percentage
contribution of non-food retail sales online has fallen back
somewhat in recent months as lockdown restrictions eased and the
high street re-opened, retail's online share remains substantially
ahead of pre-pandemic levels. In June 2021 non-food online sales
represented 23.1% of total non-food retail sales, which compares
with 15.5% in December 2019, according to ONS data, with eve's own
market research indicating that 50% of mattresses are now bought
online in the UK. The management team at eve anticipate that this
shift to online will be sustained.
Whilst the sector remains fragmented and highly competitive the
competitive landscape across beds and mattresses has eased
somewhat, with a number of online mattress providers choosing to
retrench from the UK market, alongside a reduction in store based
competition, both permanent and temporary as a result of the
pandemic. There is also evidence to suggest that the mattress in a
box brands are growing their share of the market with eve's market
data indicating that some 15% of mattresses are now bought from
'direct to consumer' brands in the UK. Despite the level of ongoing
competition in mattresses, there is no company that as yet has
established itself as a wider brand operating in sleep wellness.
eve's ambition is to achieve just this; to be seen as the go to
brand for sleep wellness products, content and support across a
range of categories and sales channels.
The foundations for growth
The focus of the last three years has been on delivering the
rebuild strategy, with the central goal of placing the business on
a more sustainable, long term financial footing. The improvement in
the financial performance is clear to see with underlying EBITDA
losses in 2020 reduced by 81% year- on-year and the cash burn over
the same period cut from GBP10.1m in 2019 to a cash neutral
position in 2020. Further improvements in the financial performance
of the business have been secured in the first half of 2021,
including top line growth and an increase in the gross profit,
though other financial benefits are somewhat clouded by the timing
of marketing investment, which is substantially higher in the first
half of the year, reflecting an H1 weighting, with a lower spend
planned for the second half.
The technology infrastructure, logistics and operations of the
business have also been substantially upgraded and re-engineered
during the rebuild strategy. The move to the Shopify ecommerce
platform has increased stability of what is eve's largest revenue
contributor, avoiding system crashes during peak trading periods,
while also reducing the necessary tech headcount/cost previously
required to maintain the old, proprietary platform.
The segmenting of manufacturing, logistics and distribution on
geographic lines, between the UK&I and France has ensured
minimal impact following Brexit, faster deliveries to customers and
lower warehousing costs. Additionally, the re-engineered supply
chains have demonstrated their increased resilience during the
current period, and combined with the early decision to take on
more stock, have resulted in continued availability of key product
lines, with minimal impact from the widely publicised global supply
chain issues holding back many industries. The improvements to
infrastructure have also enabled the consolidation of orders, so
that all items ordered can now be made in a single customer
delivery. The superior customer experience which all of these
improvements underpin, can be seen in the growth in customer
numbers achieved in the UK&I in the period and the growth in
the customer repeat rate.
With the resilience and the unit economics of the business much
improved over the last three years, the focus is shifting from
restructuring to growth in the more developed UK&I market. To
achieve this eve is focused on extending its range of products that
improve the length and quality of sleep including offering products
which benefit and/or aid the pre-bed wind down routine.
In the first half of the year a large number of new products
launched, which over and above new bedding ranges and a new bed
frame, included the Morphee Sleep Aid, a breathe easy Protector
range, a microfibre shaper pillow and the warm:cool duvet. In the
second half of the year, in addition to a new mattress, and the
sleep away range of sleepover mattresses which launched in July,
eve plans to launch further own label and branded partner products.
The sleep accessories category will be expanded with the launch of
eym candles and a ginko LED night light, as well as a range of
Rescue Remedy's best selling ingestibles and a selection of their
new sleep range which includes a sleep balm and a sleep spray. Also
later in the second half of the year eve plans to launch, under
license, a small range of premium CBD oils.
Key to the success of a broader sleep wellness retail
proposition will be an ever improving data capability. Alongside
building an internal data capability and improved marketing
efficiency, eve is in the final stages of development of a
personalised sleep content engine, which will serve content to
customers on a wide range of sleep related topics, further
supporting their sleep, and reducing eve's cost of customer
acquisition. This marks eve's first steps to a broader digital
offering of sleep content and services to support the products
available on the eve site.
To build a stronger, broader and larger, profitable business it
is necessary to expand beyond the UK market to achieve balanced
growth. The current focus is on the French market, where eve has
traded since 2016. The French market is less developed and at an
earlier stage in its online transition than the UK market. Until
this year the French business had received only minimal marketing
investment as the business was at the early stage of being
restructured and its brand position in the local market more
clearly defined. The new French advertising campaign, which
launched in May 2021 is a significant investment for eve and is
intended to drive both brand awareness and revenue growth in the
business in the second half of the year and through 2022. In tandem
with the advertising campaign there will be a continued focus on
retail partnerships, and product and customer experience
improvements as eve works to scale the business over the next few
years.
The Irish market has received some increased focus and
investment since the fourth quarter of 2020 and this has continued
in the first half of 2021. Though modest in absolute numbers the
strategy has been effective, with the Irish market achieving
revenue growth in excess of 130% in the period. As the strategy
develops and progress is achieved in France and Ireland, the
management team will look at entering a limited number of adjacent
European markets. Expansion will be executed in a controlled and
disciplined way, leveraging existing infrastructure in France and
product assets in order to keep a tight control of costs.
The investment in growth is expected to increase costs in the
current year, resulting in a year-on-year increase in the annual
loss. But the investment is considered necessary to build a more
balanced, larger business, which in the medium term will be
sustainably profitable.
Current Trading and Outlook
Trading in the UK&I in July and August has been above the
Board's expectations, driven by ongoing strength in eve's ecommerce
channel. While the comparatives in the prior year were very strong,
eve's UK&I sales in July and August increased 46% on 2019
pre-Covid equivalents. The new sleep away range has been a standout
performer, and has surpassed all expectations with its early sales,
though demand has also been strong for the rejuvenated bedding
range and the premium 'spindle' bedframe.
Notwithstanding well documented global issues with rising
freight costs and industry supply chains, impacting on
availability, eve's own re-engineered supply chain in 2021 has held
up well. Manufacturing, warehousing and distribution are all
performed locally in the UK and Continental Europe, with most but
not all raw material supply originating from within Europe. This
along with the early decision to hold more stock of popular items
has enabled eve to continue to meet ongoing strong customer
demand.
With a substantial new product pipeline for the remainder of the
year, the board is increasingly confident in the continued strength
of the UK&I business through the remaining four months of 2021
and expects a healthy positive marketing contribution from the
UK&I for the second consecutive year.
France has experienced improved trading in July, helped by the
summer 'soldes' sales period in the month, followed by a softer
August. The French growth plans, of which marketing forms just one
element, are in their very early stages, with product and customer
experience improvements to come in Q4, alongside the next tranche
of marketing investment. The management team remains confident in
the longer term prospects for the French business and the
opportunity to achieve the necessary scale, commensurate with
profitability. For the two months of July and August, Group
revenues increased 1% year-on-year on very strong comparatives and
grew 26% on 2019 pre-Covid equivalents.
The company remains on-course to deliver the Board's previous
full year expectations, with the strength of the UK&I trading
expected to offset any variability in the French market. Marketing
investment which was up GBP1.4m year-on-year in the first half, was
front loaded, and is expected to be broadly flat in H2. The cash
outflow in the first half of the year exceeded the operating
performance by some GBP1.2m reflecting GBP0.9m for the timing of
payments to HMRC and higher stock levels, as well as GBP0.3m for
additional working capital movements. Net cash at the end of August
increased to GBP5.9m, from GBP5.2m at 30 June, with the cash
outflow over the remaining four months of the year expected to be
minimal.
Consolidated Statement of Profit and Loss and Other
Comprehensive Income
6 month period ended 30 6 month period ended 30 12 month period ended 31
June 2021 June 2020 December 2020
Note (Unaudited) (Unaudited) (Audited)
GBPm GBPm GBPm
Revenue 2 13.9 12.2 25.2
Cost of sales 2 (6.3) (5.4) (10.7)
Gross profit 7.6 6.8 14.5
Distribution expenses 2 (1.9) (1.6) (3.5)
Administrative expenses (8.0) (6.4) (13.2)
Share-based payment charges - (0.1) (0.2)
Operating loss (2.3) (1.3) (2.4)
Net finance income - - -
Loss before tax (2.3) (1.3) (2.4)
Taxation - - 0.4
Loss for the period (2.3) (1.3) (2.0)
Other comprehensive income
Foreign currency differences from 0.1 (0.2) -
overseas operations
Total comprehensive loss for the (2.2) (1.5) (2.0)
period
Basic and diluted loss per share 3 (0.83p) (0.48p) (0.75p)
Consolidated Statement of Financial Position
6 month period ended 30 6 month period ended 30 12 month period ended 31
June 2021 June 2020 December 2020
Note (Unaudited) (Unaudited) (Audited)
GBPm GBPm GBPm
Non-current assets
Property, plant and equipment - 0.3 0.3
Intangible assets 0.5 0.4 0.4
0.5 0.7 0.7
Current assets
Inventories 1.2 0.8 0.6
Trade and other receivables 1.6 1.7 1.9
Cash and cash equivalents 5.2 9.2 8.4
Current tax receivable - - 0.4
8.0 11.7 11.3
Total assets 8.5 12.4 12.0
Current liabilities
Trade and other payables 2.7 4.3 4.0
Provisions 1.2 1.0 1.0
Lease liabilities < 12 months - 0.3 0.3
Total liabilities 3.9 5.6 5.3
Net assets 4.6 6.8 6.7
Equity attributable to the equity
holders of the parent
Share capital 0.3 0.3 0.3
Share premium 49.5 49.4 49.4
Share-based payment reserve 0.7 0.4 0.8
Retained earnings (46.1) (43.2) (43.9)
Foreign currency translation reserve 0.2 (0.1) 0.1
Total equity 4.6 6.8 6.7
Consolidated Statement of Changes in Equity
For the 6 months ended 30 June 2021
Share Share Share-based Retained Foreign currency Total
capital premium payment reserve earnings translation reserve equity
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP GBP GBP GBP GBP GBP
Balance at 1 January 2021 272,570 49,421,049 766,749 (43,918,599) 151,852 6,693,621
Exercise of employee share 738 - - - - 738
options
Share-based payment charge - - 43,815 - - 43,815
Transfer on exercise of - - (20,237) 20,237 - -
employee share options
Transfer on issue of equity 778 77,058 (77,836) - - -
for marketing purposes
Total transactions with owners 1,516 77,058 (54,258) 20,237 - 44,553
Loss for the period - - - (2,255,340) - (2,255,340)
Other comprehensive income for - - - - 88,914 88,914
the period
Balance at 30 June 2021 274,086 49,498,107 712,491 (46,153,702) 240,766 4,571,749
For the 6 months ended 30 June 2020
Share Share Share-based Retained Foreign currency Total
capital premium payment reserve earnings translation reserve equity
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
GBP GBP GBP GBP GBP GBP
Balance at 1 January 2020 263,445 48,887,392 998,494 (42,109,328) 116,030 8,156,033
Exercise of employee share 3,734 - - - - 3,734
options
Share-based payment charge - - 138,370 9,843 - 148,213
Transfer on exercise of - - (214,812) 214,812 - -
employee share options
Transfer on issue of equity 5,391 533,657 (539,048) - - -
for marketing purposes
Total transactions with owners 9,125 533,657 (615,490) 224,655 - 151,947
Loss for the period - - - (1,289,019) -
(1,289,019)
Other comprehensive income for - - - - (169,461) (169,461)
the period
Balance at 30 June 2020 272,570 49,421,049 383,004 (43,173,692) (53,431) 6,849,500
For the 12 months ended 31 December 2020
Share Share Share-based Retained Foreign currency Total
capital premium payment reserve earnings translation reserve equity
(Audited) (Audited) (Audited) (Audited) (Audited) (Audited)
GBP GBP GBP GBP GBP GBP
Balance at 1 January 2020 263,445 48,887,392 998,495 (42,109,328) 116,030 8,156,034
Exercise of employee share 3,734 - - - - 3,734
options
Share-based payment charge - - 220,084 - - 220,084
Transfer on exercise of - - (214,812) 214,812 - -
employee share options
Transfer on issue of equity for 5,391 533,657 (237,018) - - 302,030
marketing purposes
Total transactions with owners 9,125 533,657 (231,746) 214,812 - 525,848
Loss for the year - - - (2,024,083) - (2,024,083)
Other comprehensive income for - - - - 35,822 35,822
the period
Balance at 31 December 2020 272,570 49,421,049 766,749 (43,918,599) 151,852 6,693,621
Consolidated Statement of Cash Flows
6 month period ended 30 6 month period ended 30 12 month period ended 31
June 2021 June 2020 December 2020
(Unaudited) (Unaudited) (Audited)
GBPm GBPm GBPm
Cash flows from operating activities
Loss for the period (2.3) (1.3) (2.0)
Taxation 0.0 0.0 (0.4)
Taxation refund 0.4 0.4 0.4
Adjustments for:
Amortisation and depreciation 0.3 0.3 0.7
(Increase)/Decrease in inventories (0.6) 0.8 1.0
Decrease in trade and other receivables 0.3 1.0 0.7
Increase/(Decrease) in trade and other (1.3) 0.3 0.0
payables
Increase in provisions 0.1 0.2 0.3
Share-based payment charge (0.0) 0.1 0.5
Net cash inflow/(outflows) from (3.1) 1.8 1.2
operating activities
Cash flows from investing activities
Development of intangible assets (0.1) (0.2) (0.3)
Net cash outflows from investing (0.1) (0.2) (0.3)
activities
Cash flows from financing activities
Proceeds from the issue of share 0.0 0.0 0.0
capital
Lease payments (0.2) (0.2) (0.5)
Net cash inflow/(outflow) from (0.2) (0.2) (0.5)
financing activities
Net cash inflow/(outflow) (3.4) 1.4 0.4
Cash at the beginning of the period 8.4 8.0 8.0
Movement in cash (3.3) 1.4 0.4
Effect of exchange rate fluctuations on 0.1 (0.2) 0.0
cash held
Cash at the end of the period 5.2 9.2 8.4
Notes to the accounts
1. Basis of preparation
The unaudited interim consolidated statements of eve Sleep plc
are for the six months ended 30 June 2021 and do not comprise
statutory accounts within the meaning of S.434 of the Companies Act
2006. These consolidated financial statements have been prepared in
accordance with the recognition and measurement requirements of
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRSs) as
adopted in the UK. They do not include all disclosures that would
otherwise be required in a complete set of financial statements.
The consolidated financial statements are presented in Sterling,
which is also the Group's functional currency.
Statutory accounts for the year ended 31 December 2020 have been
delivered to the registrar of companies. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to which the auditor drew attention by way of
emphasis without qualifying their report in respect of going
concern and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
Going concern
The interim consolidated statements are prepared on a going
concern basis notwithstanding that the group is competing and
disrupting an established market and as is typical for a business
at this stage of its lifecycle is still generating losses as it
uses working capital to develop the business model and market
share.
Changes to accounting standards
The interim consolidated statements have been prepared in
accordance with accounting policies that are consistent with the
accounts of the year ended 31 December 2020 and that are expected
to be applied in the Report and Accounts of the year ended 31
December 2021.
Leases
Following the period end, a new lease was commenced on the
registered office at 29A Kentish Town Road, London NW1 8NL. The
lease commenced on 1 August 2021 with a term of four years and a
break option at the end of the first two years.
2. Segmental Analysis
IFRS 8, "Operating Segments", requires operating segments to be
determined based on the Group's internal reporting to the Chief
Operating Decision Maker. The Chief Operating Decision Maker has
been determined to be the executive board and has determined that
the primary segmental reporting format of the Group is geographical
by customer location, based on the Group's management and internal
reporting structure. The executive board assesses the performance
of each segment based on revenue and gross profit after
distribution expenses, which excludes administrative expenses.
For the period 1 January 2021 - 30 June 2021
(Unaudited)
UK&I France Rest of Europe Total
GBPm GBPm GBPm GBPm
Revenue 11.7 2.2 - 13.9
Cost of sales (5.3) (1.0) - (6.3)
Gross Profit 6.4 1.2 - 7.6
Distribution expenses (1.5) (0.4) - (1.9)
Segmental results 4.9 0.8 - 5.7
Administrative expenses (8.0)
Loss before tax (2.3)
For the period 1 January 2020 - 30 June 2020
(Unaudited)
UK&I France Rest of Europe Total
GBPm GBPm GBPm GBPm
Revenue 9.9 2.3 - 12.2
Cost of sales (4.3) (1.1) - (5.4)
Gross Profit 5.6 1.2 - 6.8
Distribution expenses (1.2) (0.4) - (1.6)
Segmental results 4.4 0.8 - 5.2
Administrative expenses (6.3)
Share-based payment charge (0.1)
Loss before tax (1.3)
For the year ended 31 December 2020
(Audited)
UK&I France Rest of Europe Total
GBPm GBPm GBPm GBPm
Revenue 20.5 4.6 0.1 25.2
Cost of sales (8.7) (2.1) - (10.8)
Gross Profit 11.8 2.5 0.1 14.4
Distribution expenses (2.7) (0.8) - (3.5)
Segmental results 9.1 1.7 0.1 10.9
Administrative expenses (13.2)
Share-based payment charge (0.2)
Loss before tax (2.5)
No analysis of the assets and liabilities of each operating
segment is provided to the Chief Operating Decision Maker in the
monthly management accounts. Therefore, no measure of segmental
assets or liabilities is disclosed in this note.
Due to the nature of its activities the group is not reliant on
any major customers.
3. Earnings per share
The basic earnings per share is calculated by dividing the net
profit or loss attributable to equity holders of the Group by the
weighted average number of ordinary shares in issue during the
year.
30 June 2021 30 June 2020 31 December 2020
(Unaudited) (Unaudited) (Audited)
Weighted average shares in issue 273,309,103 267,004,775 269,819,716
Loss attributable to the owners of the parent company (GBP) (2,256,226) (1,270,332) (2,024,083)
Basic earnings/(loss) per share (pence) (0.83) (0.48) (0.75)
Diluted earnings/(loss) per share (pence) (0.83) (0.48) (0.75)
For the periods presented the weighted average number of shares
used for calculating the diluted loss per share are identical to
those for the basic loss per share. This is because the outstanding
share options would have the effect of reducing the loss per share
and would not be dilutive under IAS 33.
At 30 June 2021, options outstanding amounted to 16,985,396 (30
June 2020: 16,420,457). Given the loss for the period of
GBP2,256,226 (six months to 30 June 2020: loss of GBP1,270,332),
these options are anti-dilutive.
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ISIN: GB00BYWMFT51
Category Code: IR
TIDM: EVE
LEI Code: 2138007BAC29AUXWQE6
Sequence No.: 122801
EQS News ID: 1235419
End of Announcement EQS News Service
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September 23, 2021 02:00 ET (06:00 GMT)
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