Eve Sleep plc (EVE) Eve Sleep plc: Trading Update 19-Jan-2022 /
07:00 GMT/BST Dissemination of a Regulatory Announcement that
contains inside information according to REGULATION (EU) No
596/2014 (MAR), transmitted by EQS Group. The issuer is solely
responsible for the content of this announcement.
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Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR)"
Trading update
Group revenue 11% ahead of 2019 pre-Covid comparators, targeting
UK&I breakeven in 2022
eve Sleep ("eve", the "Group" or the "Company"), the direct to
consumer sleep wellness brand operating in the UK, Ireland
(together "UK&I") and France announces a trading update for the
full year ended 31 December 2021. All figures remain subject to
audit. The Company plans to publish its full year audited results
on 24 March 2022.
Business highlights
-- Two year Group revenue growth of 11% achieved on 40% lower
marketing spend
-- Broadened range to operate in 6 categories, having developed
bedframes into a sizable business
-- Premium ranges now account for over 40% of revenue
-- Continued expansion into gifting and wellness, now with over
50 SKUs
-- Robust supply chain; average delivery lead times for all
large items remains below 10 days
Financial highlights
-- UK&I revenue increased 10% to GBP22.5m (2020: GBP20.5m)
and 22% on 2019 pre-Covid comparatives
-- Group revenue increased 6% to GBP26.6m (2020: GBP25.2m) and
11% on 2019 comparatives
-- EBITDA losses in H2 reduced 20% to GBP0.9m (2020 H2: loss
GBP1.1m)
-- In-line with our plans, higher marketing investment resulted
in full year EBITDA losses increasing toGBP2.9m, a 73% reduction on
pre covid 2019 comparators (2020: EBITDA loss of GBP2.0m, 2019:
GBP10.7m loss)
-- Cash outflow in H2 reduced to GBP0.7m (2021 H1: GBP3.1m
outflow)
-- Closing net cash at 31 December 2021 of GBP4.5m (2020:
GBP8.3m) following a GBP1.0m outflow in H1 2021 forone-off factors
relating to increased stock holding, payment of deferred VAT and
other working capital movements
Strong 2021 performance led by the UK
This is the third year of consecutive revenue growth in the
UK&I market, demonstrating clearly that the benefits of the
rebuild strategy continue to deliver and that the recovery is built
on sustainable foundations. Revenue growth in the UK&I was led
by ongoing strength in eve's ecommerce platform, reflecting the now
structural shift to online ordering. Demand was strong throughout
the year, including in December, where year-on-year growth remained
positive despite strong comparatives resulting from heavy lockdown
restrictions and store closures over the prior year Christmas 2020
period.
Revenue growth in the UK&I was broad based across mattresses
and non-mattress products, with particular strength in eve's award
winning premium hybrid mattress, the spindle bedframe and the
temperature balancing protector, in addition to new ranges, most
notably the 'sleep away' sleep over range. The increasing expansion
into sleep gifting and wellness ranges not only acts as a key
differentiator to more price led, mattress focused peers but it is
also driving up attachment rates as eve builds an increasingly
loyal customer following.
There are some early positive signs of progress in France as we
begin the reinvestment programme, including improved conversion
rates in the fourth quarter, against what remains a challenging
market backdrop of covid accelerated comparators and heavy
competitor activity.
eve's local manufacturing and re-engineered logistics has
enabled the Company to navigate the industry wide supply chain
issues and labour challenges that continue to constrain growth and
fuel inflationary pressures effectively. However, in the Christmas
trading period high levels of covid infection placed additional
strain on the delivery network resulting in customer service
challenges. We believe these challenges will be short lived and
reflect the current peak of absence due to illness across the
delivery network, and hence foresee customer experience returning
to our usual high levels over the next few months.
2022 trading and outlook - targeting UK&I breakeven
Notwithstanding increasing pressures on household discretionary
income as the cost of living crisis starts to bite, trading in the
first few weeks of the year has started well, with the Group
continuing to show year on year growth against challenging
comparisons with last year's January lockdown, (with 2021 one of
the strongest January's for e-commerce on record). The rebuild
strategy and the ongoing push into sleep wellness give the Company
confidence that despite the limited visibility on the broader
macro-economic backdrop, eve can move the UK&I business to a
position of breakeven in the current financial year whilst
continuing with the strategy in France to reach sustained topline
growth with a positive marketing contribution before overheads.
The management team will be hosting a live presentation with
Q&A for retail investors at 10:00 GMT today. The presentation
can be accessed via the Investor Meet Company platform. Interested
investors can sign up to Investor Meet Company for free and add to
meet EVE SLEEP PLC via the link:
https://www.investormeetcompany.com/eve-sleep-plc/
register-investor
Cheryl Calverley, CEO of eve Sleep commented:
"eve has made great progress in 2021, overcoming the many
external challenges we have faced, thanks to the dedication and
unswerving commitment of our incredible team. Our UK&I business
continues to go from strength-to-strength, on reduced marketing
spend, achieving 22% growth on pre-Covid 2019 comparatives. Whilst
COVID has put temporary challenges at the door of the delivery
network and a resulting pressure on our customer service team,
eve's unique strength is our supportive culture. This has seen an
'all hands on deck' mentality to addressing these customer issues,
with the executive team and colleagues from right around the
business leaning in to solve queries.
eve is fast evolving into a unique, digitally led retail
business, focused on the growing area of sleep wellness. This
transition is expected to accelerate, becoming more evident in 2022
as brand consideration continues to grow, alongside the launch of
new products and services, with the resulting improvement in
customer repeat rates. As a result we're proud to say we expect to
move the UK&I business to breakeven in 2022."
For further information, please contact:
eve Sleep plc
Cheryl Calverley, Chief Executive Officer via M7 Communications LTD
Tim Parfitt, Chief Financial Officer
finnCap Ltd (NOMAD and Broker)
Matt Goode / Teddy Whiley - Corporate Finance +44 (0)20 7220 0500
Alice Lane / Charlotte Sutcliffe - Equity Capital Markets
M7 Communications LTD
+44 (0)7903 089 543
Mark Reed
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ISIN: GB00BYWMFT51
Category Code: TST
TIDM: EVE
LEI Code: 2138007BAC29AUXWQE6
Sequence No.: 137372
EQS News ID: 1270113
End of Announcement EQS News Service
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(END) Dow Jones Newswires
January 19, 2022 02:00 ET (07:00 GMT)
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