EVE Esr 2022 Plc

 
 Eve Sleep plc (EVE) 
Eve Sleep plc: Pre-close trading update 
 
18-Jul-2019 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
          eve Sleep plc ("eve" or the "Company") 
 
          Pre-close trading update 
 
  · Halving of H1 loss year-on-year 
 
  · Robust balance sheet 
 
  · Launched new UK TV campaign in July 
 
  · New partnerships signed in July with Argos, Dunelm and Homebase 
 
  · On course to meet full year loss reduction expectations on slightly 
  lower revenue growth 
 
   eve Sleep, a direct to consumer sleep wellness brand operating in the UK, 
 Ireland (together the 'UK&I') and France, today issues a trading update for 
                     the six months ended 30 June 2019 (the 'Period'). 
 
                     Trading 
 
  In line with the rebuild strategy announced earlier in the year, the focus 
         in the Period has been on reducing EBITDA losses and improving cash 
   management. Good progress has been made in both cases. In line with Board 
 expectations, the Underlying EBITDA1 loss reduced by 50% to GBP5.9m (H1 2018: 
    -GBP11.9m), driven by the refocus on just three markets, greater marketing 
  efficiency and a reduction in overheads. Net cash at the end of the Period 
                      was GBP12.5m. 
 
    As previously guided Group revenue growth for the year is expected to be 
second half weighted. UK&I revenues for the Period were broadly flat at 0.9% 
 below last year, owing to the planned reduction in H1 marketing investment, 
as well as the challenging retail backdrop and a highly promotional mattress 
   market. France revenues decreased 29%, reflecting the Board's decision to 
          prioritise margin contribution over revenue growth, as well as the 
  additional work to localise and reposition the eve brand. Group underlying 
        revenue2 for the Period decreased by 8% to GBP12.9m (H1 2018: GBP14.1m). 
 
     The Board expects revenue growth to return in H2 with the launch of new 
 marketing campaigns, three new retail partnerships and the further benefits 
     of the rebuild strategy coming through. The Company remains on track to 
   deliver a full year EBITDA loss reduction in line with expectations as it 
 continues to focus on cost management, whilst full year revenue is expected 
to be slightly below previous guidance, owing to softer than expected market 
                     conditions in H1. 
 
                     Strategic progress 
 
        Good progress is being made against the three pillars of the rebuild 
                     strategy: 
 
  1) Differentiated brand positioning: Brand continues to be a key 
  differentiator to peers, with a new and distinctive UK campaign launched 
  on 13 July, continuing to promote the benefits of a good night's sleep 
  with a new endline 'eve.rise.shine.' In France there was a complete 
  creative refresh at the end of June, including a new marketing campaign 
  titled 'Renaissez chaque matin' (translation: Reborn every morning). 
 
  2) Expanded product range: Product development in the Period has been 
  strong and is expected to continue through the second half, with expanded 
  ranges across bed frames, storage, bedding and the baby collection driving 
  on-going improvement in the KPIs of customer repeat rate and sale of 
  non-mattress products. 
 
  3) Lower friction customer experience: The conversion rate has increased 
  as eve continues to work on improving the entire customer journey and 
  reducing the friction points to purchase. 
 
                     New retail partnerships 
 
    Retail partnerships remain an important element of the strategy, raising 
        brand awareness and increasing the number of places for customers to 
 experience and purchase eve products. Since the Period end new partnerships 
       have been signed with Argos, Dunelm and Homebase to sell eve products 
   through their online sites. The Argos partnership is expected to commence 
 around the end of this month, with Dunelm and Homebase launching later this 
                     summer. 
 
James Sturrock, CEO of eve Sleep, commented: 
 
 "I am pleased with the financial and strategic progress made in H1, against 
      a backdrop of substantial retail headwinds and the current competitive 
   nature of the category. We have a strong new team in place, and there are 
 early signs that the rebuild strategy is driving meaningful improvements in 
  our key metrics in both the UK&I and France. Our focus on reducing losses, 
whilst creating a differentiated proposition as a sleep wellness brand, will 
          underpin the business and lay the path to long-term profitability. 
 
We have some exciting plans and partnerships launching and I look forward to 
       seeing more progress against our strategy in some of the biggest peak 
           trading periods for the business in the second half of the year." 
 
                     Footnotes 
 
      1 Underlying EBITDA is defined as Group earnings before interest, tax, 
depreciation and amortisation and before share based payment charges. In the 
  current year the performance relates to the three core markets of the UK&I 
    and France. In the prior year it includes all the additional territories 
                     that eve was trading in at the time. 
 
 2 Group underlying revenue is defined as revenue for the core three markets 
   of the UK&I and France for both the current and prior year periods and is 
used to provide a more meaningful year-on-year comparison. In July 2018, the 
  Board reviewed the number of territories that eve traded from, deciding to 
    focus on these three markets and withdrawing from the other territories. 
 
For further information, please contact: 
 
eve Sleep plc                 via M7 Communications LTD 
 
James Sturrock, Chief 
Executive Officer 
 
Tim Parfitt, Chief Financial 
Officer 
 
finnCap Limited (NOMAD and           +44(0)20 7220 0500 
broker) 
 
Matt Goode (Corporate 
Finance) 
 
Hannah Boros (Corporate 
Finance) 
 
Alice Lane (ECM) 
 
M7 Communications LTD                +44(0)7903 089 543 
 
Mark Reed 
 
ISIN:          GB00BYWMFT51 
Category Code: TST 
TIDM:          EVE 
LEI Code:      2138007BAC29AUXWQE6 
Sequence No.:  13787 
EQS News ID:   842823 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

July 18, 2019 02:01 ET (06:01 GMT)

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