Eve Sleep plc (EVE)
Eve Sleep plc: Year-end trading update
21-Jan-2020 / 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.
Eve Sleep plc ("eve" or the "Company")
Year-end trading update
Strategic and operational progress, losses and cash burn reduced in-line
eve Sleep, the direct to consumer sleep wellness brand operating in the UK,
Ireland (together the 'UK&I') and France announces a trading update for the
year ended 31 December 2019.
Operational and strategic highlights
· eve's premium hybrid product announced as the top scoring mattress by
Which? in December 2019;
· Product and range expansion in-line with the rebuild strategy, with the
contribution of non-mattress sales1 increasing by 200 bps in the UK and
600 bps in France;
· Customer repeat rates1 up 230 bps in the UK&I and 360 bps in France;
· Signed and launched retail partnerships with Argos, Homebase and Dunelm;
· Landing of new brand campaign featuring the eve sloth - increasing
unprompted awareness by 50%.
· Group revenues in core markets of GBP23.8 million (2018: GBP29.3m);
· 43% year-on-year reduction in full year EBITDA losses (GBP10.8m), ahead of
· 51% full year reduction in cash burn;
· Net funds at 31 December 2019 of GBP8.1m, consisting of GBP7.8m of net cash
and GBP0.25m of advertising credits with Channel 42;
· Overheads for the year have reduced by 27% with further run-rate savings
The Company has continued to progress its rebuild strategy, prioritising
long term profitability and cash generation over short-term sales growth and
market share gains. Notwithstanding the year on year decline in revenue, the
Company has delivered a reduction in EBITDA losses ahead of its plans, along
with a halving in the cash burn. This shift towards more efficient marketing
and higher quality traffic, coupled with a more streamline cost base has
driven a reduction in EBITDA losses for the full year of 43% to
approximately GBP10.8m (2018: GBP19.2m). This translated into a 51% reduction in
cash burn to GBP10.3m (2018: GBP20.9m) and a year-end net cash balance of GBP7.8m,
plus GBP0.25m of advertising credits with Channel 4.
In Q4 2019 the Company made significant further cost reductions, which is
flowing through to an improving cash-burn and bottom line performance
compared to Q1-Q3 2019. Accordingly, management considers that its trading
in the last four months of the year is more indicative of its prospects for
2020. In the last four months of the year, the Company has for the first
time broken even at the operating level (positive margin contribution after
all direct and marketing costs but before overheads).
eve plans to publish its full year audited results on 24 March 2020.
James Sturrock, CEO of eve Sleep commented:
"We are delivering on our priorities of reducing losses and stemming cash
burn as we prioritise profitability over sales growth at any cost. We
continue to create award winning products to improve customer's sleep
wellness, as evidenced by our latest Which? Best Buy award for our premium
hybrid mattress, while removing unprofitable sales and marketing.
We are well placed to make further significant progress in 2020, with a
differentiated brand position, a broader product range than peers and
ongoing improvements to the customer experience, supported by a lower cost
base, a substantial cash balance and no debt. "
1 The split of non-mattress revenues and the customer repeat rate
calculations are based on sales made through the eve website, excluding
sales made through other channels such as retail partnerships
2 As part of the fund raise in February 2019, the Group raised GBP0.9m of
advertising credits with Channel 4, of which GBP0.25m is remaining at 31
The information contained within this announcement is deemed by the Company
to constitute inside information stipulated under the Market Abuse
Regulation (EU) No. 596/2014.
For enquiries, please contact:
eve Sleep plc
James Sturrock, Chief Executive via M7 Communications LTD
Tim Parfitt, Chief Financial Officer
finnCap Ltd - Nominated Adviser and Tel: +44 (0)20 7220 0500
Matt Goode / Hannah Boros - Corporate
Alice Lane - Equity Capital Markets
M7 Communications LTD - PR/IR Tel: +44(0)7903 089 543
Category Code: TST
LEI Code: 2138007BAC29AUXWQE6
Sequence No.: 41653
EQS News ID: 957439
End of Announcement EQS News Service
(END) Dow Jones Newswires
January 21, 2020 02:00 ET (07:00 GMT)