Eve Sleep plc (EVE) 
Eve Sleep plc: Final Results 
 
24-March-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" the "Company" or the "Group") 
 
    Full Year Results 
 
Benefits of rebuild strategy increasingly evident, operationally profitable4 
    across last four months of 2019 
 
 eve, a direct-to-consumer sleep wellness brand operating in the UK, Ireland 
      (together the "UK&I") and France, its "Core Markets", today issues its 
         audited results for the year ended 31 December 2019 (the "Period"). 
 
         Financial Highlights 1 
 
                             2019 GBPm 2018 GBPm Movement 
                   Revenue 2    23.9    29.4     -19% 
              Gross profit 2    12.8    15.5     -18% 
       Gross profit margin 2   53.4%   52.7%  +70 bps 
Marketing contribution 2,3,4   (2.6)   (5.8)   +GBP3.2m 
    Underlying EBITDA loss 5  (10.7)  (19.1)   +GBP8.5m 
 Statutory loss for the year  (12.1)  (20.1)   +GBP8.0m 
 Cash and cash equivalents 6     8.0     6.0   +GBP2.0m 
 
         Financial Highlights 
 
· Sharpened focus on profitable sales, with gross margin in Core Markets2 
up 70bps; 
 
· Planned reduction in revenue and focus on move to profitability resulted 
in improved underlying EBITDA loss, which reduced by 44% to GBP10.7m (2018: 
GBP19.1m loss); 
 
· Reduced operating cash burn by 55%, with further cost savings made in Q4 
such that the combined trading performance in the last four months of the 
financial year reached the milestone of marketing contribution breakeven4; 
 
· Raised GBP11.7m net of expenses in new equity and GBP0.9m in advertising 
credits from Channel Four in February 2019. 
 
         Operational Highlights 
 
· 50% increase in UK&I unprompted brand awareness from 10% in January 2019 
to 15% in August 2019; 
 
· Increased brand loyalty with the customer repeat rate in the UK&I up 
230bps to 16.7% and up 360bps in France to 17.0%; 
 
· eve's premium hybrid mattress, launched June 2019, announced as the top 
scoring mattress by Which? in December 2019, giving eve's full adult 
mattress range Which? Best Buy ratings; 
 
· Extended ranges, with the contribution of non-mattress products in core 
markets up 230bps to 22.0%; 
 
· Extended omni-channel reach with new retail partnerships with Argos, 
Homebase and Dunelm; 
 
· Commenced 3 year deal with British Rowing to be their official sleep 
partner, supporting the GB Rowing Team as they train and compete at home 
and overseas; 
 
· Returns rate in core markets reduced 40bps to 8.9%. 
 
         Current trading 
 
 Trading in the first two months of the year has started well and is in-line 
  with the Board's expectations, with demand for the premium hybrid mattress 
      proving particularly strong. The business has now generated a positive 
         marketing contribution4 for the six months to 29 February 2020. 
 
  Wider market uncertainty increased further in the first two weeks of March 
   with the advent of COVID-19 but at that time there had been no noticeable 
   impact on demand, our operations or our supply chain. Over the last week, 
    since mid-March, we have seen some impact on traffic and consumer demand 
     attributable to the fast changing COVID-19 situation, and believe it is 
reasonable to expect somewhat subdued demand for a period of time whilst the 
         COVID-19 situation prevails. 
 
      The Board has reviewed planning scenarios and has prepared a number of 
    appropriate measures to conserve the Group's cash balance and ensure the 
robustness of the business should it be required. Given eve's business model 
  as a direct to consumer (DTC) led retailer, its most significant costs are 
 marketing rather than the costs associated with a store estate, and we have 
 significant flexibility to control our spending and therefore cash outflows 
in this regard. The Company's marketing spend will continue to be kept under 
    constant review, with adjustments to plans made where appropriate and in 
         line with the fast changing economic situation. 
 
     On 15 March, the Board took the decision to ensure all of the Company's 
employees were to work from home. The Company's employees are more than used 
  to working from home as a result of a flexible working culture and as such 
 we have not experienced any material issues or disruptions to the Company's 
         operations as a result of this decision. 
 
To date we have seen only a small impact upon our supply chain, and where we 
   have seen impact, we have taken precautionary measures including stronger 
stock holding of products to ensure adequate coverage for the coming months, 
  and hence we currently envisage being able to meet customer demand for our 
 products, albeit at reduced levels. Further interventions by governments in 
     the jurisdictions in which we operate may have a material impact on our 
         supply chain and/or delivery capability going forward. 
 
         James Sturrock, CEO of eve Sleep, commented: 
 
     "We enter 2020 in good shape, with the benefits of the rebuild strategy 
        becoming increasingly evident. We have award winning products and an 
       increasingly differentiated, premium brand position in sleep wellness 
      compared to the more price led, mattress focused peers, underpinned by 
      upgraded operational capability and a significantly reduced cost base. 
      Improved financial and operational KPIs demonstrate increased customer 
         loyalty across our expanding product suite. 
 
  I am delighted that in the six months to 29 February 2020 eve has improved 
    marketing efficiency 7 and reduced central overheads and is on course to 
       deliver a significant EBITDA improvement in 2020. While there remains 
  considerable wider market uncertainty over the rest of the financial year, 
we have a healthy net cash position of GBP7.8m as at 29 February 2020, no debt 
         and a rebuild strategy that is delivering." 
 
         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 In July 2018, the Board reviewed the number of territories that eve traded 
   from, deciding to focus on the "Core Markets" of the UK&I and France, and 
   withdrawing from the other territories. Thus, this note presents revenue, 
gross profit, gross profit margin and marketing contribution attributable to 
         the Core Markets for the current and prior period. 
 
3 Indirect marketing costs, such as the costs of production of TV campaigns, 
      were previously presented within overheads but are now included within 
   marketing costs. 2018 marketing costs have been restated to include these 
     indirect marketing costs. The impact of this restatement solely impacts 
  management information (direct and indirect marketing costs being included 
        in administrative expenses in both the current and prior period) and 
  therefore there is no impact of the restatement on the statutory statement 
         of profit and loss and other comprehensive income. 
 
      4 Marketing contribution is defined as the profit/loss after marketing 
  expenditure but before payroll and overhead costs; a measure also referred 
         to as operational profitability. 
 
       5 Underlying EBITDA is defined as earnings before interest, taxation, 
         depreciation, amortisation, impairment, share-based payment charges 
   connected with employee remuneration, fundraise-related expenditure (2019 
         only) and staff and country exit costs (2018 only). 
 
       6 In addition to the cash and cash equivalents balance of GBP8.0m at 31 
    December 2019, the Group also benefits from GBP0.3m in advertising credits 
   outstanding with Channel 4, following GBP0.9m of credits raised at the fund 
         raising in February 2019. 
 
  7 Marketing efficiency is defined as total reported marketing cost divided 
     by the reported revenue for the specified segment, thus as the reported 
         percentage falls marketing efficiency improves. 
 
 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 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 / Hannah Boros 
         (Corporate Finance) 
 
   Alice Lane / Manasa Patil 
                       (ECM) 
       M7 Communications LTD        +44(0) 7903 089 543 
 
                   Mark Reed 
 
         chairman's statement 
 
"We are confident that we have a winning product, the right strategy and the 
 team to build a sleep wellness brand of size and strength that delights our 
     customers and delivers value to all of our stakeholders." - Paul Pindar 
 
         delivering the rebuild strategy 
 
        The focus in 2019 has been on the continued execution of the rebuild 
    strategy through the prioritisation of reducing losses and stemming cash 
        flows, over chasing sales growth at any cost. To effect this we have 
    sharpened our focus on profitable sales, removing unprofitable channels, 
         while further improving our marketing efficiency. 
 
       We remain confident that this is the right strategy for the business, 
particularly given the continued challenging retail backdrop and the ongoing 
  discount-reliant competition in the mattress market. To fund the execution 
    of the strategy and to strengthen the statement of financial position we 
      successfully raised GBP11.7m (net of expenses) plus GBP0.9m of advertising 
     credits with Channel 4 in February 2019. As at 31 December 2019 eve has 
  GBP8.0m of cash and cash equivalents, GBP0.3m of advertising credits available 
  for use and no debt (excluding the lease liability arising under IFRS 16). 
 
The team has made good strategic and financial progress in the year. Product 
 development which is central to our aim of building a sleep wellness brand, 
 was strong in both mattress and wider sleep range products. The eve premium 
   hybrid mattress, which was launched in June 2019 was announced as the top 
        scoring mattress by Which? in December 2019, giving eve's full adult 
   mattress range a Which? Best Buy rating. Good progress was also made with 
the expansion of wider sleep products including the launch of new bed frames 
     and bedding, all of which has driven a 140 bps and 590 bps year-on-year 
 increase in the contribution from non-mattress sales in the UK&I and France 
      respectively. Range expansion has also supported an improvement in the 
 customer repeat rate, increasing 230 bps in the UK&I and 360 bps in France. 
 
 We continue to develop our multi-channel offering through partnerships with 
  leading retailers where the relationship is strategically and commercially 
     value creating for both parties. During the year we signed and launched 
    partnerships with Argos, Homebase and Dunelm and in addition to creating 
      more sales opportunities, these partnerships help to raise eve's brand 
         awareness. 
 
Elevating the brand position above our peers has always been a core strength 
         at eve and it remains so. In July 2019 we launched a new and highly 
successful brand campaign featuring the eve sloth and in September we signed 
   a three year deal with British Rowing to be their official sleep partner, 
including managing the sleep environment of the GB Rowing Team athletes both 
   at home and overseas. Together, these marketing initiatives have driven a 
         50% increase in unprompted brand awareness to 15%. 
 
         improving financial performance 
 
As planned, Group revenues from Core Markets reduced year on year, declining 
  by 19% to GBP23.8m (2018: GBP29.4m) as we optimised our DTC marketing, scaling 
         back marketing investment by 32% across UK&I and France in order to 
prioritise profitable revenues over revenue growth alone. Year-on-year Group 
         gross profit margin improved from 52.8% to 53.1% reflecting margin 
       prioritisation over revenue growth. Group underlying EBITDA losses[1] 
    reduced by 44% to GBP10.7m, supported by a 24% reduction in administrative 
      expenses (excluding marketing expenses, fundraise-related expenditure, 
        depreciation, amortisation and impairment charges) for the year. The 
   reduction in the cash outflow from operating activities was even greater, 
         down 55% year-on-year. 
 
  Our results in the last four months of the year showed further progress on 
 our path to profit, reaching for the first time break-even at the operating 
 level, defined as a positive margin contribution after all direct costs and 
    marketing but before overheads. The attainment of this milestone follows 
      further significant cost savings in Q4 as well as the benefits flowing 
   through from earlier initiatives. Accordingly, we see our results for the 
 final four months of the year as more indicative of our prospects for 2020. 
 
         our people 
 
  This has been the second year of considerable change for our people, which 
       has included a move to new local offices as well as an organizational 
  restructure. Whilst this has been the right course of action strategically 
 for the business, I understand that it is both difficult and unsettling and 
      I would like to thank them all personally for their continued loyalty, 
         positivity and commitment to rebuilding eve. 
 
 We are confident that we have a winning product, the right strategy and the 
 team to build a sleep wellness brand of size and strength that delights our 
         customers and delivers value to all of our stakeholders. 
 
         current trading and outlook 
 
 Trading in the first two months of the year has started well and is in-line 
  with the Board's expectations, with demand for the premium hybrid mattress 
      proving particularly strong. The business has now generated a positive 
         marketing contribution[2] for the six months to 29 February 2020. 
 
  Wider market uncertainty increased further in the first two weeks of March 
   with the advent of COVID-19 but at that time there had been no noticeable 
 impact on demand, our operations or our supply chain. Since mid-March 2020, 
 we have seen some impact on traffic and consumer demand attributable to the 
    fast changing COVID-19 situation, and believe it is reasonable to expect 
  somewhat subdued demand for a period of time whilst the COVID-19 situation 
         prevails. 
 
      The Board has reviewed planning scenarios and has prepared a number of 
    appropriate measures to conserve the Group's cash balance and ensure the 
robustness of the business should it be required. Given eve's business model 
  as a direct to consumer (DTC) led retailer, its most significant costs are 
 marketing rather than the costs associated with a store estate, and we have 
 significant flexibility to control our spending and therefore cash outflows 
in this regard. The Company's marketing spend will continue to be kept under 
    constant review, with adjustments to plans made where appropriate and in 
         line with the fast changing economic situation. 
 
To date we have seen only a small impact upon our supply chain, and where we 
   have seen impact, we have taken precautionary measures including stronger 
stock holding of products to ensure adequate coverage for the coming months, 
  and hence we currently envisage being able to meet customer demand for our 
         products, albeit at reduced levels. 
 
         Paul Pindar 
 
         Chairman 
 
         23 March 2020 
 
         strategic report 
 
         strategic review 
 
    "Building customer loyalty and ultimately driving repeat sales is at the 
       centre of the eve model and is essential to attaining profitability." 
 
         on trend in a large and growing market 
 
        Wellness is a mega trend, transcending age and geography. Within the 
   wellness sphere there is an increasing understanding and recognition that 
   sleep sits alongside nutrition and physical fitness as the foundations of 
       wellness. There is also 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 recent poll of 2,000 UK adults 
 commissioned by eve, 58% of respondents expressed worry about the potential 
    impact a lack of sleep can have on mental and physical health and 75% of 
         customers tell us they are better slept simply by having one of our 
         products. 
 
       With the increasing understanding of the importance of sleep has come 
      consumer change. Consumers are spending more on wellness and the sleep 
 market has been a beneficiary of this. Not only are consumers spending more 
on sleep wellness related products but they are willing to spend more on the 
     central element of a good night's sleep; the mattress. The strong sales 
 performance of eve's most recently launched premium hybrid mattress testify 
         to this point. 
 
     Data from Euromonitor estimates that the European sleep market is worth 
 GBP26bn, with the Core Markets that eve is focused on (UK&I and France) being 
      worth GBP6bn. The market is however highly fragmented, populated by many 
 traditional operators offering a proposition that has changed little in the 
    last fifty years. There is also an increasing willingness on the part of 
  consumers to purchase big ticket items online, with Euromonitor predicting 
  that the online furniture market will be the second fastest growing retail 
      category, with online purchase penetration expected to increase by 55% 
         between 2018 and 2023. 
 
    In terms of the competitive landscape there are a limited number of well 
  branded new digital offerings. However, no company is yet to break through 
   in terms of establishing a sleep wellness brand which commands widespread 
recognition and brand loyalty. eve's ambition is to achieve just this; to be 
         seen as the go to brand for sleep wellness products. 
 
         business model 
 
     eve is a digitally native business, with a direct to consumer (DTC) led 
         proposition, supported by partnerships with leading retailers. This 
omni-channel approach reflects how consumers increasingly identify, research 
  and purchase items, moving seamlessly between online and offline channels. 
         By being where the customer is, eve increases its potential sales 
      opportunities and grows its brand awareness and product understanding. 
 
     Building customer loyalty and ultimately driving repeat sales is at the 
     centre of the eve model and is essential to attaining profitability. To 
achieve this goal eve is focused on establishing itself as a go to brand for 
     sleep wellness products, which would provide the authority and consumer 
         trust to sell a broader range of products in the category. 
 
       As a DTC focused business, eve maintains close relationships with its 
  customers and leverages a rich data set from which to better target repeat 
    customers and attribute purchases to the many touchpoints eve has in the 
marketplace. eve has worked to greatly expand its collection and use of such 
data during 2019 culminating in detailed econometric and attribution insight 
     now at the forefront of the business. The insights gained from customer 
     feedback also power new product development and refinements to existing 
  ranges. The continued growth in eve's customer repeat rate which in the UK 
 has more than doubled to 17.3% in the second half of 2019 from just 8.0% in 
     the first half of 2016, demonstrates that eve is succeeding in building 
  brand loyalty amongst its customers. As a brand led business, resources in 
 terms of investment and talent are focused on the key operations of product 
   development, branding, marketing and customer experience. As is common in 
  the industry, manufacturing and fulfilment, which require heavy fixed cost 
   investment, are outsourced to leading third party suppliers in the UK and 
        Continental Europe. This set-up has proved to be highly scalable and 
flexible, enabling significant seasonal variations in monthly product demand 
   to be met without any noticeable margin impact or the requirement to hold 
  large amounts of product stock. There is also a close working relationship 
 with eve's manufacturing partners to innovate and develop new products that 
 work better in terms of function and design and that differentiate eve from 
         peers, without a premium price tag. 
 
 The outsourced manufacturing and fulfilment model, coupled with the DTC led 
       setup, enables a lower and more flexible cost base than a traditional 
    retailer. Although marketing costs are one of the largest costs for eve, 
   they are more flexible in nature and it is easy to scale them up and down 
         quickly and switch between marketing channels. 
 
         chief executive's report 
 
"What is certain is that eve has closed out 2019 in a stronger position than 
 it started the year. There is still much that can and will be done to drive 
     further improvements and this work will continue through 2020." - James 
         Sturrock 
 
         introduction 
 
         In 2019 we completed the restructuring of the management team, made 
significant progress in professionalising internal operations, processes and 
reporting, optimised our supplier and logistics footprint, and significantly 
    reduced the operating costs of the business. These things, alongside the 
progress of our customer facing rebuild strategy have significantly improved 
       EBITDA results on the path to profitability and put eve on a steadier 
   footing to deliver our plans for the long-term health of the business. We 
consider that headwinds in the competitor landscape and discounting pressure 
will continue, but the premium positioning of the brand and the work we have 
   completed to create a stable and lean platform, along with a healthy cash 
balance, will aid the execution against our plans in order to succeed in the 
         future. 
 
  The first few months of my tenure, which commenced in September 2018, were 
       spent evaluating the business and formulating what we refer to as the 
 rebuild strategy. Although implementation of the rebuild strategy commenced 
 in late 2018, work has continued throughout 2019 on effecting and embedding 
     change and improvement throughout all areas of the business in order to 
 attain our stated goal of profitability and positive cash generation in the 
   near term. There is still much that can and will be done to drive further 
         improvements and this work will continue through 2020 and beyond. 
 
 What is certain is that eve has closed out 2019 in a stronger position than 
        it started the year. We have a broader, award-winning product range. 
        Operational KPIs, including the customer repeat rate and the sale of 
         non-mattress products improved during the year, while our financial 
         performance strengthened considerably, evidenced by a reduction in 
        administrative expenses excluding marketing costs, fundraise-related 
   expenditure, depreciation, amortisation and impairment of 24%. We reduced 
      our underlying EBITDA losses by 44% and trimmed our cash outflows from 
       operating activities by 55%, which is all the more pleasing given the 
        challenging retail backdrop and ongoing price led competition in the 
   mattress market. Our cash position has also improved, with a year-end net 
    cash position of GBP8.0m plus GBP0.3m of advertising credits with Channel 4, 
    compared with GBP6.0m as at 31 December 2018, owing to the fund raising in 
         February 2019. 
 
         the rebuild strategy 
 
         The rebuild strategy focuses on three core pillars: 
 
· differentiated brand positioning; 
 
· expanded product range; and 
 
· lower friction customer experience. 
 
         differentiated brand positioning 
 
   To differentiate eve from the plethora of mattress in a box brands, where 
     competition is largely price led, our strategy is to establish eve as a 
   trusted go to destination for sleep wellness products. To achieve this we 
         have been refocusing and aligning our marketing investment and 
        communications on the benefits that eve can bring consumers in sleep 
    wellness. This is best exemplified in the three-year partnership deal we 
   signed in 2019 with British Rowing to be their official sleep partner. As 
 part of the deal we will be managing the sleep environment of the GB Rowing 
         Team athletes as they train and compete both at home and overseas. 
 
During the first half of the year we ran existing marketing campaigns whilst 
 testing new promotional strategies and channel mix, as well as carrying out 
        analysis on a granular level of marketing return on investment. This 
 supported the development of the new brand, communications and the creative 
 strategy, which launched in the UK&I at the start of H2 2019 with the 'wake 
      up dancing' campaign, featuring the eve sloth. The campaign has proved 
      immensely successful, raising unprompted brand awareness by 50% to 15% 
         between January 2019 and August 2019. It has also driven increased 
engagement with customers, so much so that in response to customer demand we 
     have produced and sold circa. 6,000 soft toy eve sloths at the close of 
         2019. 
 
In France, the investment and media strategy has been adapted to make better 
         use of the peak sales periods, driving more efficient spend with an 
  optimised creative strategy and revitalised positioning. This positioning, 
      which launched with the 'reborn again each morning' ('renaissez chaque 
  matin') campaign in July 2019 is designed to elevate eve to be the premium 
brand in the nascent direct-to-consumer mattress category in France, premium 
    mattress sales making up 44.9% of total mattress sales in December 2019. 
 
   The success of our marketing to date is demonstrated in our unprompted UK 
         brand awareness, which has increased from 11.2% in November 2018 to 
         approximately 15% at August 2019. 
 
    In addition to refocusing the positioning of our marketing, considerable 
         effort has gone into improving marketing efficiency, including the 
  development of a bespoke-built optimisation model. Subsequently, marketing 
    investment has been substantially reviewed, with the removal of channels 
  that were not generating a sufficient return, in line with our strategy of 
  focusing on profitable sales and margin positive first orders. The success 
of this strategy is best evidenced in the efficiency of our marketing spend, 
  which has improved in all three of our core markets in tandem with growing 
 awareness. In the UK&I marketing efficiency has improved from 54.1% in 2018 
         to 52.3% in 2019; marketing efficiency being defined as marketing 
expenditure as a percentage of revenue. This is the third successive year of 
  improvement and we see scope to further reduce this percentage in 2020. In 
  France, marketing efficiency improved from 82.9% in 2018 to 44.1% in 2019. 
 
       To measure our success in delivering on this strategic pillar we will 
  continue to monitor and report on the KPI of unprompted brand awareness in 
    the UK and marketing efficiency, given its importance for the pathway to 
         profitability. 
 
         expanded product range 
 
In 2019 we stepped up new product development, building out a range of sleep 
  products to complement our successful next generation foam mattress. Range 
    expansion gives eve a clear trajectory to dominating the ecommerce sleep 
   wellness space in our chosen markets and provides the opportunity to grow 
         the frequency of customer purchases. 
 
     In the mattress category we launched the premium hybrid mattress, which 
  received a Which? Best Buy rating, scoring the highest rating ahead of all 
 competitor mattresses in the UK in December 2019. At the close of 2019, eve 
    now has a suite of four mattress products sold via its DTC channel - the 
 premium foam, the premium hybrid, the original foam and the hybrid, as well 
         as the baby mattress. 
 
  The rate of new product development increased significantly in the period, 
   with the launch of new bedframes and expanded ranges of bedding, pillows, 
  sleep accessories and the baby category. Sales of bedframes, including two 
         new storage bedframes, have performed particularly well. 
 
 The improvements in this pillar of the strategy are evident in our KPIs. In 
2019 the customer repeat rate in the UK&I grew 230bps to 16.7% and in France 
    increased 360bps to 17.0%. This growth was underpinned by an increase in 
sales of non-mattress products in each of the core markets. In the UK&I, the 
contribution from non-mattress DTC sales increased by 130bps to 24.8% and in 
         France improved by 590bps to 28.2%. 
 
       To measure our success in delivering on this strategic pillar we will 
      continue to monitor and report on the KPIs of conversion rates and the 
         growth in non-mattress sales. 
 
         lower friction customer experience 
 
  Enhancing the customer experience throughout the online journey and in our 
         service proposition to enable stronger site conversion and customer 
satisfaction metrics is central to our rebuild strategy. Improved conversion 
  will not only drive higher revenues but also greater marketing efficiency, 
         which is key to achieving profitability. 
 
   The entire customer journey through the eve website prior to purchase has 
       been substantially upgraded during the year. This includes a 50% plus 
    increase in the speed of loading the website plus a redesigned home page 
 with more focus on inspiring customers, building out category pages to help 
      users more easily discover products within our expanded ranges and new 
  imagery, with copy/zoom functionality. Improvements have also been made to 
         how promotions are presented on the website. 
 
  To improve the purchase process, the basket and checkout have been rebuilt 
  to make them faster and more intuitive, resulting in an improvement in the 
basket completion rate. The delivery proposition has also been improved with 
     a move to a new carrier portfolio and warehouse consolidation, which is 
        expected to result in improved delivery experience for customers and 
    efficiencies in distribution costs. In addition to better communications 
      with customers around confirmation, delivery tracking and product care 
guides, customers are now able to select a nominated delivery day for larger 
         orders. 
 
The changes made to the website and customer proposition have driven a 30bps 
         year-on-year improvement in the conversion rate. 
 
       We recognise the importance of providing an omnichannel approach, for 
        consumers that freely move between online and offline channels, when 
   researching and purchasing products. During the year we have extended our 
   reach with three new retail partnerships with Argos, Homebase and Dunelm, 
         all of which have subsequently launched. 
 
    To measure our success in delivering on this strategic pillar we will be 
monitoring and reporting on the KPIs of conversion rates and eve's new sleep 
 wellness score, a measure of customers reporting improved sleep as a result 
         of purchasing an eve product. 
 
         responsible business 
 
   As a business we recognise our responsibility to our stakeholders and the 
        wider community at large. We continue to strive to make improvements 
   throughout our operations in order to reduce our environmental footprint. 
        Our localised production facilities mean that we are not trucking or 
   airfreighting long distances, while our mattress boxes used for packaging 
    are produced in the UK and made from Forest Stewardship Council approved 
  card. When customers return mattresses they are either broken down and the 
  materials recycled or refurbished, depending on their condition. We do not 
         send mattresses to landfill. 
 
         culture and diversity 
 
     We thrive on individuality at eve. We believe that irrespective of age, 
gender, ethnic origin, religion, sexual orientation, gender identity, gender 
       expression, or disability, eve is a place of opportunity, respect and 
 support for individuals to bring their best to work and do their best work. 
 
 eve are pleased to present the following metrics relating to gender balance 
 as at 31 December 2019. The following breakdown shows the number of persons 
         of each sex who were: 
 
         (i) directors of the company; 
 
        (ii) senior managers of the company (other than those falling within 
         category (i)); and 
 
         (iii) employees of the company. 
 
                Male Female 
Directors          4      1 
Senior managers    3      4 
Employees         28     33 
 
         2020 focus 
 
   In the second half of 2019 we took the decision to accelerate our move to 
 profitability and positive cash generation by making additional significant 
  cost efficiencies in the business, primarily in the areas of marketing and 
       overheads. These changes were made in the fourth quarter of the year. 
 
     The cumulative benefits of management initiatives and efficiencies made 
    throughout 2019 as part of the rebuild strategy are coming through in an 
  improved financial performance. I am delighted to report that in the final 
        four months of the year we reached a milestone in terms of achieving 
      operational breakeven, after all direct costs and marketing but before 
     overheads. We enter 2020 with a sizeable year-on-year reduction in both 
      overheads and planned marketing investment, which we expect to drive a 
         further substantial reduction in losses and cash burn. 
 
     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 of GBP7.8m as at 29 February 2020 and no debt 
         (excluding the lease liability arising under IFRS 16). 
 
         James Sturrock 
 
         Chief Executive Officer 
 
         23 March 2020 
 
         key performance indicators 
 
 In 2019, the key performance indicators (KPIs) used to evaluate and monitor 
 the performance of the business were as follows and are designed to support 
        the three core pillars of the rebuild strategy (differentiated brand 
positioning, extended product range and lower friction customer experience). 
         There are three financial KPIs and five operational KPIs. 
 
         Financial KPIs [3]: 
 
· Overall revenue growth; 
 
· Marketing efficiency; 
 
· Underlying EBITDA. 
 
         Operational KPIs 3: 
 
· UK brand awareness; 
 
· Product return rates; 
 
· eve website conversion rate; 
 
· eve customer sleep wellness score; 
 
· Non-mattress revenue growth. 
 
     The results of the KPIs are set out below. Financial KPIs focus on both 
Group and Core Markets results whilst the operational KPIs focus on measures 
  tracked in the Core Markets of UK&I and France. Whilst lower than original 
     expectations (due to the reasons set out in the Strategic Report), both 
   financial and operational KPIs show broadly positive trends against 2018: 
 
         Group and Core Markets Financial KPIs 3 
 
· Group revenue decreased by 31% to GBP23.9m (2018: GBP34.8m); 
 
· Core Markets revenue decreased by 19% to GBP23.9m (2018: GBP29.4m); 
 
· Improvement in Group marketing efficiency by 1313bps to 50.5% (2018: 
63.7%); 
 
· Improvement in Core Markets marketing efficiency of 1030bps to 50.5% 
(2018: 60.8%); 
 
· Group underlying EBITDA losses reduced by 44% to GBP10.7m loss (2018: 
GBP19.1m loss). 
 
         Core Markets Operational KPIs 3 
 
· Increase in non-mattress Core Markets sales as a proportion of total 
sales by 230bps to 22.0% (2018: 19.0%); 
 
· Unprompted UK brand awareness: 380bps increase in unprompted UK brand 
awareness (August 2019: 15.0%; November 2018: 11.2%); 
 
· eve customer sleep wellness score: 8/10 (2018: n/a as a new metric in 
2019); 
 
· 40bps year-on-year improvement in the returns rate to 8.9% (2018: 9.3%); 
 
· 30bps year-on-year improvement in the eve website conversion rate. 
 
         glossary 
 
         Definitions of Financial and Operational KPIs: 
 
      Overall revenue growth - % change in value of reported revenue for the 
         specified segment of the latest period vs the previous period. 
 
Marketing efficiency - total reported marketing cost divided by the reported 
    revenue for the specified segment, thus as the reported percentage falls 
         marketing efficiency improves. 
 
         Underlying EBITDA - earnings before interest, tax, depreciation, 
     amortisation and impairment, share-based payment charges connected with 
  employee remuneration (2018 and 2019), fundraise-related expenditure (2019 
       only) and staff and country exit costs (2018 only). Underlying EBITDA 
  reflects what management believe to demonstrate the underlying performance 
         of the business in a given year. 
 
     Non-mattress sales as a proportion of total sales - % of reported sales 
   attributable to non-mattress products for the specified financial period. 
    The Group track this Operational KPI in addition to the Financial KPI of 
overall revenue growth as returns and deferrals are not tracked in isolation 
for non-mattress sales. Total sales represents all sales after discounts and 
         VAT and before deferred revenue, refunds processed and the refunds 
         provision. Non-mattress sales represents the value of sales from 
         non-mattress products. 
 
UK Brand awareness - when asked question "What mattress brands can you think 
  of?" the % of total respondents that answer eve (externally assessed using 
         industry polling agencies). 
 
    Product return rates - return rate % is calculated by dividing the total 
 value of sales returns by the value of net sales of goods including freight 
         (all excluding VAT). 
 
        eve website conversion rate - the percentage of website traffic in a 
 specific period that complete a purchase. Calculated by dividing the number 
 of completed sales orders divided by the total website traffic. This figure 
         is compared on a bps movement between periods. 
 
  eve customer sleep wellness score - the average number of customers out of 
 every ten customers that report improved sleep as a result of purchasing an 
      eve product (internally assessed using post-purchase email campaigns). 
 
         financial review 
 
   "Whilst Core Markets revenue fell by 19% from GBP29.4m in 2018 to GBP23.9m in 
2019, eve achieved a 70% reduction in group losses after distribution costs, 
payment fees and marketing expenses with losses falling from (GBP8.6m) in 2018 
          to (GBP2.5m) in 2019." - Tim Parfitt 
 
         group financial performance 
 
                                     GBPm   2019     2018 Movement 
 
                                               Restated 
                   Core Markets revenue   23.9     29.4    (19%) 
                          Other revenue  (0.0)      5.5   (101%) 
                          Group revenue   23.9     34.8    (31%) 
              Core Markets gross profit   12.8     15.5    (18%) 
                     Other gross profit  (0.1)      2.9   (103%) 
                           Gross profit   12.7     18.4    (31%) 
                  Distribution expenses  (2.7)    (4.1)     +33% 
     Profit after distribution expenses    9.9     14.3    (31%) 
                           Payment fees  (0.4)    (0.7)     +41% 
                     Marketing costs[4] (12.1)   (22.2)     +46% 
      Loss after distribution expenses,  (2.5)    (8.6)     +70% 
       payment fees and marketing costs 
Wages & Salaries (excluding share-based  (4.4)    (5.4)    (18%) 
                       payment charges) 
          Other administrative expenses  (5.0)    (6.1)    (17%) 
  Share-based payment charges connected  (0.5)    (0.3)     +76% 
               to employee remuneration 
                         Operating loss (12.5)   (20.3)    (39%) 
                     Net finance income    0.0      0.0    (60%) 
                        Loss before tax (12.5)   (20.3)    (38%) 
                               Taxation    0.4      0.2     +82% 
                         Loss after tax (12.1)   (20.1)    (40%) 
   Reconciliation to underlying EBITDA: 
                               Taxation  (0.4)    (0.2) 
                     Net finance income  (0.0)    (0.0) 
          Fundraise-related expenditure    0.2        - 
  Share-based payment charges connected    0.5      0.3 
               to employee remuneration 
           Staff and country exit costs      -      0.8 
          Depreciation and amortisation    0.5      0.1 
                             Impairment    0.6      0.0 
                      Underlying EBITDA (10.7)   (19.1)    (44%) 
 
         group financial performance as a % of revenue 
 
                          % of Revenue    2019     2018 Movement 
 
                                               Restated 
                          Gross Profit   53.1%    52.8%   +37bps 
                          Distribution (11.4%)  (11.6%)   +21bps 
             Profit after distribution   41.7%    41.1%   +57bps 
                             Marketing (50.5%)  (63.7%) +1313bps 
     Administrative expenses excluding (41.4%)  (35.0%) (634bps) 
                             marketing 
     Administrative expenses excluding (35.9%)  (34.6%) (135bps) 
          marketing, fundraise-related 
            expenditure, depreciation, 
           amortisation and impairment 
                           expenditure 
 
         UK&I financial performance 
 
                                      GBPm  2019     2018 Movement 
 
                                               Restated 
                                 Revenue  18.5     22.5    (18%) 
                            Gross Profit  10.2     11.8    (14%) 
                            Distribution (1.8)    (1.7)      +7% 
               Profit after distribution   8.4     10.1    (17%) 
                            Payment fees (0.4)    (0.4)    (13%) 
                               Marketing (9.7)   (12.2)    (20%) 
   Loss after distribution, payment fees (1.7)    (2.5)    (31%) 
                           and marketing 
 
         France financial performance 
 
                                      GBPm  2019     2018 Movement 
 
                                               Restated 
                                 Revenue   5.3      6.8    (22%) 
                            Gross Profit   2.6      3.7    (29%) 
                            Distribution (1.0)    (1.2)    (16%) 
               Profit after distribution   1.6      2.5    (36%) 
                            Payment fees (0.1)    (0.1)    (34%) 
                               Marketing (2.4)    (5.7)    (58%) 
   Loss after distribution, payment fees (0.9)    (3.3)    (74%) 
                           and marketing 
 
         Other financial performance 
 
                                      GBPm  2019     2018 Movement 
 
                                               Restated 
                                 Revenue (0.0)      5.5   (101%) 
                            Gross Profit (0.1)      2.9   (103%) 
                            Distribution   0.1    (1.2)   (108%) 
               Profit after distribution   0.0      1.7    (99%) 
                            Payment fees   0.0    (0.2)   (103%) 
                               Marketing   0.0    (4.3)   (100%) 
   Loss after distribution, payment fees   0.0    (2.8)   (101%) 
                           and marketing 
 
         revenue 
 
  Revenue in Core Markets decreased by 19% to GBP23.9m in 2019 (2018: GBP29.4m). 
   Group revenues during 2018 totalled GBP34.8m, reflecting nine months in the 
    year of operating on a wider international footprint. Direct to consumer 
       remains the dominant revenue channel, with revenues from omni-channel 
     contributing 27% of the group total (2018: 22%). Reflecting a strategic 
  focus on profitable revenues and a reduction in marketing investment, UK&I 
     revenues decreased by 18% and in France by 22% during 2019 as expected. 
 
         gross margins 
 
 Gross margins in Core Markets have remained at attractive levels, supported 
  by a focus on profitable sales. Core Markets gross profit margin increased 
         by 70bps to 53.4% in 2019 (2018: 52.7%). 
 
         distribution costs 
 
  Distribution costs as a percentage of revenue reduced by 20bps to 11.4% in 
2019 (2018: 11.6%). Core Markets profit after distribution fell by 130bps to 
     41.6% in 2019 (2018: 42.8%) reflecting increased outbound logistics and 
         warehousing costs in H2 2019. 
 
         marketing investment 
 
        Marketing is an important driver of growth in the business. In 2019, 
    marketing investment in Core Markets was reduced by 32% to GBP12.1m (2018: 
 GBP17.8m). The efficiency of marketing investment is closely monitored and is 
         an important KPI for the business. In 2019 Core Markets marketing 
efficiency, defined as marketing costs as a percentage of revenues, improved 
         by 1030 bps to 50.5% (2018: 60.8%). 
 
 In the UK&I marketing efficiency improved by 176bps to 52.3% (2018: 54.1%). 
  In France, marketing efficiency improved significantly by 3876bps to 44.1% 
         (2018: 82.9%). 
 
In addition to cash and cash equivalents, the Group had GBP0.3m of advertising 
  credits with Channel 4 available at the year-end date, following a placing 
      of shares in February 2019, which raised GBP11.7m (net of expenses) from 
investors and secured GBP0.9m in future advertising with Channel 4, which will 
        be satisfied through the issuance of new shares when fully utilised. 
 
         administrative expenses 
 
         (excluding marketing) 
 
      Wages & Salaries (excluding share-based payment charges connected with 
employee remuneration) are the largest component of administrative expenses, 
 contributing 36.2% (2018: 36.8%) of total administrative expenses excluding 
  marketing costs in the year. The cost of Wages & Salaries decreased by 18% 
           to GBP4.4m (2018: GBP5.4m) primarily reflecting a lower headcount. 
 
         underlying EBITDA loss 
 
      (earnings before interest, tax, depreciation, amortisation, impairment 
    charges, share--based payment charges relating to employee remuneration, 
   fundraise-related expenditure in 2019 and staff and country exit costs in 
         2018) 
 
   The Directors consider that they are best able to monitor Group financial 
performance via underlying EBITDA by removing fundraise-related expenditure, 
 share-based payment charges relating to employee remuneration and staff and 
   country exit costs from EBITDA on the basis that these items do not occur 
         evenly year on year. 
 
The underlying Group EBITDA loss decreased by GBP8.5m to (GBP10.7m) loss in 2019 
 (2018: (GBP19.1m) loss). The 44% reduction in the loss reflects the increased 
         focus on profitable sales, greater efficiency in marketing spend, 
    substantial overhead reductions and losses in 2018 relating to the wider 
         international footprint for part of the year. 
 
   UK&I performance for the year demonstrated improved efficiency, where the 
  loss after distribution expenses, payment fees and marketing costs (before 
   overhead allocation) totalled (GBP1.7m) loss (2018: (GBP2.5m) loss). This was 
           achieved on lower revenues down 18% to GBP18.5m (2018: GBP22.5m). 
 
 France, whilst at an earlier stage of development for eve compared to UK&I, 
   made headway in reducing losses after distribution expenses, payment fees 
     and marketing costs (before overhead allocation) by 74% to (GBP0.9m) loss 
   (2018: (GBP3.3m) loss) despite revenues falling 22% to GBP5.3m (2018: GBP6.8m). 
 
It should be noted that the application of IFRS 16 in 2019 has resulted in a 
  depreciation charge recognised in 2019 of GBP0.2m (2018: GBP0.0m); this charge 
       is excluded from underlying EBITDA. Under IAS 33 however, expenditure 
        relating to operating lease rentals (presented within administrative 
     expenses) would have totalled GBP0.2m and would have been included within 
    underlying EBITDA. In this way, GBP0.2m of the year on year improvement to 
         underlying EBITDA is attributable to the application of IFRS 16. 
 
         share-based payment 
 
     In accordance with IFRS, a share-based payment charge for 2019 has been 
  calculated and charged to the statement of profit and loss. The fair value 
 of options granted is recognised as an expense over the vesting period with 
  a corresponding credit being recognised in equity. The charge for 2019 was 
 GBP1.1m (2018: GBP0.3m) of which GBP0.6m related to equity issued in exchange for 
          marketing services and GBP0.5m relating to employee remuneration. 
 
         loss after tax 
 
The loss after tax reduced to GBP12.1m loss (2018: GBP20.1m loss) as a result of 
         the 44% reduction in the underlying EBITDA loss. 
 
         capital expenditure 
 
         Due to the Group's outsourced business model, capital expenditure 
       requirements remain low. The main area of capital expenditure in 2019 
 related to ERP systems infrastructure. Total capital expenditure in 2019 in 
        the form of intangible software assets totalled GBP0.5m (2018: GBP0.4m). 
 
         cash position 
 
     The Group had cash and cash equivalents of GBP8.0m at the year-end (2018: 
          GBP6.0m). 
 
         Tim Parfitt 
 
         Chief Financial Officer 
 
         23 March 2020 
 
         principal risks and uncertainties 
 
      Risk management is an important part of the management process for the 
  Group. Regular reviews are undertaken to assess the nature of risks faced, 
  the magnitude of the risk presented to business performance and the manner 
      in which the risk may be mitigated. Where controls are in place, their 
    adequacy is regularly monitored. The risks considered to be particularly 
         important at the current time are set out below. 
 
         marketing 
 
 Marketing is an important investment area for the Group and there is a risk 
   that this expenditure may not result in the targeted increase in sales or 
         brand awareness levels. 
 
 eve constantly monitors and analyses financial performance and key business 
       metrics to ensure up to date and accurate forecasting. The Group also 
     supplements its in-house marketing expertise with third party media and 
marketing agencies to monitor and advise on the effective implementation and 
  roll out of marketing and advertising campaigns to meet targeted KPIs with 
         especial focus on marketing efficiency. 
 
         product 
 
      The Group is responsible for the design of eve products and could face 
    exposure to product liability claims or claims against health and safety 
  procedures or practices in different territories. There could also be high 
      return rates owing to the 100-night trial offered on the eve mattress. 
 
The Group has a robust product and supplier onboarding process to ensure new 
 products and suppliers are of the highest standards. The Group also retains 
        insurance brokers to review and analyse insurance coverage to ensure 
  sufficient insurance coverage for product liability and associated losses. 
         In addition, return rates is a KPI which is monitored closely. 
 
     The Group is subject to fluctuations in the cost of materials which may 
         adversely impact on the Group's profit margins. 
 
       The Group primarily manufactures its EU mattress in the EU and its UK 
        mattress in the UK for its main product (the eve original mattress), 
creating a natural hedge against currency movement for its key products. For 
  other products and markets the Group looks to agree prices for a period of 
time with manufacturers where possible to provide a degree of certainty over 
         currency fluctuations. 
 
         operations 
 
        As the Group relies on outsourced partners, there is a risk that the 
    business may be unable to cope with rapid demand or disruption occurring 
         with its manufacturing or logistics partners. 
 
        The Group maintains a close working relationship with its outsourced 
partners and regularly reviews and communicates forecasts to ensure capacity 
         constraints are managed. In addition, the Group maintains a list of 
    alternative product suppliers who can be onboarded to supplement supply, 
         reducing the risk of relying on any specific supplier. 
 
During 2019, investment in automation across ERP infrastructure particularly 
         across supply chain and logistics functions, has delivered greater 
       visibility of logistics partner performance and mitigates the risk of 
 disruption and allows for logistics partners to easily be switched between. 
 
         competition 
 
 The Group operates in the highly competitive mattress and pillow industries 
     and may not be able to grow, or maintain, its existing marketing share. 
 
       The Group constantly reviews and analyses its performance against its 
   business plan and against market competitors. The Group has both internal 
talent and external advisors who can advise on and respond to any changes in 
         the competitive environment. 
 
         brexit 
 
 As with all UK companies involved in intra-community cross border trade the 
         impact of Brexit is a potential risk for the Group. 
 
  The board of directors and senior management regularly review developments 
  surrounding Brexit throughout the organisation and in addition to this the 
operations team has a dedicated task force focused on Brexit planning within 
   the supply and logistics chain. The Group has a natural Brexit hedge with 
its UK and French companies and its main product, the eve original mattress, 
    is manufactured in both the UK and the EU providing a hedge for its most 
         significant product. 
 
  As with most UK based companies leveraging technology to deliver its value 
  proposition, eve employs a significant non-UK workforce in the UK and thus 
      the outcome of Brexit with regards to freedom of movement will have an 
   effect on our workforce planning and recruitment. For this reason, during 
       2019, regular communication for EU nationals has been established and 
    in-house support provided for those considering applications for settled 
         status or visas. 
 
      At present the precise details of Brexit; how it relates to freedom of 
    movement between the EU and UK; how it will impact goods movement across 
     borders between the EU and UK; and how it will affect currency exchange 
      rates following the transition period (currently expected to end on 31 
     December 2020) are under negotiation and therefore not fully clarified. 
   However, the Group continuously monitors the situation to ensure it is as 
  prepared as possible for any outcome. The Group is already registered as a 
    sponsoring entity with the relevant UK authorities and also has a French 
   subsidiary, which combined with the expected transitional period provides 
  the foundations for mitigating the immediate effect of Brexit on the Group 
         in this regard. 
 
         COVID-19 virus 
 
The Group manufactures core mattress products in the territories in which it 
    sells them. However, our supply chain has some reliance on sourcing from 
 China, the Far East and European countries outside the Core Markets for the 
         wider sleep range products. 
 
   There is the risk of reduced consumer demand as well as disruption to the 
   supply chain from global events and pandemics such as the COVID-19 virus. 
 Management have assessed the availability of stock on hand and are in close 
      communication with suppliers to mitigate any adverse impact of planned 
       supply chain movements in order to fulfil consumer demand during this 
         period. 
 
 The Group's employees are able to work remotely from eve's main office as a 
   result of laptop computers and the use of multiple communication channels 
   including email, direct messaging and video conferencing. In the event of 
  restricted movement around London and the UK, the work force would be able 
   to continue working and would be able to communicate across teams and key 
         stakeholders ensuring business continuity. 
 
To date we have seen only a small impact upon our supply chain, and where we 
   have seen impact, we have taken precautionary measures including stronger 
stock holding of products to ensure adequate coverage for the coming months, 
  and hence we currently envisage being able to meet customer demand for our 
         products, albeit at reduced levels. 
 
         Approved and signed on behalf of the board. 
 
         Tim Parfitt 
 
         Chief Financial Officer 
 
         23 March 2020 
 
    consolidated statement of profit and loss and other comprehensive income 
 
         for the year ended 31 December 2019 
 
                                  Note         2019         2018 
 
                                                  GBP            GBP 
                          Revenue    3   23,852,931   34,818,260 
                    Cost of sales    3 (11,176,905) (16,442,852) 
                     Gross profit        12,676,026   18,375,408 
            Distribution expenses    3  (2,729,317)  (4,056,075) 
          Administrative expenses    3 (22,453,901) (34,663,758) 
                   Operating loss      (12,507,192) (20,344,425) 
               Net finance income            18,022       44,822 
                  Loss before tax      (12,489,170) (20,299,603) 
                         Taxation           352,240      193,192 
                Loss for the year      (12,136,930) (20,106,411) 
       Other comprehensive income 
Foreign currency differences from            17,310       98,720 
              overseas operations 
 Total comprehensive loss for the      (12,119,620) (20,007,691) 
                             year 
 Basic and diluted loss per share    4      (4.92p)     (14.46p) 
 
         consolidated statement of financial position 
 
         at 31 December 2019 
 
                                Note          2019          2018 
 
                                                 GBP             GBP 
                                              Non-current assets 
   Property, plant and                     518,575             - 
             equipment 
     Intangible assets                     344,456       669,742 
                                           863,031       669,742 
                                                  Current assets 
           Inventories                   1,574,648     1,127,876 
       Trade and other             7     2,637,650     4,626,750 
           receivables 
         Cash and cash                   7,988,769     6,031,936 
           equivalents 
Current tax receivable                     354,466       193,192 
                                        12,555,533    11,979,754 
          Total assets                  13,418,564    12,649,496 
                                         Non-current liabilities 
Lease liabilities   40,000 - 
                    40,000 - 
 
                                             Current liabilities 
       Trade and other                   3,983,174     4,561,792 
              payables 
            Provisions             8       768,965       955,949 
     Lease liabilities                     470,391             - 
                                         5,222,530     5,517,741 
     Total liabilities                   5,262,530     5,517,741 
            Net assets                   8,156,034     7,131,755 
             Equity attributable to equity holders of the parent 
         Share capital             5       263,445       139,735 
         Share premium                  48,887,392    36,716,372 
   Share-based payment             6       998,495       250,073 
               reserve 
     Retained earnings                (42,109,328)  (30,073,145) 
      Foreign currency                     116,030        98,720 
   translation reserve 
          Total equity                   8,156,034     7,131,755 
 
         consolidated statement of changes in equity 
 
         for the year ended 31 December 2019 
 
               Share    Share   Share Retained  Foreign   Total 
             Capital  Premium   based Earnings currency  Equity 
                              payment          translat       GBP 
                              reserve               ion 
                                    GBP           reserve 
                   GBP        GBP                GBP 
 
                                                      GBP 
                            For the year ended 31 December 2019 
 Balance at  139,735 36,716,3 250,073 (30,073,   98,720 7,131,7 
  1 January                72             145)               55 
       2019 
   Issue of  120,317 11,911,4       -        -        - 12,031, 
     shares                15                               732 
Exercise of      770        -       -        -        -     770 
   employee 
      share 
    options 
Share-based        -        - 1,111,3        -        - 1,111,3 
    payment                        96                        96 
     charge 
Transfer on        -        - (100,74  100,747        -       - 
exercise of                        7) 
   employee 
      share 
    options 
Transfer on    2,623  259,605 (262,22        -        -       - 
   issue of                        8) 
 equity for 
  marketing 
   services 
      Total  123,710 12,171,0 748,421  100,747        - 13,143, 
transaction                20                               898 
     s with 
     owners 
   Loss for        -        -       - (12,136,        - (12,136 
   the year                               930)            ,930) 
      Other        -        -       -        -   17,310  17,310 
comprehensi 
  ve income 
    for the 
       year 
 Balance at  263,445 48,887,3 998,495 (42,109,  116,030 8,156,0 
31 December                92             328)               34 
       2019 
 
         for the year ended 31 December 2018 
 
   Balance at 1 138,631 36,716,  138,794 (10,158      - 26,835,0 
   January 2018             372            ,736)              61 
    Exercise of   1,104       -        -       -      -    1,104 
        options 
    Share-based       -       -  303,281       -      -  303,281 
 payment charge 
    Transfer on       -       - (192,002 192,002      -        - 
    exercise of                        ) 
        options 
          Total   1,104       -  111,279 192,002      -  304,385 
   transactions 
    with owners 
   Loss for the       -       -        - (20,106      - (20,106, 
           year                            ,411)            411) 
          Other       -       -        -       - 98,720   98,720 
  comprehensive 
 income for the 
           year 
  Balance at 31 139,735 36,716,  250,073 (30,073 98,720 7,131,75 
  December 2018             372            ,145)               5 
 
         consolidated statement of cash flows 
 
         for the year ended 31 December 2019 
 
                                      2019         2018 
 
                                         GBP            GBP 
Cash flows from operating activities 
   Loss for the year          (12,136,930) (20,106,411) 
    Adjustments for: 
        Depreciation               198,048            - 
        Amortisation               263,046      120,571 
          Impairment               594,724       39,608 
    Interest payable                 9,144            - 
 (Increase)/decrease             (446,772)    (436,536) 
      in inventories 
 (Increase)/decrease             1,827,827    (642,885) 
  in trade and other 
         receivables 
 Increase/(decrease)             (578,619)       13,773 
  in trade and other 
            payables 
 Increase/(decrease)             (186,984)      129,247 
       in provisions 
 Share-based payment             1,111,396      303,281 
              charge 
    Net cash outflow           (9,345,120) (20,579,352) 
      from operating 
          activities 
 
Cash flows from investing activities 
        Additions to                     -      (3,150) 
 property, plant and 
           equipment 
        Additions to             (532,484)    (411,775) 
   intangible assets 
  Right of use asset              (15,375)            - 
initial direct costs 
   Net cash outflows             (547,859)    (414,925) 
      from investing 
          activities 
 
Cash flows from financing activities 
 Proceeds from issue            12,032,502        1,104 
    of share capital 
Repayment of capital             (200,000)            - 
  element of finance 
       lease rentals 
    Net cash inflows            11,832,502        1,104 
      from financing 
          activities 
            Net cash             1,939,523 (20,993,173) 
    inflow/(outflow) 
Cash at beginning of             6,031,936   26,926,389 
                year 
    Movement in cash             1,939,523 (20,993,173) 
  Effect of exchange                17,310       98,720 
rate fluctuations on 
           cash held 
 Cash at end of year             7,988,769    6,031,936 
 
         notes to the accounts 
 
         1. Reporting Entity 
 
 eve sleep PLC (the "Company") is a public company, domiciled and registered 
     in England in the UK. eve sleep PLC is a company limited by shares. The 
   registered number is 09261636 and the registered address at 31st December 
 2019 was 29A Kentish Town Road, London, England, NW1 8NL effective from 5th 
  August 2019. Prior to that date, the registered address of the Company was 
         128 Albert Street, London, England, NW1 7NE. 
 
         2. Accounting Policies 
 
         2.1 Basis of preparation 
 
     The Group financial statements consolidate those of the Company and its 
         subsidiaries (together referred to as the "Group"). 
 
       The Group financial statements have been prepared and approved by the 
 directors in accordance with International Financial Reporting Standards as 
 adopted by the EU ("Adopted IFRSs"). The Company has elected to prepare its 
        parent company financial statements in accordance with adopted IFRS. 
 
   The accounting policies set out below have, unless otherwise stated, been 
      applied consistently to all periods presented in these Group financial 
         statements. 
 
         This preliminary announcement is simultaneous with signed financial 
         statements on which the audit report is unqualified and unmodified. 
 
   The financial information set out above does not constitute the company's 
      statutory accounts for the years ended 31 December 2019 or 2018 but is 
derived from those accounts. Statutory accounts for 2018 have been delivered 
  to the registrar of companies, and those for 2019 will be delivered in due 
  course. The auditor has reported on those accounts; their reports were (i) 
         unqualified, (ii) did 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. 
 
         2.2 Changes in accounting policy 
 
a) New and amended Standards and Interpretations adopted by the Group and 
Company 
 
In these financial statements, the Group has changed its accounting policies 
         in the following areas: 
 
· Lease recognition 
 
    The Group has adopted the following IFRSs in these financial statements: 
 
· IFRS 16 Leases 
 
  The Company has considered the change in accounting policy associated with 
       the application of IFRS 16. The Company's lease of 128 Albert Street, 
    London, NW1 7NE terminated in line with the agreed upon lease term on 17 
 August 2019 and therefore the Company has taken advantage of the short-term 
   lease exemption for lease assets and lease liabilities where a lease term 
   ends within 12 months of the date of initial application of IFRS 16. Thus 
  the presentation of this lease as an operating lease for the twelve months 
  ending 31 December 2019 remains consistent with previous periods under IAS 
         17. 
 
 On 1 August 2019 the Company commenced a 24-month lease of 29A Kentish Town 
   Road, London, NW1 8NL. The Company has recognised a lease asset and lease 
        liability in relation to this lease from the inception of the lease. 
 
b) New and amended Standards and Interpretations mandatory for the first 
time for the financial year beginning 1 January 2019 but not currently 
relevant to the Group or Company 
 
         The following new and amended Standards and Interpretations are not 
        currently relevant to the Group or Company; however, they may have a 
         significant impact in future years: 
 
· IFRIC 23 "Uncertainty over Income Tax Treatments" 
 
· Amendment to IFRS 9: "Prepayment Features with Negative Compensation" 
 
· Amendment to IAS 28: "Investments in Associates and Joint Ventures" 
 
· Amendment to IAS 19: "Employee Benefits" 
 
· Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23 in "Annual Improvements 
2015-2017 cycle" 
 
c) New and amended Standards and Interpretations issued but not effective 
for the financial year beginning 1 January 2019 
 
 Amendments have been made to IAS 1 Presentation of Financial Statements and 
    IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors in 
   relation to the definition of material. The new definition will apply for 
       the first time in the next financial year. The amendments clarify the 
 definition of what is material to the financial statements and how to apply 
         the definition. 
 
The amendments will have an impact on the presentation and disclosure in the 
      financial statements. After applying the new definition, the financial 
     statement may have less disclosures as it may be easier to justify that 
        certain disclosures are immaterial to users of financial statements. 
         Furthermore, more meaningful disclosures may be presented in a more 
 prominent manner due to the additional guidance on the effects of obscuring 
         information. 
 
         2.3 Measurement Convention 
 
 The financial statements are prepared under the historical cost convention. 
 
         2.4 Going Concern 
 
         The financial statements are prepared on a going concern basis 
         notwithstanding that the Group is still generating losses. 
 
    The Group has reported an operating loss of GBP12.5m (2018: (GBP20.3m) loss) 
    with an operating cash outflow of GBP9.3m (2018: GBP20.6m). The closing cash 
           balance at 31 December 2019 was GBP8.0m (2018: GBP6.0m). 
 
   The directors have prepared a business plan and financial model including 
cashflow forecasts covering a period of more than 12 months from the date of 
         approval of these financial statements. 
 
         The business plan makes the following key assumptions: 
 
· Economies in product and logistics costs; 
 
· Marketing efficiency within DTC is enhanced as a result of greater brand 
awareness and the focus on more profitable performance marketing 
activities leading to a significant improvement in profit/loss after 
distribution expenses, payment fees and marketing costs. Marketing spend 
is presented within administrative expenses in the financial statements; 
 
· The full-year benefit of savings made to overheads in 2019 generating a 
significant reduction in annual fixed costs; 
 
· Improvement in the slow-moving stock levels alongside optimised demand 
planning. 
 
         These forecasts in the base case indicate that the group will have 
  sufficient funds to meet its liabilities as they fall due until such point 
that it achieves sustainable profitability and cash generation. However, the 
delivery of the strategic plan is subject to uncertainty and these have been 
 modelled through sensitivity analysis. Where sensitivity analysis indicates 
    the possibility of a material impact to the ability of the group to meet 
 liabilities as they fall due, the directors have considered what mitigating 
  actions would be required and the timeframe within which those actions are 
 needed. The key mitigating factors are centred around further reductions in 
         controllable spend, including further marketing cost appraisal and 
   reductions in other categories of discretionary spend. The directors also 
 consider that it would be reasonable to target working capital improvements 
  such as reducing stock days through lower stock levels and reducing debtor 
        days through facilities such as debt factoring as the group does not 
   presently have any debt (excluding the lease liability arising under IFRS 
         16). 
 
    Uncertainties are such that potential mitigating actions, which would be 
over and above the current strategic plan, may not be sufficient to mitigate 
    all reasonably possible downsides in assumptions. The impact of COVID-19 
   virus is one such uncertainty which management are assessing and managing 
the impact of on the business (further detail on this is provided within the 
 principal risks and uncertainties section of the strategic report). In such 
  downsides the Directors would need further funding and would consider ways 
       of sourcing this, which could include debt or possible further equity 
   funding. The Directors consider that such scenarios are possible, but not 
         the likely outcome. 
 
 Based on the above, the directors believe it remains appropriate to prepare 
         the financial statements on a going concern basis. However, these 
    circumstances represent a material uncertainty that may cast significant 
        doubt upon the company's ability to continue as a going concern and, 
  therefore to continue realising its assets and discharging its liabilities 
   in the normal course of business. The financial statements do not include 
       any adjustments that would result from the basis of preparation being 
         inappropriate. 
 
         3 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 Board). The Chief Operating Decision Maker has been determined to 
    be the executive board and the primary segmental reporting format of the 
 Group is geographical by customer location, based on the Group's management 
         and internal reporting structure. 
 
  The board assesses the performance of each segment based on revenue, gross 
   profit and profit after distribution expenses, payment fees and marketing 
         expenses. Payment fees and marketing expenses are presented within 
       administrative expenses on the statement of profit and loss and other 
         comprehensive income. 
 
For the year          UK&I    France  Rest of  Rest of     Total 
ended 31                               Europe      the 
December 2019                                    World 
 
Revenue         18,548,073 5,345,076 (45,141)    4,923 23,852,93 
                                                               1 
Cost of Sales  (8,385,865) (2,751,45        - (39,587) (11,176,9 
                                  3)                         05) 
Gross Profit    10,162,208 2,593,623 (45,141) (34,664) 12,676,02 
                                                               6 
Distribution   (1,809,692) (1,014,77   94,185      964 (2,729,31 
expenses                          4)                          7) 
Payment fees     (352,702)  (90,180)    5,418      245 (437,219) 
Marketing      (9,703,321) (2,357,40    6,346        - (12,054,3 
expenses                          3)                         77) 
Segment        (1,703,507) (868,734)   60,808 (33,454) (2,544,88 
results                                                       7) 
Administration                                         (9,962,30 
expenses                                                      5) 
(excluding 
payment fees 
and marketing 
expenses) 
Net finance                                               18,022 
income 
Taxation                                                 352,240 
Loss for the                                           (12,136,9 
year                                                         30) 
 
For the year          UK&I    France  Rest of  Rest of     Total 
ended 31                               Europe      the 
December 2018                                    World 
 
Revenue         22,520,896 6,833,520 4,744,69  719,148 34,818,26 
                                            6                  0 
Cost of Sales  (10,703,472 (3,174,41 (2,197,3 (367,663 (16,442,8 
                         )        4)      03)        )       52) 
Gross Profit    11,817,424 3,659,106 2,547,39  351,485 18,375,40 
                                            3                  8 
Distribution   (1,697,775) (1,204,14 (1,079,0 (75,150) (4,056,07 
expenses                          0)      10)                 5) 
Payment fees     (403,616) (137,270) (166,366 (29,206) (736,458) 
                                            ) 
Marketing      (12,178,634 (5,662,66 (4,200,1 (126,294 (22,167,7 
expenses                 )        4)      50)        )       42) 
Segment        (2,462,601) (3,344,96 (2,898,1  120,835 (8,584,86 
results                           8)      33)                 7) 
Administration                                         (11,759,5 
expenses                                                     58) 
(excluding 
payment fees 
and marketing 
expenses) 
Net finance                                               44,822 
income 
Taxation                                                 193,192 
Loss for the                                           (20,106,4 
year                                                         11) 
 
      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. 
 
         4 Earnings per share 
 
       The basic earnings per share is calculated by dividing the net profit 
  attributable to equity holders of the Group by the weighted average number 
         of ordinary shares in issue during the year. 
 
                                               2019         2018 
      Weighted average shares in issue  246,739,240  139,087,779 
Loss attributable to the owners of the (12,136,930) (20,106,411) 
                        parent company 
          Basic loss per share (pence)       (4.92)      (14.46) 
        Diluted loss per share (pence)       (4.92)      (14.46) 
 
   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 31 December 2019, options outstanding amounted to 17,030,913. Given the 
 loss for the year of GBP12,136,930 (2018 loss: GBP20,106,411) these options are 
         anti-dilutive. 
 
         5 Share Capital 
 
         Allotted, issued and fully paid: 
 
                     Number  Nominal Value         31         31 
                                         GBP   December   December 
                                               2019 GBP     2018 GBP 
Ordinary Shares 263,444,823         GBP0.001    263,445    139,735 
          Total                               263,445    139,735 
 
         The table below summarises the movements in number of shares at the 
         beginning and end of the period: 
 
                                               Ordinary Shares 
 
                Share capital 31 December 2018     139,735,161 
                               Nominal Value GBP          GBP0.001 
                      Value of Share capital GBP        GBP139,735 
 
                          Summary of Movements 
                               Issue of shares     122,939,599 
Exercise of share options over ordinary shares         770,063 
 
                Share capital 31 December 2019     263,444,823 
                               Nominal Value GBP          GBP0.001 
                      Value of Share capital GBP        GBP263,445 
 
The holders of Ordinary shares are entitled to receive dividends as declared 
 from time to time and are entitled to one vote per share at meetings of the 
         Company. 
 
  During 2019, 122,939,599 shares were issued and 770,063 share options were 
 exercised bringing the total share capital of the Company to 263,444,823 at 
         31 December 2019. 
 
         6 Share based payments 
 
 The Group recognised a charge of GBP1.1m (2018: GBP0.3m) related to share-based 
       payments during the year to 31 December 2019, all of which relates to 
    equity-settled schemes and are presented within administrative expenses. 
 
        The charge is made up of two components: share-based payment charges 
       connected with employee remuneration totalling GBP0.5m and, share-based 
     payment charges relating to the equity settlement of liabilities due to 
  Channel 4 totalling GBP0.6m, of which GBP0.3m were satisfied with the issue of 
    share capital during the period. At 31 December 2019, the Group benefits 
         from GBP0.3m in available marketing credits with Channel 4 for future 
         marketing expenditure. 
 
The Company issues equity-settled share-based payments to certain employees, 
     whereby employees render services in exchange for shares or rights over 
    shares of the parent company. Equity-settled awards are measured at fair 
         value at the date of grant. The fair value is calculated using an 
        appropriate option pricing model and is expensed to the consolidated 
      statement of profit and loss on a straight-line basis over the vesting 
  period after allowing for an estimate of shares that will ultimately vest. 
 
   The Company operates an HMRC approved executive management incentive plan 
 (EMI). The vesting conditions are based on length of service with typically 
      25% of the options vesting on or after the 12-month anniversary of the 
    employee's start after which vesting occurs in equal monthly tranches so 
     that options vest in full on the 48-month anniversary of the employee's 
         start date. All options are equity settled. 
 
         The terms and conditions of the grants are as follows: 
 
Grant Date Number of   Number Exercise   Performance Expiry Date 
                           of             Conditions 
                      Options 
 
           Contracts             Price 
16/01/2017        13 14,017,8   GBP0.001     Length of  16/01/2027 
                           97                service 
16/01/2017         3 4,653,84   GBP0.001   Performance  16/01/2027 
                            1                  Based 
23/01/2017         3   56,626   GBP0.001     Length of  23/01/2027 
                                             service 
25/01/2017        22 1,289,23   GBP0.001     Length of  25/01/2027 
                            6                service 
20/02/2017         1   18,825   GBP0.001     Length of  20/02/2027 
                                             service 
10/04/2017         1  251,000   GBP0.001     Length of  10/04/2027 
                                             service 
12/05/2017        18 2,222,73  GBP1.0120     Length of  12/05/2027 
                            1                service 
01/04/2019        15 7,004,81   GBP0.001     Length of  01/04/2029 
                            4                service 
23/05/2019         1 4,400,00   GBP0.001     Length of  23/05/2029 
                            0                service 
17/12/2019         4 6,850,00   GBP0.001     Length of  17/12/2029 
                            0                service 
 
    The Company operates an unapproved executive incentive plan. The vesting 
      conditions for grants made on 12 May 2017 and during 2018 are based on 
  length of service with 100% of the options vesting on 36-month anniversary 
 of the employee's start date. The remaining options have vesting conditions 
  based on length of service with typically 25% of the options vesting on or 
     after the 12-month anniversary of the employee's start date after which 
vesting occurs in equal monthly tranches so that options vest in full on the 
   48-month anniversary of the employee's start date. All options are equity 
         settled. 
 
         The terms and conditions of the grants are as follows: 
 
Grant Date Number of   Number Exercise   Performance Expiry Date 
                           of             Conditions 
                      Options 
 
           Contracts             Price 
13/07/2015         1  132,905   GBP0.001     Length of  13/07/2025 
                                             service 
01/01/2016         1   49,447   GBP0.001     Length of  01/01/2026 
                                             service 
01/02/2016         1  224,269   GBP0.001     Length of  01/02/2026 
                                             service 
26/01/2016         1   12,550   GBP0.001     Length of  26/01/2026 
                                             service 
12/05/2017         6  991,798   GBP1.012     Length of  12/05/2027 
                                             service 
12/10/2017         1   23,939   GBP0.001     Length of  12/10/2027 
                                             service 
20/10/2017         1   23,833   GBP0.001     Length of  20/10/2027 
                                             service 
16/01/2018         1   20,000    GBP1.01     Length of  16/01/2028 
                                             service 
17/01/2018         1  100,000    GBP1.01     Length of  17/01/2028 
                                             service 
02/02/2018         1   15,000    GBP1.01     Length of  02/02/2028 
                                             service 
05/02/2018         1   87,500    GBP1.01     Length of  05/02/2028 
                                             service 
11/02/2018         1   20,000    GBP1.01     Length of  11/02/2028 
                                             service 
01/04/2019         2  531,600   GBP0.001     Length of  01/04/2029 
                                             service 
 
     The number and weighted average exercise prices of share options are as 
         follows: 
 
                              Weighted Average Number of Options 
                              Exercise Price GBP 
Outstanding at beginning                GBP0.613         3,203,153 
of year 
Granted during the year                 GBP0.001        18,786,413 
Forfeited during the                    GBP0.179       (2,531,217) 
year 
Exercised during the                    GBP0.001         (770,063) 
year 
Lapsed during the year                  GBP0.001         (165,687) 
Cancelled during the                    GBP1.012       (1,491,686) 
year 
Outstanding at the end                  GBP0.001        17,030,913 
of the year 
Exercisable at the end                  GBP0.001         3,166,892 
of the year 
 
    All options exercised during the year were options over Ordinary shares. 
 
   The weighted average share price at the date of exercise of share options 
         exercised during the year was 6.37p (2018: 80.03p) 
 
The options outstanding at the end of the year have an exercise price in the 
        range of GBP0.001 and a weighted average contractual life of 10 years. 
 
  The fair value of employee share options is measured using a Black-Scholes 
   model. Measurement inputs and assumptions for those share options granted 
         during 2019 are as follows: 
 
                           Award    Award    Award 
 
                        01/04/19 23/05/19 17/12/19 
                               GBP        GBP        GBP 
            Share class      Ord      Ord      Ord 
             Fair Value    GBP0.07    GBP0.06    GBP0.02 
 
         Exercise Price   GBP0.001   GBP0.001   GBP0.001 
Expected volatility [5]      82%      83%      84% 
            Option Life    10yrs    10yrs    10yrs 
Risk free interest rate   1.000%   1.000%   1.000% 
 
         7 Trade and other receivables 
 
                          2019      2018 
 
                             GBP         GBP 
   Trade Receivables   676,537 1,815,260 
   Other receivables   447,051 1,124,112 
         Prepayments   784,083 1,320,555 
Other current assets   729,979   366,823 
                     2,637,650 4,626,750 
 
 The average credit period offered on sales of goods during 2019 was 32 days 
(2018: 27 days). The average days sales outstanding ("DSO") in 2019 was 38 
   days (2018: 82 days). At 31 December 2019, trade receivables at a nominal 
       value of GBP3,481 (2018: GBP35,681) were impaired and fully provided for. 
 
 All trade and other receivables are short-term. The directors consider that 
  the carrying amount of trade receivables approximates to their fair value. 
       All trade and other receivables have been reviewed for indications of 
         impairment. 
 
Trade receivables represent amounts due from wholesale and retail customers. 
 
      The Group has not charged interest for late payment of invoices in the 
         current year or prior period. 
 
    Allowances against doubtful debts are estimated by reference to expected 
       credit losses based on the probability of default (using past default 
  experience with that customer and alongside analysis of the counterparty's 
       current financial position where specific credit risk is known), risk 
exposure (being the value of receivables outstanding with that customer) and 
         finally a percentage representative of the loss due to default. 
 
  Before accepting any significant new customer, the Group uses a variety of 
credit scoring systems to assess the potential customer's credit quality and 
 to define credit limits for each customer. Limits and scoring attributed to 
         customers are reviewed regularly. 
 
   Four major retail customers each accounted for more than 10% of the total 
     balance of trade receivables on 31 December 2019, an increase from 2018 
  where three major retail customers each accounted for more than 10% of the 
         total balance of trade receivables on 31 December 2018. 
 
                              2019      2018 
 
                                 GBP         GBP 
               Not overdue 277,934 1,177,698 
 Overdue between 0-30 days  21,493   382,274 
Overdue between 31-60 days 245,198    56,070 
Overdue between 61-90 days 131,912    73,634 
      Overdue over 90 days       -   125,584 
                           676,537 1,815,260 
 
 In determining the recoverability of a trade receivable the Group considers 
      any change in the credit quality of the trade receivable from the date 
    credit was initially granted up to the relevant year-end. Aside from the 
 major retail customers accounting for the year-end trade receivable balance 
     mentioned above, the concentration of credit risk is limited due to the 
         customer base being large and diverse. 
 
         8 Provisions 
 
                                   Refunds Warranty        Total 
 
                                         GBP        GBP            GBP 
    Balance at 1 January 2018      826,702        -      826,702 
   Provisions made during the   11,647,815  163,832   11,811,647 
                         year 
   Provisions used during the (11,620,290)        - (11,620,290) 
                         year 
      Prior year under/(over)     (62,110)        -     (62,110) 
 provision recognised in year 
  Balance at 31 December 2018      792,117  163,832      955,949 
   Provisions made during the    7,869,078   73,574    7,942,652 
                         year 
   Provisions used during the  (8,116,237) (36,127)  (8,152,364) 
                         year 
      Prior year under/(over)       22,728        -       22,728 
 provision recognised in year 
  Balance at 31 December 2019      567,686  201,279      768,965 
 
    A refund provision is required as the Group provides certain products to 
         customers under a 100-day trial period. 
 
      During this period the customer is entitled to return goods for a full 
     refund. The provision is calculated by reference to the rate of returns 
experienced by the Group in preceding periods and the level of sales subject 
  to the relevant trial periods of each product at the year end. An analysis 
         of the rate of return over historical periods does not indicate a 
      significant variation in the rate of refunds provided to customers and 
   accordingly, whilst there is a degree of estimation in the calculation of 
  this provision, any reasonable sensitivity analysis in the rate applied to 
         sales at the year-end would not result in a material impact. 
 
         9 Subsequent events 
 
 The worldwide outbreak of the COVID-19 virus represents a significant event 
  since the end of the financial period. In light of the impact of the virus 
 upon supply chain and consumer demand, the Group has reviewed its cash flow 
   forecasts and considered the impact on going concern, concluding that the 
   going concern basis remains an appropriate basis of preparation for these 
     financial statements given the likely cash flow impact of operations 12 
   months from the date of signing this report. Please refer to note 2.4 for 
         further detail on the Group's going concern basis of preparation. 
 
   COVID-19 is considered to be a non-adjusting post balance sheet event and 
     therefore has not been taken into account in preparing the statement of 
         financial position as at 31 December 2019. 
 
=--------------------------------------------------------------------------- 
 
[1] Underlying EBITDA is calculated as earnings before interest, taxation, 
depreciation, amortisation, impairment, share-based payment charges 
connected with employee remuneration, fundraise-related expenditure (2019 
only) and staff and country exit costs (2018 only). It should be noted that 
the application of IFRS 16 in 2019 has resulted in a depreciation charge 
recognised in 2019 of GBP0.2m (2018: GBP0.0m); this charge is excluded from 
underlying EBITDA. Under IAS 17 however, expenditure relating to operating 
lease rentals (presented within administrative expenses) would have totalled 
GBP0.2m and would have been included within underlying EBITDA. In this way, 
GBP0.2m of the year on year improvement to underlying EBITDA is attributable 
to the application of IFRS 16. 
 
[2] Marketing contribution is defined as the profit after marketing 
expenditure but before payroll and overhead costs. 
 
[3] Definitions of Financial and Operational KPIs, see Glossary 
 
[4] In 2019, management modified the classification of marketing expenditure 
to include both direct and indirect costs of marketing, whereas in 2018 only 
direct costs of marketing were included as marketing expenditure. Indirect 
marketing costs include PR and the production costs of creating advertising 
assets such as the Sloth campaign in 2019. This has resulted in the 
restatement of marketing costs and marketing efficiency metrics for 2018. 
The impact of this restatement solely impacts management information (direct 
and indirect marketing costs being included in administrative expenses in 
both the current and prior period) and therefore there is no impact of the 
restatement on the statutory statement of profit and loss and other 
comprehensive income. In 2019, marketing costs include a GBP0.6m share-based 
payment charge relating to equity issued to Channel Four in exchange for 
marketing services (2018: GBPnil). 
 
[5] Expected volatility is measured at the standard deviation of expected 
share price movements and based on a review of volatility used by listed 
companies of comparable industry sector and years of establishment. 
 
ISIN:          GB00BYWMFT51 
Category Code: FR 
TIDM:          EVE 
LEI Code:      2138007BAC29AUXWQE6 
Sequence No.:  54124 
EQS News ID:   1004847 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

March 24, 2020 03:00 ET (07:00 GMT)

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