Eve Sleep shares soar as group posts strong revenue
Shares in mattress maker Eve Sleep hiked as much as 45 per cent this morning as the group posted revenue ahead of expectations, after a spike in sales during lockdown.
Eve reported group revenue of £12.2m for the six months to 30 June, as sales smashed expectations, buoyed by strong e-commerce sales and increased demand for homeware products as Brits stayed home during the pandemic.
Shares rose as much as 45 per cent at market open this morning, before settling at 33.3 per cent up to 2.3p at 8.15am.
The British firm nodded towards strong sales of premium mattresses and bedframes for its better-than-expected half-year results, supported by wider sales across pillows and duvets.
Revenue dipped 9.5 per cent compared to the same period last year, however Eve said a year-on-year reduction in revenues was budgeted for to prioritise profitable sales over chasing top-line growth.
The Woodford-backed group halved its marketing costs over the period, in a bid to shore up its balance sheet ahead of the footfall drought during the pandemic. Eve subsequently shaved down its earnings before tax loss by 80 per cent to £1.2m, down from £5.9m last year.
The mattress company maintained a positive cash flow for the six month period, with the cash balance increasing by approximately £1.1m as at 30 June, after tax cuts handed out by the chancellor to weather the coronavirus crisis.
However, Eve did not update its full-year trading expectations, citing “a backdrop of ongoing economic uncertainty” for the next six months.
It comes after the group scrapped merger talks with rival Simba Sleep in September last year, after a challenging sales period and a boardroom overhaul.
Cheryl Calverley, chief executive of Eve Sleep, said: “Trading through this complex period has been robust and ahead of our previous expectations, and for the first time we have generated positive cash flow over a sustained period.”
“These achievements have only been made possible by our experienced and highly capable team who have shown remarkable resilience, engagement and commitment throughout.
Calverley added: “We are well placed to benefit from the accelerated shift to online ordering and the increase in spend on homewares as consumers increase investment in their homes. Eve will continue to focus on driving value for our shareholders and building a sustainably profitable business with strong growth potential.”