Eve Sleep plc: Results of new CEO business review, trading update and planned fundraising (746157)
November 15 2018 - 1:02AM
UK Regulatory
Dow Jones received a payment from EQS/DGAP to publish this press
release.
Eve Sleep plc (EVE)
Eve Sleep plc: Results of new CEO business review, trading update and
planned fundraising
15-Nov-2018 / 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.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014.
eve Sleep plc
("eve", "Company" or the "Group")
Results of new CEO business review, trading update and planned fundraising
eve Sleep plc, the European sleep brand, provides the following update as
part of a refocused strategy to drive long term, sustainable growth.
Business review
Following his appointment as Chief Executive Officer of the Company from 10
September 2018, James Sturrock has, with the Board, carried out a detailed
review of the business. The updated strategy refocuses on the core sleep
markets of the UK and Ireland ("UK&I") and France, which collectively are
worth some GBP6bn per annum. The review concentrated on the transformation of
eve into an ecommerce business model that builds a deeper repeat
relationship with customers through a broader product range and stronger
customer experience in order to drive a healthy customer life time value.
The strategy will focus on the three core pillars of:
· Differentiated brand positioning;
· Expanded product range; and
· Lower friction customer experience.
The eve brand remains strong, awareness continues to grow and eve is now the
fifth most well-known mattress brand in the UK. The Company plans to
continue to build the brand in its chosen markets. An important element of
this is the appointment of a new Chief Marketing Officer, who joins at the
end of the year. This appointment will be targeted at building a strategy
that optimises marketing effectiveness. This will be achieved with a lower
investment level, concentrating on partnerships, PR and digital marketing,
as well as building repeat orders, whilst continuing to build awareness and
competitive differentiation.
To date the broadening of the product range has proved successful, with
sales of non-mattress products reaching 17% of total Group revenues in the
first six months of 2018. The plan is to more than double the product range
in 2019, which will drive further opportunities to cross sell and increase
the proportion of repeat orders. The enhanced range is also expected to
reinforce the marketing initiatives to drive traffic growth.
On top of this marketing optimisation, there are also opportunities to
improve website conversion rate. Work is already underway to enhance the
search, discovery and checkout processes on the website and improve delivery
options.
Trading update
With 6 weeks of trading remaining for the current financial year the Company
now anticipates it will deliver revenues in line or above revised full year
expectations, helped by the early success of the Dreams partnership, and
early signs of conversion improvements from projects realised in Q4.
As part of the business review the Company has also re-evaluated its 2019
financial year expectations based on the new strategy. 2019 will shift to
building capabilities in customer experience and product range, whilst
optimising marketing investment. As such, whilst this work is underway,
underlying revenues in the Group are now anticipated to finish below
existing guidance, albeit with growth still expected to be strong in the
context of the market.
Planned Fundraising
To enable the Company to implement these plans, on top of the circa GBP7m of
existing net cash as at 31 October 2018, the Board plans to raise
approximately GBP15m of new equity to fund the Company's refocused strategy
through to profitability. This investment will allow increased focus on
website customer experience, enhancing the delivery proposition and
significantly developing the Company's product range. The Company has
already received material levels of support for the planned fundraise from
certain existing shareholders at a price that is significantly higher than
the prevailing share price.
The planned fundraise is expected to be launched prior to the end of 2018
and a further announcement will be made in due course.
Commenting, James Sturrock, CEO of eve Sleep, said:
"The business review has reaffirmed my initial confidence in the size of the
opportunity in the sleep market and eve's ability to realise it. It will
however require further investment than originally expected.
"Our planned strategic investments will drive growth through expanding and
developing our highly complementary product range and enhancing the overall
customer experience and proposition, which will all serve to further
strengthen our differentiated brand positioning.
"While we have revised our short term growth ambitions during this period of
consolidation and investment, we anticipate a marked improvement moving into
2020 and beyond. eve has an exciting future ahead and we look forward to
putting the business on a stronger footing and establishing eve as Europe's
leading sleep and well-being brand."
Enquiries:
eve Sleep plc via Instinctif Partners
James Sturrock, Chief Executive Officer
Abid Ismail, Chief Financial Officer
Peel Hunt LLP (NOMAD and broker) +44 (0) 20 7418 8900
Dan Webster
George Sellar
Guy Pengelley
Instinctif Partners +44 (0) 20 7457 2020
Guy Scarborough
The person arranging release of this announcement on behalf of the Company
is Abid Ismail, Chief Financial Officer.
ISIN: GB00BYWMFT51
Category Code: TST
TIDM: EVE
LEI Code: 2138007BAC29AUXWQE6
OAM Categories: 3.1. Additional regulated information required to be
disclosed under the laws of a Member State
Sequence No.: 6549
EQS News ID: 746157
End of Announcement EQS News Service
(END) Dow Jones Newswires
November 15, 2018 02:02 ET (07:02 GMT)
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