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To be honest, I can't remember Amazon's book prices. They were definitely more convenient; quicker and to the door. Eve is convenient now..
Looking through rose tinted spectacles I can see Eve selling a lot of sleep products even if not their alarm clock, which I can no longer locate.
Good point about Amazon starting as a book seller, but why were Amazon successful? It was because they sold the same product cheaper than rival book outlets. That business model was so successful they then rolled it out to include other products. That is where the analogy with EVE imo falls down.
They do do a lot of furniture but mainly bed frames of course, along with bedding / sheets / pillows and pillow cases. Amazon started off mainly being a book seller didn't it? That would be nice!
When I mentioned Brentford Nylons, I was thinking of their sheets and not the nylon shirts. Yuk.
Hi DG, I understand your point but while all revenue streams are important, EVE is about the Mattress. If you don't buy the mattress you are unlikely to buy the accessories. Widening the range to what? Furniture? Curtains? Lighting?
One of the problems with the business model is its lack of diversity. Its not just any old bed Mattress its an EVE memory foam mattress of which you pay a premium for and then after a 100 days (or is it 200 now?) you can return it. Its the Mattress that is the USP. If the Mattress at any time, does not live up to its billing then the company won't survive, as can be seem by some of its rivals. That's the reasons the SP is as low as it is I'm afraid.
Hi wyndrum,
Would agree with everything you say but would add that Eve is selling a lot more than 'just' mattresses these days. I won't spend time looking now but wasn't it something like 25% (and increasing) turnover comes from 'other' things. They can presumably sell a lot more of those things and widen their range, so compete with off-line stores there too; off-line will probably be subdued for the foreseeable. Showing my age but perhaps they could aim to be an upmarket 'Brentford Nylons' of the 2020s and beyond?
Well spotted! Thanks Firex. I suspect Peel Hunt acquired the shares on the cheap @.08p - 1p for Woodford escape and gradually over the past weeks sold for a modest but decent short-term return. This shareholder structure is pretty good for any interested acquisition or merger. https://investor.evesleep.co.uk/aim-rule
Its maybe why the SP has been suppressed if they have been off loading.
And Jupiter as well
It looks like Peel Hunt are out, according to their share holders list on the website.
Good points, Compound.
The company has gone from being vastly overvalued ... to now vastly UNDERVALUED.
Agree more work to be done to improve Eve's visibility. Good progress, and hopefully this will bring more investors in - already has. Perhaps people fed up with Oil companies that have no assets, make barely any revenue and get 'placed' every few months.
Rome wasn't built in a day.
Cash burn 100k per month from the days of losing millions per month is a significant direction and path to profitability. IMO the market is dislocated considering share price was 50x this level not long ago. Just proves they are starting to do the right thing with marketing. National TV adverts are working successfully with sloth dance... I think they should continue. to build on that great idea and tweak it here and there rather than reinvent the wheel.
Seems they need to do more on with Amazon promotions (Emma, Casper and Simba dominating), Google SEO, and get listed on John Lewis for credibility as next step up to generate higher returns. Hopefully gone are the days of wasteful advertising on London tubes etc.
IMO, I would offer caution to any expected quick gains after this RNS. Its basically a holding statement. The best news was that there was no bad news which has stabilised the SP. Certainly it was not as bullish as I had hoped on the sales front and indeed , it sounded to me as though sales are expected to decline a bit when stores open again next month.
To go forwards from here it needs to show growth, not just a controlling of overheads and reduced losses. Further, there is a reason why other similar mattress business models are leaving the market. (And its not because EVE is squeezing them out.) Clearly this is a difficult model to make money from. The cost of marketing is greater than the profit of the product. So either margins have to rise (which might be possible but it is not a cheap mattress at present), or growth comes through the benefits of the product via word of mouth. That's a much slower process. My conclusion is that whatever the outcome, short of a take over and why would any company do that right now, is that there is not much chance of significant further SP gains until the business model is proven to generate reasonable profit
Agreed - and following this RNS any acquisition will be way above current levels as they have 7.5 million in cash and the potential to turn a profit this year/next.
Would need to be a chunky offer to make management go for it......
With Woodford gone... any serious interest will turn this share around.
Cash in the bank two times MC
I can see 2p coming up here, the company is being managed very well.
I think a big reason for buying this share is the leadership team who I have been impressed with.
Highlights
Group revenues in-line with expectations, including good trading in May
Positive marketing contribution for the Period, representing profit after all direct costs including marketing but before central overheads
Cash burn in the Period averaged £0.1m per month
Net cash at 30 April 2020 of £7.5m (31 December 2019: £8.0m)
Legacy Woodford shareholding cleared1