Member Info for Aimtrader1

Can you explain the 80% revenue growth?

Thanks D-Geeman. I might have a punt if the SP drops back to cash levels or below. I really dont know if that will happen or not but that's how I'd value it right now. I dont think anyone on here is clear on the path to profitably. Lots and lots of ramping but no substance. By how much would sales need to grow at current margins to breakeven? If a product mix shift/ higher margins is the answer in getting to breakeven how realistic is that / what are the products? We're coming out of lockdown now and the high st will bounce back. The upward struggle will only increase. Hopefully I'm wrong.

It could range 4-5p for a period before eventually dropping inline with cash holding. That's how I see it playing out and certainly haven't upgraded my projections here. Genuinely I just dont think the business model works and I think that's now becoming apparent (Casper a good example). The only way out long term here is consolidation. Its really unfortunate because the team here seem excellent.

Yes - big transaction from Tim P, he must be really confident ;)

My assumption is that it's just the new Chairman buying up a position. We'll hear about this through an RNS in the coming days. If it wasn't for this purchase the SP would likely be closer to 4p by now. I see things sliding back into a 4-5p range once this transaction completes.

Sorry to say but yes it will be sat in the 4-5p range until we find out whether profitability is possible. This small uptick will be the chairman buying and we'll see an RNS in the coming days.

Don't kid yourself people - this is just the new chairman buying up a position. Depending on the size could see it test 6p short term before rapidly dropping back into a 4-5p range.

it will continue to drift backwards and then track cash holding (3-4p currently) until they can demonstrate that profitability is possible. I personally think 50/50 is very generous in terms of the prospects of this happening once retail reopens.

Jubber - sounds like a complete gamble but good luck to you. He who dares!!

I think it depends who was acquiring them. A straight merge with the likes of Simba (or equivalent) wouldn't deliver huge savings. OK there would be one office, a slightly reduced headcount but the per unit cost (of the mattress) and marketing CPA's would be broadly similar. The new enlarged group would likely still be loss making in a post lockdown World.

* Should read if they increased prices

Scouse - Tim P makes reference in the FY results presentation that they could make a profit now if they a) increased costs b) turned off the taps on some of the brand advertising and 3) reduced head office costs. He said that this wouldn't be sustainable though. Do not confuse this with 'they're profitable but choosing to invest in growth'. They are not profitable are someway off that unfortunately. D - fair comment are the previous regime. Not sure I agree that moving the right side of breakeven with a few £m in the bank would see a big SP rise here. But let's see. I think the best outcome here is consolidation by a bigger player but likely only if the price drops back closer to cash holding.

This is an interesting business but remains over valued at the current price. We know from the house broker that cash will drop to 4-5m by year end and then they'll continue to burn cash through into H2 2022. We should therefore be valuing this based on cash levels dropping close to zero before they turn profitable. This is not the first time they've put a date out on turning profitable (originally Jas was saying 2019) and so there is clearly big risk. Even if they make it then I think we'll be talking about a business generating low single digit £m and so the current market cap would be about right. If you assume their chances of making it are say 50/50 then I think a valuation at close to cash holding is about right for now (3p). I'm interested to see how the business performs after lockdown but on the sidelines for now at these levels.

Realistically this now drops back into a 4-5p range until something fundamentally changes (good or bad). This feels very unlikely in the short term. Anyone that says otherwise is just ramping and without substance. The only possible chance of this spiking back to 7-8p is if the Twitter teams come out to play again and convince people that selling a few bottles of CBD oil is a bigger play than it really is. Sorry to sound negative but some of the comments here are ridiculous. In terms of where the price goes more longer term I think we need to see how they perform post lockdown as retail reopens.

D - I don't know enough about the business to have a strong view sorry. Looking from outside in though it looks a v competitive area full primarily of loss making companies. Usually what we see in these examples is only a small number will win (usually those with the deepest pockets). The Fincap projections would suggest Eve don't have access to huge resources which could make things difficult for them. But if the business is well run and thinks outside of the box then maybe it has a chance. Agree 100% with you that you'd take a profitable business with less cash rather than the other way around.

Fincap are saying cash will drop to £4.4m by the end of this year. By the time they get to profitability in H2 2022 then presumably cash will drop still further. You need to be valuing this based on the business having close to zero cash at the point it turns profitable.

FinCap state as below - in summary they're saying losses increase to -2.8m and net cash drops to £4.4m by year end.

Overall, we currently anticipate an increase in LBITDA in 2021 from -£1.8m to -£2.8m.
While we are not yet publishing a 2022 forecast, we expect the year to benefit from the
2021 investment initiatives as the group moves towards its break-even target and into
profitability.
Further revenue growth is anticipated as a result of the marketing spend increase in
France, the expansion into new territories and further leverage of the brand in the UK.
We also anticipate an improvement in gross margin driven by economies of scale, price
increases and the introduction of higher-margin new products.
Our current Y/E December 2021 cash projection of £4.4m reflects the forecast trading
losses, payment of deferred tax from 2020 and an increase in the working capital requirement to fund revenue growth.