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Eve must be facing some stiff headwind. FY21 accounts released 2 months ago and no flag from auditors re going concern. In fact this is from the accounts "cash outflow of £0.7m £4.5m closing net cash balance is sufficient to execute the business plan for 2022". What puzzles me is the accounts talk about YE 22 being the year to create a sustainable business and then this in June "cognisant of current trading conditions, the Board now wishes to accelerate eve’s push into the wider sleep wellness space. In order to deliver our objective of creating the first digital sleep wellness retailer" I don't think the messaging is particularly clear. Are they struggling to pay the bills or are they simply giving up on current business plan and selling out to highest bidder.

DGU. Spectacularly bad advice.

3 key dates gEnd of July for next trading update. End of September for the year to June unaudited accounts. End of April 23 for the year to 31 Dec 22 accounts.

I haven't read the Times piece. Eve will be looking to extract as much value as they can from any share sale and their advisors will bring this up in discussions. I dont think it is as easy to access the losses as you do. I'm not saying the next buyer won't ever use the losses I just think they won't use them any time soon so why would a buyer outlay cash buying them. If you were to put a value on the losses 46m*25%=11.5m. Then you need to think about when this will turn into positive cash flow for the buyer (by reducing future tax bill). So what do you think say DFS would Pay? And I will say there is not a deferred tax asset to recognise these losses on the balance sheet which I don't think helps the case at all.

Dgman regarding your question on %. If more than 50% of the share capital changes hands then there is a change in ownership. I think it's within a 2 year time frame

DGman it could be possible. There is also some anti avoidance around scaling up activities after an acquisition that might prevent you using the losses acquired. My take is this. The first barrier to selling them is the anti avoidance which is intended to catch situations where a company changes hands to take advantage of tax losses. Genuine commercial transactions do pass the test. If they were buying eve for the mattress business that is a favourable factor. But I think there is a high risk of not being able to use the losses if they did what you suggest and move the income streams from other businesses into this company I think it would be caught by the anti avoidance rules. A seller of a company will always ask for value for the tax losses. But the buyer will only consider giving some if they can earn the losses out. Currently eve is making more losses, they haven't recognised a deferred tax asset for the losses which means they don't think that in the next 1-3 years there is a good chance they will make taxable income to offset these losses(and the auditor agress). You also don't know how much tax losses there are because they haven't been recognised on the balance sheet . The tax loss won't equal accounting loss (which is what you see accumulated on the equity line). The loss you see in equity will have all sorts of things that the tax loss won't take account of such as impairments and depreciation. I haven't taken a look back to see how much of these have gone through the p&l. I think any buyer would be looking to buy eve the mattress company and not tax losses. They may throw in a few extra quid for the losses as well but I think that would not be a considerable sum.

I don't know whether that would wash don't give up. There are anti avoidance rules around this sort if thing. The business needs be mostly unchanged. Things like a new customer base, new price points, different sales routes, new management team could would count against this being available. I would certainly think a new product range being introduced would not help the matter. The company can make changes to keep pace with new technology/ markets but that's about it. Its worth googling the phrase mcinocot. Major change in nature or conduct of trade. DGM put some info out earlier on it. These are more qualitative measurements.

Nope not the parent company. (Remeber the cos must be in same group at the time the loss is made) Only within the eve entity itself can earn them out by making a taxable profit.

Yes true DGM. But any sale of eve would have to pass an investment committee. They will ask how the losses can be earned out and on what timescale.

Something else to note is that the 46m accumulated loss you see is the equity side of the accumulated accounting losses. Tax losses are rarely equal to accounting losses. For example for tax you can't take credit for depreciation.

DG generally group relief is available so that profits and losses can be surrendered amongst qualifying group companies. Its actually pretty straightforward and the rules have been relaxed recently re surrendering carry forward losses. The issue is that eve needs to be part of the group it surrenders these losses to when the losses were made.

DGU. The only way to realise value on these is for eve to make a taxable profit to offset these against. That prospect looks remote. Nobody will give you a penny for them. It's quite telling that the tax losses are not recognised in the accounts. Tells you what the auditor thinks of future profitability

Sorry guys this is pie in the sky stuff. There isn't a market for selling tax losses. That was ended by anti avoidance laws many years ago. The only way a future purchaser can earn out the losses is by making the trading company profitable (eve sleep). If the company is bought out by a group / other company the new group will not be able to use these to offset against profits elsewhere in the group because they are ring-fenced.

DG some good research re tax losses. Regarding the 75% rule you picked up on. This is called a succession, the losses only transfer if trade and assets are passed onto a new company that is broadly 75% under the same ownership as the transferor. So the losses won't travel if trade and assets sold to an unconnected party. They will only travel if the shares are sold. You rightly picked up on some anti avoidance re major change in nature conduct of trade. These are fairly complex but what it boils down to is the same trade must be carried on in the same manner as before. There isn't much of a market for cit losses. I would be very surprised if anyone attributes value in a sale process (although the seller is likely to ask). Further restrictions on how quickly they can be used have been brought in essentially 5m dominions each year + 50% of profits over 5m can be used per annum. I have q funby feeling they will be ring-fence to the business as well. I will get back to my books and check.

I can't find the ye 21 accounts rns. Am I being blind or are they not yet released?

I thought I caught the bottom at 2.3. No such luck. Do I take a few more at this seemingly undervalued price or will the knife keep falling?

Fantastic revenue figures. Doesn't appear to e a particularly well loved share. Contemplating a small punt. Mcap feels a little heavy.

Trotsky. Perhaps you should have posted this as well: All sites closed from 5 January 2021 for indoor dining, re-opened in April 2021 for outdoor dining and dine-in from May 2021. Sure there was 4m of covid related income, there was also significant disruption to operations due to covid. I wouldn't expect these disruptions in the future any more than the 4m you refer to.

Just had a skim read these results are beyond expectations. Sound cash management, maiden profit, 2m! Confident these guys will see us through the challenges ahead. Would like to see more of the shawa brand openings as these streetfood type stalls are very popular in London right now and with lower price point they will help the company navigate the spending squeeze.

Speculating here but does the capital raise have anything to do with the delay in accounts? The auditors perhaps unwilling to sign off on a going concern statement without seeing proof of liquidity to finance liabilities over the next 12 months? Something not right here.