The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Mountainous, as D-G and Yanis have pointed out that's UK & I, not plc. House broker forecast is £1.6m loss for the plc, and this was referred to in the presentation as well. You will see a certain poster on here repeatedly posting their misunderstandings of previous company comments on profitability because they haven't bothered to read and understand the context. That's great for me, because I make money out of people like that around every TU and results announcement but not good for the company as it junks the share price.
People are negative because they expect too much and then are disappointed when eve delivers it's plan as it did last year.
I fear that you too will be disappointed because Cheryl said they are aiming for a £1.6M loss this year, not breakeven.
Caps unintended. With the advert and that video that keeps appearing I can't see what I'm typing. It's ****ing me off.
I have noticed that sale DISCOUNTS in Eire are consistently smaller than UK discounts, so maybe the competition isn't as tough and a 100 night trial does the job.
D-G, ref the 240k visits compared to 315k last January, I think I saw a comment that average order sizes are up 30% (does that sound familiar?) which could mean the same value of orders even on fewer visits. As per my comment on France, the quality of the visits matters as well.
Quality of traffic in France is much better than last month. Bounce rate below 50% and average visit time up. Points to more serious interest and hopefully better sales.
Wyndrum,
I agree with all that. We will get good detail on 2021 in March, but I don't expect any great surprises.
I also expect any TU then to be minimal (last year it was little more than the % revenue increase). From review volumes in both UK and France it looks like January was pretty steady and now we are out of the sale period I don't see that improving much before March.
Next chance I see of positive news would be the TU in July but we've had so many 'steady as she goes' updates that I'm resigned to a repeat of that.
One thing to look out for would be the mooted expansion into Benelux. However, I don't think there is budget for that this year and we don't even own the relevant 'evesleep' domains.
This investment continues to be a long slog, but still worth it IMO.
Wyndrum,
My thanks as well for your trading insight. Totally agree about buying above a previous sell if the circumstances or technicals change. Disagree in that I do sometimes have a conviction buy - ie take a position that a company I think will come good on their fundamentals over a period and hold for that (maybe trading round the highs and lows). eve is one of those.
I feel a need to stick up for eve's management and reporting in the light of many recent comments.
The results were actually slightly better than I expected, based on formal documentation and presentations from the company verified by other research in Web traffic, review volumes, broker notes etc. All that info has been posted here (thanks to those responsible)and available for all of us to verify and analyse. I don't think the company are at fault if people have cherry-picked the good parts and not balanced that with the bad parts.
Same with the 'profitability' quotes. All the ones I recall seeing and hearing were qualified ('moving into', 'UK and Ireland' etc) but I think people have just seen the 'p' word and got overexcited. Thinking more widely, how do you expect a company to accurately forecast how many individual people will buy an eve mattress over the next couple of years rather than an Emma or a holiday?
While I'm on my high horse, it amuses me that some people want to advise the experienced board of the company when it seems from their comments that they have remarkably little understanding of business, retail, accounts or investing. It really is funny.
I sold 30% of my holding on Tuesday, expecting an initial drop on Wednesday on disappointment but then a recovery on basic value. If I had realised how many people are so out of touch with reality I would have sold a lot more. I assumed the comments were just ramping, not people actually believing it!
I get that people are upset because the TU wasn't what they expected but I don't think the company can reasonably be blamed for that.
Yanis,
I appreciate that you are well down and hurting, but today's TU wasn't a 'bad' one, it was 'as planned' (in fact slightly better at £2.9M loss against the forecast £3.1M). The company is transforming from where it was to where it wants to be. Barring the unexpected, 2022 will be another step with further reduced losses and still a planned £3M in the bank.
Costs are higher than the gross profit, so there isn't one (and won't be one in 2022 either, and probably not in 2023 on current growth rates).
To slightly temper my previous enthusiasm, I started looking at the SEO opportunity for eve - ie Google 'Yuyu' and see Eve. Unfortunately, Argos are high in the rankings and advertising them at £25 (if they are the same thing). I still like the sleep wellness' and 'free advertising' strategies.
I like this addition. Fills a gap in the 'Sleep wellness' range and is a high-end product (eg stocked by Harrods) that embellishes the eve brand. Would have cost eve too much to design, develop, source and brand up themselves for a relatively small number of sales on the website. eve will get a margin or commission (depending whether they are selling or passing on leads) for little more outlay than an update of the website. If Cheryl can exploit the association with Yuyu it might even lead to additional mattress sales.
Maybe eve could start selling roofracks so people could collect their own mattress? Extra revenue, no delivery costs and people can collect when they want.
Dont,
Did you bother to research Royal Mail maximum parcel sizes before sending this?
If you are off, many thanks for all your posts which were usually closer to my thinking than most of the others.
I understand your position , but I still see the upside as stronger than the downside.
I suspect from that award last week for licencing the 'Well Slept' range that the whole Boots thing last year was arranged by that third party via MDR. (Also, if it had been eve, I would have expected better cross-selling on the packaging.) With all those snouts in the trough in addition to the production costs, even a 'successful' Boots campaign might not have left enough for the parties (except Boots) to want to do it again.
That my take, so could well be wrong.
The advert that appeared above his thread just now was entitled 'control your grass weeds'.
I tend to agree that CBD oil isn't necessarily approved by a significant section of the eve target base and wouldn't mind if it never happened.
Regarding advertising, I thought I'd seen a lot more Internet advertising, especially on the 'eve sleep' keyword on Google. Hope it isn't one of the new recruits naievely ****ing away a PPC budget.
Good news! I would expect approx £180k-£200k bottom-line profit to increase the SP by 1p.
Bad news! You are seriously underestimating the necessary cost base of a company like this.
To answer the original question, it's because the calculation doesn't include marketing, distribution and admin costs. If there was a realistic chance of £7M profit, the SP would be over 30p, not under 3p (and that's why I'm still here).