Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
Those are delayed trades from this morning.
Decisions...decisions..is this going to be one of those times that I will ultimately be able to buy on the open market below the offer price....!
Need to see the announcement here but if handled right it should be positive - line under the SFO business, a war chest for growth opportunities and a chance to determine the strength of II interest. Only regret would be the discount is based on a pretty weak share performance but if there’s one thing you can guarantee with the FTSE, it’s weak valuations. The UK seems to have a real issue with pools of capital based upon the anaemic performance of many stocks.
You can see why it was held back post SFO now…
According to Sky/Reuters, 180m equity raise at approx £1.20 a share.
eve are always so near yet so far. Been here quite a while through the disaster days of the forced Woodford sale. eve were always a no brainer at that price. The pandemic accelerated the shift but it seems that eve simply haven't managed to ride the wave like other online players.
2020 should have been truly transformative but we're basically told it was only evolutionary (+19% in H2 feels to me like a real missed opportunity).
As I've previously mentioned, their inventory control appears to be poor (or too cash conservative) with many stock-outs which, as they report, impacted sales in H2 last year. That's a huge strategic misstep and an extreme annoyance. I see it's apparently sorted and sales are at +16% so that's a positive but, again, what a missed opportunity.
I still think there's a great brand here though - it's whether this management realise it's potential as an independent player. I think the Simba / eve talks from a few years ago tell you that consolidation will happen over the next few years.
Btw, and it’s still undervalued based on the brand equity and existing sales. It’s ridiculous. I take the retail investor presentation as a sign they recognise they need to work on this. Which is good
Results will be in line with the trading update so it’s not going to move the price much. 2021 guidance will be important. Eve have a great business and the fireworks with the share price recently show the potential. My only doubts would be a) commodity price inflation hitting margins b) their continued inability to have a fully stocked inventory. The spindle bed (which they reported as a key seller) STILL being out of stock is a huge annoyance and mean missed revenue c) there’s obviously now going to be competition from the traditional retailers as the reopen continues.
My perspective remains that the eve brand is great and the sales development is encouraging. However, their margins need to improve. I still think the most logical is a takeover by a bigger player looking to buy market share in the bed space and online. The CBD piece is a lot of noise but not material to this companies future.
Browsing the site, I see sales must be doing well. Premium Hybrid (one of the which best buys and top sellers so you can assume v well stocked) is sold out in Super King (the highest priced version).
So, can someone tell me. a) Was that an aim pump and dump b) a genuine (although slightly crazy) reaction to the new cbd launch c) as yet undefined reason.
That volume was spectacular. Btw, looking at the potential made.com float and valuation (which appears to be x2 revenue). I think fair value on eve sits at similar so a market cap atleast double to three times where we are (and with growth in France and general online trends maybe more)
Any technical traders out there? I read break high 6 and we’re onward to 9 with no resistance?
Is GameStop style movement a wish too far! :)
I think we have caught the attention of the aim twitter traders and the technical traders. I suspect there’s a lot of trader cash flying about at the moment. Eve usually moves fast but how far?
https://www.licensingsource.net/mdr-brand-management-unveils-new-cbd-range-with-eve-sleep/
For me the only huge frustrations I have with eve are a) their inability to keep key items in stock. For example, they mention the Spindle bed frame as a key seller in the results and again they are out of stock on king size. I simply don’t get how a company with a cash pile eve’s size find themselves unable to maintain inventory. I guess supplier issues but bulk up your orders and warehousing if needs be or are they too cautious with cash.
B) the inches rather than yards marketing strategy made sense but I wonder, again, if that cash pile might have been more aggressively used as last year was an opportunity like no other to grow. From Simba and Emma’s reported trading. I think we can say eve probably didn’t grasp this as firmly as they could.
All that said, I’m pleased with progress. I read that the planned French expansion does mean a pivot from cash conservation to a more aggressive growth strategy so I expect good things this year.
Edit edit edit: This is what most suprises me most about the price action eve the last few days. It's priced like a knackered old brand on it's way down with dwindling profits and customer base rather than an up and coming young brand with serious marketing expertise in the C-suite and a now firmly established online (read no legacy cost issues) product with the well recognised consumer best buy awards. It seems a no brainer to me that we should be far higher and the market will, surely, recognise very very soon what we have here.
Edit edit: I really think people (and the market) underestimate the investment in 'brand' that occurred under (mostly Woodford). Note that the 'big three' online seem to be Emma, Simba and eve as position three. Breaking in to that space for an entrant would cost more than eve's market cap....
Edit: This year, not next year!
Look at it this way. Their cash was flat at year end 8m (2019) vs 8m (2020) with the real action only starting Q2 once lockdown 1 occurred and accelerated the online shift. They will make a profit next year on the UK business. I'm sure of that. What I don't know is how much they will plough in to generate growth in France. However, as that's out of the cash pile, it's all good. Without wishing to labour the point too, the fact they are brand building means that the attractiveness of the company as an acquisition isn't just to bed in a box style companies. They might just attract interest from a big player looking at adding a new 'cool' homeware / sleep wellness brand to their portfolio.
I’m reading this as extremely positive. They’ve basically said the cash pile is no longer required to support the U.K. rebuild and is now being used to grow the French/EU market.
So, is eve now a growth rather than recovery stock again?
Only thing is I wish a little clearer on 2021 revenue guidance but I understand why they haven’t really nailed a number to the mast.