Eve Sleep rocked by 'appalling' market conditions, shares plunge

Shares in Eve Sleep lost more than half their value on Tuesday after the mattress specialist warned it would need fresh investment within a matter of weeks if a takeover offer failed to emerge.

Eve said weakening consumer confidence and surging inflation had hit demand for big-ticket household items. Revenues in the six months to 30 June were down 16% on the previous year, at £11.6m, with UK revenues off 18%.

Gross profit slid 33% to £5.1m, while the pre-tax loss widened significantly, to £4.6m from £2.3m.

There had also been "no let-up" in the challenging conditions since the period end, Eve noted, with direct-to-consumer sales orders in July and August down 14% in the UK and Ireland year-on-year, and 16% in France.

The firm has reduced costs by cutting director salaries and trimming the headcount to 30 from 55. It also began a formal sale process on 6 June but has to receive any firm bids.

"Eve will require further funding in October 2022, based on current management forecasts," it warned. "If further funding cannot be raised, or a firm offer for the company is not received before the company’s cash reserves are fully depleted, the board will take the appropriate steps to preserve value for creditors."

As at 31 August, the company’s cash balance was £1.0m.

Shares in Eve were down 52% at 0.35p at 1230 BST.

Cheryl Calverley, chief executive, said: "We are doing everything possible to manage the business through these incredibly difficult times, while speaking with potential investors and strategic partners to secure fresh investment aiming to put Eve on a more secure and sustainable footing.

"Truly unprecedentedly appalling market conditions have stopped 2022 being the transformative year that it was intended to be, despite a very bright start, and our focus now is on navigating the current storm."