Eve Sleep to focus on French business after strong year

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Eve Sleep PLC (LON:EVE) has said 2021 will be the year it transitions from a rebuild strategy to focus on growth opportunities in the UK and beyond after a strong 2020 performance.

The sleep wellness firm started revamping its business in 2018 and now it wants to invest further in its existing French operations using its own cash resources.

READ: Eve Sleep raises forecasts again after TV ads, Black Friday fuel trading momentum

The group said trading in the first few weeks of the year has started well and is following the same positive trends seen in recent months, which benefitted from the shift to e-commerce and high demand for homeware products.

However, the availability of raw materials and component supply remains an industry issue and a potential limiting factor on near term growth.

The retailer said it has not experienced any material cost/duty increases as a direct result of Brexit, though there has been some slowing of the pace of deliveries to Ireland and Northern Ireland resulting from courier related issues.

In the year to December 31, 2020, Eve Sleep said revenue increased by 6% to £25mln, driven by 18% growth in the second half, with record trading over the Black Friday period and the first week of the Boxing Day sales, while underlying losses were cut by 81% to £2mln.

The group ended the period with net cash of £8mln bolstered by £300,000 of tax payments deferred until after the year-end.

“We expect the 2022 financial year to reflect the benefit of the strategic investment programme as the business progresses towards breakeven,” analysts at house broker finnCap (LON:FCAP) commented.

Shares slipped 13% to 5p on Thursday morning.

–Adds analyst comment, shares–

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