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eve Sleep wide awake and set to double revenues in UK

The company’s marketing mix is proving a great success in driving sales and improving marketing efficiency
Balancing on a mattress
Far from sleepy: UK profitability for the sleep retailer is expected in 2018

eve Sleep PLC (LON:EVE) is on track to double revenues in the UK on the back of stronger than expected trading.

Group revenues for the first 11 months of trading are expected to have grown 130% year-on-year.

The UK revenue is expected to be 105% higher while international revenues are forecast to increase more than 180%.

In a trading update, the online mattress retailer said the marketing mix is proving a great success in driving sales and improving marketing efficiency.

WATCH: eve Sleep 'providing great sleep for people' - CEO Jas Bagniewski

Chief executive Jas Bagniewski said: “We continue to be in a period of acceleration with strong momentum across our 15 territories.

“eve is making good progress towards its objective of achieving UK profitability in quarter-four of 2018.

“This is demonstrated by the UK business now anticipated to report a maiden profit after marketing costs in the fourth quarter this year, a significant improvement on the first half of the year.”

In early trade the company was up 12% to 99.75p.

Strong progress made since float

The company has made strong progress since it floated on May 18.

In the UK, marketing costs as a percentage of revenue was 64% in the first half of 2017.

As guided in the September interim results, this improved 1400bps to 50% in October.

In November eve is on track to achieve a further significant improvement with a 1500bps reduction to 35%.

Brand investment proving successful

eve's longer term investment in brand is also proving successful.

At 7 November unprompted brand awareness had risen to 6.6% in the UK, compared to 4.1% in June.

READ: eve Sleep signs major retail partnership agreement with German department store chain, Karstadt

The retailer’s exclusive agreement with German department store chain Karstadt is also progressing to plan and eve is now in 79 stores across the country.

Including the agreements with Next Home, Debenhams and Fenwicks, eve now sells through 146 stores in the UK and Germany.

eve said progress across the business is ahead of the plans set out at the time of the IPO, which has resulted in some additional investment being brought forward from 2018 into 2017.

The company remains on track to reach profitability at group level in 2019.

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