Eve Sleep Plc (LON:EVE) shares jumped on Thursday morning after the mattress maker revealed full-year revenues were poised to beat revised forecasts.
It has been a nightmare first 18 months on AIM for eve, which got rid of its chief executive and founder Jas Bagniewski over summer, citing a series of “strategic missteps”.
READ: eve narrows focus as it looks to put torrid 18 months behind it
Specifically, the board said management had lost focus and had failed to understand what was required to crack new markets overseas.
Sales were still good, it added, just not as good as it had hoped, and it subsequently cut its guidance for the year.
But a recent partnership with UK bed retailer Dreams has continued to enjoy some “early success” which is providing a fillip to sales and means full-year revenue will be in line or possibly above revised expectations.
That will no doubt please new chief executive James Sturrock, who joined from online greeting cards group Moonpig in September.
More products, better website
Since his arrival, he and the board have been working on a new strategy, which will see eve narrow its focus on its core markets of the UK, Ireland and France, having spread itself too thin before.
The market already knew about that, but Sturrock added some details to the refreshed strategy today (Thursday).
A new chief marketing officer will join at the end of the year tasked with “optimising market effectiveness”, while the product range will be doubled next year to include things such as pillows.
Converting browsers on its website into buyers will also be a key focus for management, and work is already underway to improve the functionality of the site and improve delivery options.
Sturrock expects this work to impact revenues next year, though, and the company next year’s sales would likely “finish below existing guidance”.
£15mln fundraise
“The business review has reaffirmed my initial confidence in the size of the opportunity in the sleep market and eve's ability to realise it. It will, however, require further investment than originally expected,” said Sturrock.
“While we have revised our short-term growth ambitions during this period of consolidation and investment, we anticipate a marked improvement moving into 2020 and beyond.”
To support the new strategy, eve plans to raise £15mln from investors at a price which is “significantly higher than the prevailing share price”. The fundraising is expected to be launched before the end of 2018.
Shares rose 8.6% to 15.8p on Thursday morning. They listed at 101p when eve joined AIM last May.