eve Sleep PLC (LON:EVE) has slashed its losses by 50% in its first half, however, the troubled mattress maker also downgraded its full-year revenue forecasts.
In a trading update for the six months ended 30 June, the AIM-listed firm said that its underlying EBITDA loss had been cut by 50% to £5.9mln, in line with its expectations.
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The reduced losses had been driven by a refocus on three markets in combination with “greater marketing efficiency” and a reduction in overheads. The group had also ended the first half with £12.5mln in cash.
Revenues in the UK & Ireland division were broadly flat, down 0.9% year-on-year due to reductions in marketing investment as well as a “challenging retail backdrop”.
Revenues from France, meanwhile, fell 29%, reflecting a decision by the company to prioritise margin contribution over revenue growth as well as work to localise and reposition its brand.
Overall, the group’s underlying revenue for the period was 8% lower at £12.9mln.
Revenue growth to resume in second half
Looking ahead, eve said it expected its revenue growth to return in the second half as a result of new marketing campaigns, three new retail partnerships and benefits from its rebuilding strategy.
The company added that it was also “on track” to deliver a full-year EBITDA loss that was in line with expectations, while revenues would be “slightly below” previous guidance due to softer market conditions in the first half.
James Sturrock, chief executive, said that despite a backdrop of “substantial retail headwinds and the current competitive nature of the category” he was pleased with the progress of the firm.
Going forward he said the group would focus on reducing losses and created a “differentiated proposition as a sleep wellness brand” to underpin long-term profitability.
“We have some exciting plans and partnerships launching and I look forward to seeing more progress against our strategy in some of the biggest peak trading periods for the business in the second half of the year", the CEO said.
eve Sleep is currently trying to rebuild its reputation among investors following a torrid 2018 that saw its founder and the chief executive Jas Bagniewski ousted amid a series of what it called “strategic missteps” that resulted in sales falling below expectations.
The lower revenue forecast left the market feeling restless, with the shares falling 4.6% to 8.4p in early deals on Thursday.