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Simba: https://www.cityam.com/mattress-maker-simba-posts-record-profits-as-rival-store-closures-cushion-sales/
Mattress maker Simba posts record profits as rival store closures cushion sales
The report lacks detailed figures (as private company I guess).
'London-based sleep-tech company Simba has posted its highest ever half-year profits, as rival store closures cushioned sales.
Simba’s first-half sales soared 130 per cent in the weeks to 30 June, in comparison with the same period in 2020.
The company, which focuses on mattresses, had already seen strong sales growth of 66 per cent last year – when the pandemic pushed consumers to make home improvements.
Lasting trends
With mattress shopping typically an in-store affair, the online mattress maker’s results boomed amid Covid-19-related store closures.
But now bricks and mortars have reopened their doors in the UK, the company may see more competition.
“The easing of lockdown in the UK in April brought offline competition back into the market and whilst there have been more demands on people’s discretionary spend, an increase in costs of advertising and inflationary pressure in raw materials, Simba has proven more than resilient,” chief executive Steve Reid said.
“Sales performance through the lifting of lockdown has remained very strong. Added to our record sales and accelerating growth, the first half of 2021 has also been Simba’s most profitable ever.”
The pandemic may have sparked a permanent shift to online for mattress and sleep shopping.
Fellow London mattress maker eve Sleep saw the majority of its sales made online during Covid-19 restrictions, suggesting the trend may be a permanent shift.
Eve Sleep saw its overall revenue swell 13 per cent in the first half of this year, it reported last week, as consumers continue to seek sleep comfort as the UK opens up again.'
I wonder, how can there be such a difference in revenue growth between Simba and Eve? I know we are being less aggressive in advertising than them, but 13% vs 130% revenue growth for H1 seems we must be doing something wrong? (Especially since Simba are actually profitable, so it's not like they bought sales at any cost). Any ideas on this?
I'll be careful what I say but someone once pointed out to me that what privately owned companies announce in their press releases is a matter for their conscience, and what they actually put on their tax returns to HMRC is not publicly available info. I have my own sole-trader business and can say to my friends – "I'm doing well / badly" – and no one else could complain if I glossed my position or made things sound worse than they are.
Eve is a PLC and have to give accurate info to the market.
It's good to know that the bed-in-a-box business model is a profitable one. It gives us hope. Simba say they'v now had 5 profitable quarters, or so I've read in the last couple of days. Certainly they give a % figure for their increase in revenue. I haven't seen the actual profit in £s mentioned but maybe someone else has?
If Simba is a Ltd company then they have to log accounts that are free to see. I don't think that they could mis-report publically by quite as a big a margin as some here might be suspecting? Just my view.
They have an advert that says they have received more positive awards than any other mattress in the uk. Maybe EVE should be pushing that area? Giving confidence to a new buyer that a remote purchase on such an important item not being able tot test it first would be helpful. (back to Mrs W again. I told here we could send it back, "but thats not the point" she said. She wants to feel the product, get a sense that is as well made, see how firm it is when she lies on it. Comparisons are very difficult when looking at different mattresses and maybe we overestimate the "joy" of the on-line buying process a bit?
Simba Sleep Limited can be found on Companies House (company number 09703422) though their most recent account accounts are for 31 December 2019. They posted turnover for the year of £48m of which £38m was in the UK. Interestingly like Eve they withdrew from some overseas markets in the year and have previously posted some very chunky losses (2019: 16m, 2018: £44m (15 months).
Other bits to note (2020 eve comparisons in brackets):
- Gross profit margin of 32.9% (57.3%)
- Interest payable £2.2m (£0.0m)
- Bank loans £6.7m (£0.0m) and preference shares £3.1m (£0.0)
-Trade debtors £4.0m (£0.7m)
- Share Capital & Premium £88.4 (49.7m)
It looks as though they have thrown a conisderable amount of resouces getting to the size they are (more so than Eve) and taken a riskier approach with the debt funding but I would imagine the higher turnover is supporting a larger marketing spend which would help them with the growth they've claimed. I also had a quick look on wikipedia which says they received a $24m investment from a PE firm in early 2020 and expanded into new countries which must have helped!
The lower GPM and higher trade debtors imply that they used to sell more of their products through thrid parties. Potentially the pandemic meant a shift from this to direct sales which would help with the growth in turnover but may not be sustainable for them as shops reopen.
Interesting to compare the two, but it looks as though one of the main differences between the two is the level of investment made which has bought market share. Personally, with the share price where it is, I'd rather Eve prove that it can be profitable which should result in a decent rise, before potentially raising further funds (if needed) to expand at a faster rate.
I checked back to the email where private companies were mentioned and in fact it was the practice of picking individual months or quarters and press releases to give an impression that may be unduly favourable. It'll be interesting to see what the 2021 figures for simba show once they are available at companies house as they have made profits for 5 quarters now - revealed in their press releases (and according to my memory which is not 100% reliable!). I had noticed the wiki page on simba before I posted and they have put a lot of money in over past years (as has Woodford with eve!).
Interesting comparison CFAN, thanks for that.
The more I look at it the more difficult it looks for this business model to prosper, Throw a ton of money to get sales and market share, only to see it shrink back as soon as funding is withdrawn (broadly speaking).
However EVE being a PLC its much harder to hide financially (and often too, with updates every 6 months which non listed companies don't suffer from) and its pretty much priced to fail at the moment, which means if EVE can make it, then very good returns are on offer.
Its becoming more apparent than ever that diversifying as much as possible from just the "one" product is both necessary vital and again it looks as though EVE's timing may have given it a bit of a jump start on other players, (but to be fair I have not researched this area of competition, given FA is not my focus, so I could just be talking out of by backside.. (I can hear what you are all saying. thank you).
Currently I have a small stake but Its in the belief that EVE (on balance) will succeed, as soon as I have more confirmation, (whether its via TA or an update,) I will be adding more.
STOP PRESS: Mrs W has just purchased the hybrid mattress and 2 pillows! From Angleterre I'm afraid Monsiuer D :0(
( there was a 35% discount on offer so she took the plunge.)
so, all we need to do now (according to the brains of the outfit) is for the shares to make a £1000 profit, then sell and we will have had a free mattress.!
(This is a theme with us both, G4M giving me a lovely Strat and WOSG, a very nice Omega Seamaster. Although now I need to get back in so as to get the lady's version as well.)
(If I am not under enough pressure as it is!)
Just an observation on how we each perceive risk in that I see HE1 as a larger gamble than eve. Even if one wanted to get out of eve I can't imagine there won't be periods when the sp rises (September and then January) enough to allow an orderly departure whereas with HE1, even though the signs are good, it could all amount to almost zero in a relatively short time.
At 3.55p eve is still over 3 times the low of a little over a year ago when, looking back, it really was priced to fail.
Excellent news for the Wyndrum family regarding your purchase! I hope you'll like it.. Nothing like owning a mattress to give an insight on the company too.
(I rather wish I'd kept my G4M shares now, and Future, and Halfords. It's a tricky game. Still, it sin't over till the final sale when you, hopefully say "I could've ket future an bagged but with eve I'm up even more).
You'll have to report back on the delivery experience etc. too, Wyn.
Think I need a new bluetooth keyboard:
'Still, it sin't over till the final sale when you, hopefully, say "I could've kept future and bagged but with eve I'm up even more..'
Thats a great question D, which has the greater risk: HE1 or EVE?
This type of question I think if the individual takes the time to think it through honestly, can be very helpfully revealing about the character of the individual. You might put more money in, on reflection, a riskier investment than another. ? Why would you do that? Was it the potential reward, not realising at first it was riskier, the buzz of a gamble?
Great question!
@wyndrum
Ours got delivered, never really thought about it tbh, and it comes tightly rolled up - just put on the bed and remoe the polythene - it expands on it own. Wife thought it may open up like a lifeboat raft so left it for me to do. :-)
Great mattress, great service...
Okay... to a few of the pointers raised so you’ll have to pick out who they’re for and/or related to.... unless directed at such said person. (And in no particular order)
Simba 130% as to eve 13% - this could be as simple as typo, or bad period against good period for Simba so it could be misleading, whereas with eve... it’s a further increase on what had been really good results for at least the past 2 TU periods. An increase on an increase
@Cfan - great input...some intriguing info
We keep saying this and seeing this being published but there has been and now will be an even greater ongoing shift to online purchasing. A much greater confidence in us to trust the online shop without the “need” to try in a shop beforehand (the x-day trials are really good boon for this) and if for anything else the overheads are dramatically reduced by not having to cover costs for retail outlets, staff and the gubbins that go with it.
With regards to my last comment and having confidence in online shopping - well done that superstar Mrs W ( zero patronising meant) as I know from your previous posts, Wyn, that she’s not all that keen without physically trying in a shop first, but on this occasion (totally biased here) she’s done it!
With this too, funnily enough, and from previously working in retail selling sofas (for a sin), unless you’re going to stay in the shop for hours upon end chilling on a sofa or lying on a bed, you can’t truly know if it’ll be the right one for you. So often people buy a sofa or a bed from a mere handful of minutes sitting, lying etc on them. ........... this is another reason why the trial for x-days is so good. In addition, if one hasn’t tried memory foam before then it can feel a little different to start.
Sorry in advance here Wyn, but again I find your posting @ 11.52 confusing. On one hand you say eves’s lined up to fail, yet you say you can see them succeed. Another hand you say you don’t really do fundamentals but you’re often breaking all of that down, in detail, and then over analysing. Is it on 2 points here worth you being invested if you don’t have the confidence in them or the other point, is that you wish you invested more, to then see if you can help bring the price back down to then top up? Personally I don’t get knocking down a company that one’s invested in if they want to make money out of them. Frustration I get, and can have, but I’d rather keep that to myself. Losing confidence in a company I’d rather not be invested in. Not thinking a company is going to do well and possibly fail....well, I wouldn’t even consider investing in it. Not rocket science really.
On a positive Wyn, yes again, a pointer to you, I agree...... intriguing dilemma.... risk/reward over not so risky/not so rewarding.... my angle of wisdom would probably include the words of a pre-hatched bird and a something to carry them in combo’d with if you don’t try you’ll never know.
Finally, best thing Eve did was to expand to
Blast, ran out of characters.....
To finish.......
Finally, the best thing eve did was to expand from just mattresses to the idea of a of sleep wellness brand. Not only giving the prospect of becoming known for their sleep/bedroom products, but it also means that many of the products have a greater profit margin and the fact that they can and may well be bought more often. A win win here ( so tempted here I’ve gotta do it...... a Wyn Wyn here.... hehehe) as it opens up many more selling avenues let alone anything else. Ok, I’ve splurged enough.
Sleep well all
My point was UN, it looks to me as though, based on the current SP, the market has priced it more likely to fail than succeed. I am taking the opposite view. I recognise the failure possibility is there but believe it more likely to succeed than fail. Hence I bought in.
(The chart supports the buy in price currently). So having decided to buy it was a question of finding the entry point, which coincidently is right now so I did not have to wait.
I have also given this a time limit until April next year. (This may change if circumstances/facts change but I have allowed for a stop loss of zero pence. I am more likely to buy more if EVE's position strengthens rather than sell and take the profit. (But I can be pretty fluid on my decision making.)
I will let you know how we get on and in terms of reviews you can pretty much bank on a very good one.... a very , very good one. :0))
What i was trying to say UN, is it looks to me as though, based on the current SP, the market has priced it more likely to fail than succeed. I am taking the opposite view. I recognise the failure possibility is there but believe it more likely to succeed than fail. Hence I bought in.
(The chart supports the buy in price currently). So having decided to buy it was a question of finding the entry point, which coincidently is right now so I did not have to wait.
I have also given this a time limit until April next year. (This may change if circumstances/facts change but I have allowed for a stop loss of zero pence. I am more likely to buy more if EVE's position strengthens rather than sell and take the profit. (But I can be pretty fluid on my decision making.)
I will let you know how we get on with the product itself and in terms of reviews you can pretty much bank on a very good one.... a very , very good one. :0))
sorry about the duplicate post, LSE buggering about.