Esr 2022 Share Discussion Threads

[mightymouse4] 14/11/2018 09:09

Ps for the sake of full disclosure I have now doubled down on my short, will take half off at 9p

[mightymouse4] 08/11/2018 10:49

It's absolutely amazing that it's managing to stay at this price, when it inevitably falls to 5p in the near future you can't say you didn't have plenty of time to get out. The cash must be almost gone now and the scary deeply discounted and dilutive fund raise is imminent. And that's if they can find a buyer for this tripe

[ltcm1] 22/10/2018 09:25

The big sleep.

[mightymouse4] 11/10/2018 11:07

New 52 week low and single digits just 6p away now

[nobilis] 06/10/2018 10:50

thinking of buying speculative small

[mightymouse4] 06/10/2018 10:49

Just reading the last report, they are burning thru 5m a quarter....so they will need to raise cash by Xmas, Jan latest. Can now put an accurate deadline on my single digit target....no later than end of Jan.

[ltcm1] 20/9/2018 18:00

They were putting 120 pounds off vouchers in the property magazines in the summer, it is always hard to get full price when you have done that.

The thing with mattresses is it is very much something you can put off for a year if things are a bit uncertain with the economy. And guess what - they are!

A good discussion here but I wouldn't invest myself for those two reasons until the picture is clearer.

Good luck if you do though.

[kcr69] 20/9/2018 14:30

mightymouse4

Thanks for your measured response. As I said previously, a lot of what you say is extremely valid and the elasticity relationship between a reducing, but more focussed marketing spend, and revenue returns is now undoubtedly the key point here. What is unknown is quite how bad the previous spray and pray approach was with regard to cost over value generation. With a new CEO in place, and I would imagine some fairly draconian value engineering measures across the cost base, I personally think it is still a little too soon to predict fund raise, demise or even success, however the next 6 months are without doubt pivotal.

[clocktower] 20/9/2018 13:18

Expensive blocks of foam - Foam mattresses have been around for donkeys years but the older mattress makers like ViSpring - Relyon - Myers - Slumberland still use springs. So not a market changer. Without the marketing budget, as mm4 says - its curtains in a matter of time, in fact they might be better off using the remain cash selling curtains.

[mightymouse4] 20/9/2018 13:07

I've just seen it too many times....it never ends well....also the marketing costs are variable, they are selling £1 notes for 50p. The business model doesn't stack up, when you pull back marketing spend you get a dip in revenue. It's a vicious circle.

[clocktower] 20/9/2018 12:56

trendspotting, you know the saying "fools rush in where wise men fear to tread"

The reason for the buying imo, is that they have presented terrible figures in an impressive way but once they have sucked in a few more,the profit takers will have their day.

[kcr69] 20/9/2018 12:53

mightymouse4, you make some very valid points but unfortunately you seem a little bit of a male hen.

Unless you know with certainty the scale of savings that will come from the already announced headcount reduction of 20% (which is highly likely to increase), and reduced marketing spend (driven out of operating in less territories) then I am afraid you are simply putting your finger in the air and waving it in what appears a rather bitter manner.

If, and it remains a big if, H2 FY18 loss can be reduced to around circa £6m - £7m, and FY19 loss to a similar amount for the full year, then I would suggest there is a more than probable chance that the banks will be supportive given the proximity to break even in FY20. This is all based on current run rates and trends in both margin and revenue.

Of course, if the very many variables dip below the current trend and H2 FY18 loss is in excess of £8/9m, then I would fully agree that a fundraise is certainly on the cards if the business is to survive, as any break even point would go out to FY21 and beyond.

Whats is without doubt however is that if a supportive shareholder base is in place with a genuinely long term view, then the business has vast potential as the market opportunity is sizeable if a critical revenue mass of £100m and above can be achieved.

It's most definitely not without risk as I have portrayed and definitely for long term punters. Just an attempt to be balanced based on the figures published, and an admittance, that unlike your good self, I cannot predict the future.

[mightymouse4] 20/9/2018 12:21

Oh dear I can't look, this situation never ends well

[trendspotting] 20/9/2018 12:06

Lets not say 10, lets say 1000 - your statement sounds pathetic. The results are good and the BUY trades are supporting it

[mightymouse4] 20/9/2018 11:50

A 10% blip up is equivalent to 1% up before the reality check. Woohoo

[trendspotting] 20/9/2018 11:38

Well everyone seems to be buying strong today.

[mightymouse4] 20/9/2018 11:22

I'm afraid it's the mattress equivalent of a Ponzi scheme...it costs more in production and marketing costs than they generate per unit and the whole thing is kept afloat by raising money at ever inflated valuations. The merry go round has now stopped, everyone losing shirts, they should lock up crooks that peddle this garbage and lose investors tens of millions while drawing a nice salary

[mightymouse4] 20/9/2018 11:15

Problem is the cash is dwindling and you can't leave a raise until the last minute. They can't back track quick enough from the mess the last fool got them into. The fund raise has to be in the next 3-6 months, at which point we will see single digit share price never to return

[kcr69] 20/9/2018 08:45

Happen to like the business, the products and the 'principle' of its model, and don't buy into the imminent doomsday scenario, however there are fairly severe financial issues to resolve if it is to survive past 2020.

There should undoubtedly be some absolute savings in both marketing and general admin costs from the rationalisation of the territories EVE are trading in, however I believe these need to be in the region of £5m - 10m over the next 2 years along with a doubling of revenue (at low 50% margins) if the business is to get close to profitability in FY20.

The above may be just enough to avoid a cash raise somewhere in FY19 / 20, however a placing / rights issue most definitely cannot be discounted. If it does get through FY20 without a major fund raise then this could look like an absolute steal in the years to come, but won't disagree with anyone who suggests it is a high risk play. Hold a small amount in a SIPP which I will continue to hold. Think the immediate price action will very much depend on what comes out of the analyst call today.

[clocktower] 20/9/2018 08:15

£16.9 million left in June - Cash burning at an alarming rate - How long will that last in the current climate.

The company has to buy its business through marketing, cut the marketing budget, the business will fold in due course imo. Profits are elusive.

[trendspotting] 20/9/2018 08:06

143.90 was the year high.

Currently about 19% up.

Could get very interesting.

[babbler] 20/9/2018 07:56

Closing cash for the period was £16.9m... Doubt that then...