Investors in hipster mattress company Eve Sleep could be in for a rough night's sleep tonight, as profitability continues to evade the fast-growing business.
Revenue more than doubled to £11.5m in the first half of the year, with an improved margin helping to push gross profit up to £7m.
But underlying earnings fell to £6.9m, compared to £3.2m last year. With the added cost of the IPO, pre-tax loss came in at £9.1m for the period.
Shares were relatively flat on the news, falling from 81p to 80.5p.
Why it's interesting
Analysts at Peel Hunt said the deepening losses were in line with their expectation that the firm would lose £13.9m this year before IPO costs. They also praised the brand's increased visibility in the sector.
"Success in driving brand awareness has fed into the branded mattress search within Google, pushing Eve ahead of Dreams, Silent Night and Tempur for the first time."
A rash of mattress startups appeared on the scene this year, prompting the question of which one would come out top. Eve is currently a contender for that crown, having usurped IKEA to become the UK's eighth most recalled mattress brand.
Expansion into new products has also helped the company to maintain its impressive growth rate. Sales of non-mattress products such as pillows and bed frames increased 500 per cent to contribute 10 per cent of underlying revenue.
What Eve Sleep said
Chief executive and founder Jas Bagniewski said: "We are a young company with much to prove in the £26bn European sleep market. While the broader furniture market including mattresses has been slow to transition to online purchase, the pace of change is now starting to accelerate. The combination of our compelling customer proposition, digital expertise and brand strength, combined with our scalable low cost business model, gives me confidence that we will win out over traditional and new operators and deliver for all of our shareholders."