Smith & Williamson picks up Eve Sleep audit from KPMG

AIM listed Eve Sleep, the online mattress and sleep retailer, has swapped auditors with the appointment of Smith & Williamson, replacing KPMG

This follows a competitive audit tender process and the board has approved the appointment of Smith & Williamson LLP to replace the Big Four firm as auditor for the financial year ending 31 December 2019. The announcement was confirmed in the company’s half year results.

KPMG was appointed as auditor in 2015 ahead of the company’s listing on AIM market, in 2017. In the company’s 2019 Annual Report and Accounts, the audit committee reported stated that it planned to reappoint KPMG as auditor and that ‘the Group will be required to put the external audit contract out to tender no later than 2025’.

However, it has now completed a competitive tender and changed auditor, ending its Big Four audit contract. According to the 2018 annual report, KPMG was paid £65,000 for the year end audit, £61,050 for tax advisory services and £236,502 for tax compliance services.

Sleep Eve designs and sells eve-branded mattresses and other sleep products, including pillows, sheets and duvets, and was set up in 2014, and listed on AIM in 2017 with a market capitalisation of £140m.

The company reported £34.8m group revenues with gross profit of £18.4m for year end 2018 but has grown fast since it was set up and is now realigning its business. It will now focus on only three geographic territories – UK, Ireland and France – and cutting its marketing and advertising spend.

The group reported an underlying EBITDA loss of £5.9m in the six months ended 30 June 2019 (30 June 2018: £11.9m loss) and an operating cash outflow of £5.4m (30 June 2018: £9.7m outflow), warning that year end revenue would be impacted by the tough UK retail market and Brexit risks.

It recently extended its retail partnership with Next Home to cover 158 stores and signed other deals with Argos and Dunelm, while a partnership with Homebase is set to be signed shortly.

In accordance with section 519 of Companies Act 2006, KPMG has deposited a statement with the company detailing the circumstances connected with their ceasing to hold office as auditor of the company. KPMG’s statement confirmed that the firm was not aware of any circumstances connected with ceasing to hold office. 

 

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