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Moonpig has remarked on its “resilient profitability and robust cash generation” in its full-year results, which saw the company’s revenue grow as it increased the prices of its cards, but its profits dropped.
In the results for the year to 30 April 2023, the PLC reported revenue of £320.1m, up 5.2% on last year, but pre-tax profit of £34.9m, down 12.6% year-on-year. Adjusted EBITDA was up 12.4% to £84.2m.
Moonpig brand and Greetz revenue decreased year-on-year by 8.5% to £278.5m although management estimated that the previous year’s revenue had included approximately £39m resulting from the impact of Covid lockdowns on customer order frequency.
The macroeconomic downturn from October 2022 onwards was said to have affected the level of orders from new customers in the UK and the Netherlands while there was also “a more limited impact” in the UK from industrial action at Royal Mail, which affected trading in the months leading up to Christmas 2022.
Ultimately, while orders decreased by 14.9% year-on-year, the average order value increased by 7.6%, reflecting card price increases and more targeted use of promotional discounting, offset in part by lower average selling prices on gifting as customers traded down to cheaper price points in view of macroeconomic pressures.
Experiences revenue made up the remaining £41.6m of the total figure.
Moonpig described the period as “a milestone year establishing key capabilities to drive future growth” that saw it scale its technology team to 250 roles, from 195 in April 2022, and open new operational facilities in Tamworth, as well as Almere in the Netherlands.
It saw continued customer acquisition across its brands, with revenue from new customers at Moonpig and Greetz of £31.7m, remaining ahead of pre-pandemic levels (FY19: £23.9m).
It also delivered significant operational improvements at Experiences, including appointing a new leadership team and investing in the technology platform.
Finally, the year saw the full launch of Moonpig Plus, the company’s low-cost subscription service, innovation to differentiate and elevate Moonpig cards, and the introduction of the ability to use digital codes for gift experiences in Moonpig cards.
CEO Nickyl Raithatha said: “Today’s results demonstrate the resilience of our business model which is rooted in the stability of the greeting cards market and our unique use of data to drive customer loyalty.
“We have high profitability, strong cash generation and inherent flexibility that allows us to respond rapidly to a dynamic macroeconomic environment. We are innovating to differentiate and elevate Moonpig cards with embedded video messages, personalised content, and the ability to include a gift experience within the card.
“We have continued to extend our market leadership in online cards and we expect to return to growth during the year ahead, underpinned by our continued investments in our technology, marketing and operational capabilities.
“As the clear online leader in greetings cards, Moonpig Group is well positioned to benefit from the long-term structural market shift to online.”
Trading since the start of the year has been in line with Moonpig’s expectations. In the context of the current macroeconomic environment, it said it expected its pro forma revenue to grow at “a low single digit percentage rate” in the first half of FY24, underpinned by the Moonpig brand, which has been in growth since March.
For the full financial year, it is expecting consolidated revenue growth at “a mid to high single digit percentage rate”, with all of its brands returning to growth in the second half. Adjusted EBITDA margin is expected to remain resilient.
Moonpig’s share price was up by 6.16% to 146.40p at the time of writing at lunchtime today (29 June) (52-week high: 248.01p, low: 102p).
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