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Moonpig has laid out its plans for continued growth while reporting solid results for last year that saw both its revenue and profits increase.
In the results for the year to 30 April 2024, the PLC reported revenue of £341.1m, up 6.6% on last year.
Its reported pre-tax profit of £46.4m was up 32.9% year-on-year while its adjusted pre-tax profit was £58.2m – up 5% year-on-year, which it said reflected stronger trading offset in part by higher interest charges and the amortisation of technology platform investments.
Adjusted EBITDA was £95.5m, compared to £84.2m a year ago, reflecting revenue growth and improved gross margin rate.
The business said organic revenue growth accelerated through the year and was underpinned by the Moonpig brand, which grew revenue by 8.2% through growth in both orders and average order value.
New customer revenue returned to growth at Moonpig in the second half of the year.
It also saw an improving trajectory at Greetz, with revenue declines abating to 5.3% in H2 FY24 from 9.8% in H1 FY24 and 20.4% in FY23.
Across Moonpig and Greetz, order volumes improved from a decrease of 5.1% in H1 to an increase of 5.2% in H2 FY24.
At Experiences, pro forma revenue increased by 1.5% year-on-year to £48.6m. This included mid-single-digit million upside from temporarily higher breakage on gift boxes and vouchers that were sold during Covid with extended expiry dates. Moonpig said these expiry dates have now passed, so this benefit is not expected to recur in future years.
The group said it remained strongly cash generative, with operating cash inflows of £74.2m, compared to £56.2m a year ago. It also reported significant liquidity and covenant headroom, with a new £180m four-year, committed revolving credit facility in place.
Moonpig Plus subscriptions surpassed the company’s expectations, with over half a million members within a year of launch. Greetz Plus, meanwhile, launched in January 2024 and was following “a similar encouraging trajectory to the UK”.
Same-day gifting was launched on Moonpig, by combining e-cards with new digital gift experiences. The group said it had seen “encouraging early traction” across peak event days so far.
Furthermore, the technology re-platforming of the Red Letter Days and Buyagift websites continued at pace, with a full rebuild of the front end now complete.
The business has also enhanced the deployment of AI to personalise the customer experience, with a significant upgrade made to its algorithms by incorporating individual customer level data into its gift recommendation engine, “unlocking the ability to show different price ranges to different cohorts”.
Personalisation elements have also been introduced into all parts of the journey, including homepage banners and promotions unique to the individual customer.
CEO Nickyl Raithatha said: “We are delighted that the group has delivered full-year growth in both revenue and profit, with trading performance strengthening across our peak trading periods in the second half of the year.
“This has been driven by our multi-year investments in technology and innovation, which continue to foster extraordinary customer loyalty.
“The Moonpig Plus subscription scheme has exceeded our expectations, passing the milestone of half a million members within one year.
“Our investments in new AI technologies are delivering an increasingly personalised experience for our customers. As the clear online leader in greetings cards, Moonpig Group is well positioned to benefit from the long-term structural market shift to online.”
The company said it remained disciplined in its approach to the allocation of capital and continued to prioritise organic investment to drive growth, including investment in technology and marketing.
“Future investments may extend to new geographical markets, contingent upon achieving optimal customer acquisition costs and confidence in customer lifetime value,” the business stated.
“We will also selectively consider value-accretive M&A opportunities, maintaining a high threshold for strategic and financial returns.”
The business said trading since the start of the year had been in line with its expectations, with both new and existing customer orders in growth.
In the context of the current macroeconomic environment, it said it expected FY25 revenue growth (after adjusting for temporarily higher breakage on experience vouchers in FY24) at a mid to high single digit percentage rate, underpinned by growth in orders at the Moonpig brand.
The business is well positioned to deliver sustained growth in revenue, profit, and free cash flow, driven by its continued focus on data and technology. In the medium-term, it is targeting double digit percentage annual revenue growth, an adjusted EBITDA margin rate of approximately 25% to 26%, and growth in adjusted earnings per share at a mid-teens percentage rate.
Moonpig’s share price was up by 12.7% to 179p at the time of writing at lunchtime today (27 June) (52-week high: 191.40p, low: 142.10p).
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