Shares in Moonpig (MOON) rise despite sales slipping
By Rob Griffin
13:28, 9 December 2021
Shares in greetings card maker Moonpig soared today – even though the company admitted sales were lower than last year’s coronavirus-inspired boom.
The online retailer reported revenue of £142.6m for the six months to 31 October 2021, which was 8.5% lower than the same period last year.
But it pointed out this figure was still more than double the £66.3m achieved in the first half of 2019, illustrating the company’s strong growth.
Upper end of guidance
The company also group annual revenue for the full year 2022 was now expected to be at the upper end of the £270m to £285m guidance.
The news went down very well in the markets with the company’s stock price rising almost 6% to 378p by 1.30pm in London.
Over the medium-term Moonpig also continues to target underlying annual revenue growth in the mid-teens, with an adjusted EBITDA (earnings before interest, tax, depreciation and amortization) margin rate of approximately 24% to 25%.
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Opportunity remains vast
Chief executive Nickyl Raithatha said the results demonstrated even stronger customer retention and its highest-ever proportion of revenue from gifting.
“With revenue more than doubling over the past two years, we are confident that we have achieved an enduring transformation in the scale of our business,” he said.
Raithatha also pointed out the company’s new technology and data platform makes it easier for customers to remember, find, create and send the perfect greeting card and gift.
“The long-term opportunity remains vast, and we have never been in a better position to capture this growth,” he added.
Moonpig’s statement revealed a reported pre-tax profit of £18.7m for the first-half. This is 43% lower the £33m for the corresponding period last year, but 147% up on the £9.4m in 2019.
Confounded critics
According to Russ Mould, investment director at AJ Bell, these results enable Moonpig to confound critics that said last year’s revenue boost was a one-off due to Covid-19.
“It essentially says there has been a structural shift in how people buy greetings cards with more people now purchasing online, and more frequently,” he said.
While acknowledging overall revenue is down on the same period last year, he point out that big gains have been made over two years.
“Strategically everything is falling into the right place which explains why investors have given the thumbs up to its latest results,” he added.
Read more: Card Factory shares jump as retailer reports sales recovery
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