Moonpig backs FY guidance as first-half profits rise

Online gifts and greeting cards retailer Moonpig backed its full-year guidance on Tuesday as it reported a jump in first-half profits.

In the six months to the end of October, reported pre-tax profit rose 107.8% to £18.9m, while adjusted pre-tax profit was up 9.7% to £20.8m. Moonpig said the latter reflects stronger trading, offset in part by higher interest charges and the amortisation of technology platform investments.

Group revenue grew 6.5% to £152.1m.

The company said its performance was underpinned by the core Moonpig brand, which saw revenue rise 4.9% year-on-year and has consistently delivered growth at a mid-single digit percentage rate in recent months.

Revenue at Greetz - the Dutch business it bought in 2018 - fell 9.8% year-on-year in the first half, meanwhile, "with a continued trajectory of improvement in trading". At Experiences, pro forma revenue was up 4.5%, albeit with lower new voucher sales.

The group highlighted "encouraging" traction with Moonpig Plus subscriptions, which are driving consistently higher customer order frequency. Greetz Plus subscriptions are scheduled for roll-out in the second half of this year.

Chief executive Nickyl Raithatha said: "We are pleased to report year-on-year growth in both revenue and profit despite the challenging macro-economic environment, marking the group's return to revenue growth. Our focus on technology is driving this growth, underpinned by our resilient, profitable and cash generative business model, leveraging our unique use of data to drive customer loyalty.

"We continue to innovate to attract and retain our loyal customers. During the period nearly 4 million customers used our innovative card creativity features such as audio and video messages, AI-generated text suggestions, stickers, flexible photos and digital gifting solutions. As the clear online leader in greetings cards, we remain well positioned to benefit from the long-term structural market shift to online."

Russ Mould, investment director at AJ Bell, said: "What will encourage investors is a material increase in the number of subscribers to its Moonpig Plus services, as this could help make its revenue profile more predictable."