Sales slump 17.3% but online specialist praises greeting cards ‘very high resilience’ to economic recession
With customers returning to bricks-and-mortar shops, online greetings and gift specialist Moonpig has unsurprisingly posted a significant decline in sales for the year to 30 April, 2022.
Released yesterday, 29 June, Moonpig’s final results announcement for the past 12 months showed its revenue of £304.3million was down 17.3% over the previous year’s £92.1m, while adjusted profit before tax dropped around 30% to £51.5m from £74.6m.
On the plus side, the company stressed it has increased its UK market share of the online single greeting card sector from 60% to 68% over the last two years, with a very high customer retention rate – 87% of the group’s total revenue was derived from existing customers, growing from 79% in 2020, and 75% in 2021.
The report stated: “We remain confident in the outlook for the year ahead, as the loyalty of the group’s customer relationships drives recurring revenue from each annual customer cohort and greeting cards have historically demonstrated very high resilience to economic recession.”
On the gift sales side revenue has increased from 41.7% in FY20, to 46.1% in FY21 and 47.7% in FY22, hitting its highest-yet share of the company’s total revenue at 48% with the company saying this is “reflecting further progress in our strategy to become the ultimate gifting companion”, something which Moonpig is looking to build on with its soon-to-be-completed acquisition of Buyagift.com.
Based on the deal’s successful conclusion by the end of July, the company expects revenue for the enlarged group to be around £350m this financial year, saying: “We are pleased with the start to the new financial year and remain confident in our existing expectations for group trading in FY23.”
Highlighting the comparative period of “severe lockdown restrictions” last year, Moonpig said revenue was 75.8% higher on a two-year comparative basis, and added it was confident the greeting card business will be resilient despite surging inflationary pressures, while saying it has seen “no material impact on gross margin rates from cost inflation”.
Moonpig chief executive Nickyl Raithatha said: “Our first full year as a listed company has been another transformational period for Moonpig Group – financially, operationally and strategically. We have significantly outperformed the targets set out at IPO, and recently announced the proposed acquisition of Buyagift, which will accelerate our journey to becoming the ultimate gifting companion.
“Moonpig Group has delivered an enduring uplift in revenue over the past two years, with a step-change in the size of our customer base, and with each of our customers purchasing more often than before. We have further extended our market leadership in online cards, demonstrating the strength of our data-led business model and validating our significant investments in technology. Our gifting business has grown by over 100% in the past two years, and we are able to adapt with speed and agility to any changing consumer behaviours.
“We remain confident in the outlook for the current year, with our loyal customers continuing to rely on Moonpig to connect with loved ones at moments that matter. The long-term opportunity remains vast and we have never been in a better position to capture it.”
With its new Tamworth distribution facility operating at a capacity of 9,000 cards per hour, the report presented by chief financial officer Andy MacKinnon boasted the platform is “increasingly diverse and international’, offering its largest-yet range of greeting cards, with over 43,000 designs on its Global Design Platform against 27,000 in April 2021, and Irish designers were sourced to support the Moonpig Ireland launch, creating 1,200 unique designs for the new market including 400 Irish language cards.
And it added: “Our diverse card range is very inclusive, reflecting a broad selection of life and religious celebrations, as well as depicting multiple ethnicities, so that whoever our customers are they can find a card which is authentic to them.”
Top: Moonpig’s full-year results show a 17.3% sales slump
