Subscription service ‘exceeds expectations’ as tech investments help grow revenue to £341m
A strong performance at Moonpig has grown the group’s full-year revenues by 6.6% to £341.1million after investing in innovation and technology which has fostered “extraordinary” customer loyalty, according to the company.
Nickyl Raithatha, ceo at the online greeting card and gift retailer, said its Moonpig Plus subscription scheme has “exceeded our expectations, passing the milestone of half a million members within one year”, in the report released yesterday, 27 June, of its full-year results to 30 April.
Alongside the revenue growth, adjusted pre-tax profit increased to £58.2m from a prior £55.4m as stronger trading was offset in part by higher interest charges and the amortisation of technology platform investments.
Nickyl commented: “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 group said trading since the start of the new financial year has been in line with expectations with an increase in new and existing customer orders, and it now expects the year’s revenue growth to be at a mid to high single-digit percentage rate.
Nickyl added: “Our investments in new AI technologies are delivering an increasingly personalised experience for our customers,” and said the group is “well positioned to benefit from the long-term structural market shift to online”, with its Netherlands-based Greetz arm launching Greetz Plus in January 2024 and “following a similar encouraging trajectory” to the UK.
Strategic and operational highlights included that organic growth accelerated through the year underpinned by Moonpig, which grew revenue by 8.2% through growth in both orders and average order value.
And the report explained the group is highly cash-generative, with operating cash inflows of £74.2m against the previous year’s £56.2m, as 89% of Moonpig and Greetz revenue being delivered from existing customers – the same level as in FY23.
With the continued drive to deliver higher customer lifetime value, its database of customer occasion reminders has grown to 90m from 84m in April 2023, and the creativity features were used over 10m times to add video and audio messages, sticker images, digital gift vouchers and ai-driven customised messages to the inside of greeting cards.
For the new financial year, the group intends continuing to prioritise investment to drive its growth strategy execution and expects to have the financial flexibility to consider returning excess capital to shareholders.
On the outlook front, the statement said: “Trading since the start of the year has been in line with our expectations with both new and existing customer orders in growth. In the context of the current macroeconomic environment, we expect 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.
“Our business is well positioned to deliver sustained growth in revenue, profit and free cash flow, driven by our continued focus on data and technology. With respect to the medium-term, we are 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.”
