Sales rise 6.5% and profits increase to £20.8m as technology focus drives growth
An uplift in both sales and profit is the headline news from Moonpig’s half-year results with revenue climbing 6.5% to £152.1million, and adjusted pre-tax profits rising to £20.8m.
“Our focus on technology is driving this growth,” ceo Nickyl Raithatha said, “underpinned by our resilient, profitable and cash generative business model, leveraging our unique use of data to drive customer loyalty.”
The group’s trading performance in the six months to 31 October has been underpinned by Moonpig’s online greeting card and gift offer, which grew revenue year-on-year by 4.9%, and has “consistently delivered growth at a mid-single digit percentage rate in recent months” according to the report.
However, the Greetz brand in the Netherlands declined by 9.8% due to the country’s economic downturn, while the Experiences side saw pro forma revenue increase by 4.5% although with lower new voucher sales, but the whole picture saw adjusted pre-tax profit rise from £18.9m a year ago to £20.8m, and the group’s adjusted EBITDA grew to £41.4m from £34.6m following an improved gross margin rate and disciplined cost control.
The report reveals revenue growth has been driven through continued focus on technology innovation, including new features to drive order frequency, such as encouraging traction with Moonpig Plus subscriptions, which are driving consistently higher customer order frequency – and the system is due to be rolled out at Greetz before the end of the financial year.
Nearly four million customers used the online operator’s card creativity features, including video and audio messages, stickers for the inside of cards, emojis, flexible photographs, moveable text boxes and AI-driven customised messages.
And artificial intelligence is being used to personalise recommendations to customers, with a significant upgrade to AI now incorporate customer-level data alongside data from card personalisation into Moonpig’s gift recommendation algorithms.
New features make it easier for customers to attach a gift, such as “perfect pairings” for cards and gifts frequently bought together, suggested add-ons and a redesign of the product details page for gifts and flowers, plus there’s a tailored online journey for every user, including personalised homepage banners and personalised promotions.
During the second half of FY23, the company created a single global team responsible for all designs on greeting cards and personalised gifts such as mugs and balloons. This team manages in-house and licensed designs and remains focused on a programme of negotiation with global licensors to bring internationally-recognised properties to Greetz that already feature on Moonpig.
Current trading remains in line with the group’s overall expectations as consolidated revenue growth in recent weeks has continued the positive trends seen in the first half, underpinned by growth at Moonpig, and the update declared “the external environment remains challenging” but said expectations for full year consolidated revenue and adjusted EBITDA remain unchanged.
Nickyl added: “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.
“We continue to innovate to attract and retain our loyal customers. As the clear online leader in greetings cards, we remain well positioned to benefit from the long-term structural market shift to online.”
