Moonpig Group (LSE: MOON) announced a substantial increase in sales, leading to a 4% jump in share value during early trading in London. The popular online greeting cards and gifts company witnessed a rise in profits despite facing challenges such as reduced card purchases and customers opting for less expensive presents.
In the fiscal year ending in April, Moonpig reported a notable 5.2% growth in group revenue, reaching £320.1 million compared to the previous year’s £304.3 million. The increase can be attributed to the higher prices of greeting cards and fewer promotional discounts. The average order value across Moonpig’s UK website and the Netherlands-based brand Greetz rose from £7.70 to £8.20.
Moonpig’s customer base primarily consists of existing clients rather than new ones. However, the average selling prices of gifts like flowers, chocolate, wine, and champagne declined as customers chose more affordable options amidst economic pressures.
The FTSE All-Share listed firm faced several challenges, including a nearly 15% decrease in order numbers across its online card brands. Moonpig attributed this decline, in part, to the economic downturn since October, following a volatile mini-budget. Additionally, Royal Mail strikes had a negative impact on trading leading up to Christmas, with postal workers staging walkouts across the country.
Moonpig’s Chief Executive, Nickyl Raithatha, acknowledged the need for innovation to set Moonpig cards apart. Raithatha stated, “We are innovating to differentiate and elevate Moonpig cards with embedded video messages, personalised content, and the ability to include a gift experience within the card.”
Despite the overall positive sales performance, Moonpig reported a 12.6% decrease in pre-tax profit from £40 million to £34.9 million for the year. The decline was attributed to higher costs resulting from the acquisition of an experienced arm and increased investment in technology. The company was also affected by higher interest rates.
