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Moonpig sees annual sales and profits double thanks to lockdown but shares in online greeting card retailer tumble on gloomy outlook

This Is Money logo This Is Money 27/07/2021 Camilla Canocchi for
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Online retailer Moonpig saw annual revenues and profits more than double during the pandemic as the national lockdowns sent greeting card customers online.

But the company, which listed on the London Stock Exchange earlier this year, saw shares fall more than 9 per cent as it said sales growth is forecast to slow now that restrictions have eased in the UK and Netherlands, its two major markets. 

Revenues for the year to the end of April more than doubled to £368million, while pre-tax profits went from £33.2million to £74.6million. However, if including the cost of its recent IPO, profits rose by just 3 per cent to £32.9million. 

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But Moonpig said it expected sales in the current financial year to be around £250million to £260million.

That would be a big reduction compared to its most recent year, but it would still be 45 per cent to 50 per cent higher than before Covid.

Shares in Moonpig, which floated on the London Stock Exchange at 350p per share in February this year, fell by around 6 per cent in morning trading and were down by a larger 9.3 per cent to 385p after market close on Tuesday.   

'The pandemic sent Moonpig flying in terms of sales, with revenue more than doubling in the twelve months to the end of April,' said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

'But with plans to spend big on marketing to hang onto newly acquired customers as revenue growth is forecast to slow, shares have fallen by 6 per cent in early trading.'

The business said that restrictions had eased slowly in the UK and the Netherlands, its two main markets, putting the start of its financial year "moderately ahead of expectations". 

Founded by entrepreneur Nick Jenkins in 2000, Moonpig sells digital greetings cards, physical cards and flowers online. 

Its products flew off the shelves during the pandemic as the company both attracted new customers and won more businesses from previous customers. 

It said it delivered 50.9million orders in the twelve months to the end of April, while it saw its 'strongest ever week' in February as customers flocked to its site to buy Valentine's Day cards and gifts. 

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But with shops in its main markets of the UK and Netherlands now open, the company said that the frequency with which customers buy from its site is 'starting to normalise' from the high levels seen during Covid. 

'As society emerges from lockdown, and certain customer behaviours such as purchase frequency start to normalise, we will see a reduction in headline revenue,' it said. 

However, it does not expect to lose all the business. 'Customer purchase frequency' is expected to stay around 5 per cent higher than before Covid-19.

'In the past year we have delivered an enduring transformation and step-change in the scale of our business,' said chief executive Nickyl Raithatha.

'The long-term growth opportunity remains vast, with the majority of the card and gifting market still offline, and we have never been in a better position to capture this growth.'   


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