HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2024
Technology driven growth, underpinned by the Moonpig brand
Summary financial results
Six months ended 31 October 2024 | Six months ended 31 October 2023 | Year-on-year growth % | |
Revenue (£m) | 158.0 | 152.1 | 3.8% |
Gross profit (£m) | 93.6 | 89.0 | 5.1% |
Gross margin (%) | 59.2% | 58.5% | 0.7%pts |
Adjusted EBITDA (£m)1 | 41.8 | 41.4 | 0.9% |
Adjusted EBITDA margin (%)1 | 26.5% | 27.2% | (0.7)%pts |
Reported (loss)/profit before taxation (£m) | (33.3) | 18.9 | (276.1)% |
Adjusted profit before taxation (£m)2 | 27.3 | 25.1 | 9.0% |
Earnings per share - basic (pence) | (11.2) | 4.1 | (372.1)% |
Adjusted earnings per share - basic (pence)2 | 6.1 | 5.5 | 10.7% |
1 Before Adjusting Items of £56.7m in H1 FY25 and £1.9m in H1 FY24. See Note 4 and Note 21.
2 Before Adjusting Items of £60.6m in H1 FY25 and £6.2m in H1 FY24. See Note 4 and Note 21. The Group has amended its definition of Adjusting Items to include acquisition amortisation. See the Group's FY24 Annual Report and Accounts, Note 6 and definition of Alternative Performance Measures on page 174 for more information.
Results summary
- Reported revenue increased by 3.8% year-on-year to £158.0m, driven by double digit growth at the Moonpig brand.
- Equivalent to revenue growth of 6.1% year-on-year after adjusting for the prior year impact of temporarily higher breakage on experience vouchers sold during Covid.
- Adjusted EBITDA of £41.8m (H1 FY24: £41.4m) with margin rate above our medium-term target range.
- Adjusted profit before taxation growth of 9.0% to £27.3m (H1 FY24: £25.1m) reflecting growth in trading and lower interest costs.
Strategic and operational highlights
Continued strong trading at Moonpig:
- Moonpig revenue increased by 10.0% year-on-year, underpinned by growth in orders.
- Greetz revenue decrease abated from -5.3% in H2 FY24 to -4.0% in H1 FY25.
- Moonpig and Greetz active customer base grew to 11.7m (October 2023: 11.3m) with frequency growing at 0.9%.
- Moonpig and Greetz total orders grew by 4.7% with average order value rising by 2.5%.
- Revenue in the US, Australia and Ireland grew at a combined 42.5% year-on-year.
Continued technology innovation to drive higher customer lifetime value:
- Moonpig Plus and Greetz Plus subscriptions surpassed our expectations with 750k members (October 2023: 200k).
- Database of customer occasion reminders grew to 96 million (October 2023: 82 million).
- Use of creative features increased by 53% year-on-year to 6.5 million in H1 FY25 (H1 FY24: 4.3m).
Enhanced deployment of AI to personalise customer experience:
- Incorporated AI generated product descriptions, improving search functionality for more relevant card and gift results.
- Launched live inference technology, which analyses customer message sentiment to enhance our gift recommendations.
- Launched AI handwriting in December 2024, enabling customers to add their own handwriting for use as a font.
Continued execution against our transformation plan for Experiences:
- Focus on enhancing the consumer proposition and on technology feature development to drive revenue growth.
- Trading conditions remain difficult. In the context of the challenging macroeconomic environment, we now expect a longer timeline for fully realising the revenue growth potential of Experiences. This is reflected in the £56.7m non-cash charge for the impairment of Experiences goodwill at 31 October 2024, classified as an Adjusting Item.
Strong cash generation enabling dividends and share buyback:
- Inaugural interim dividend of 1.0p per share (H1 FY24: nil).
- Share buyback programme of up to £25m ongoing through H2 FY25.
- We expect net leverage of approximately 1.0x as at 30 April 2025.
Outlook
Moonpig Group current trading remains in line with our expectations. Growth has been underpinned by consistent strong sales and orders at Moonpig and is supported by steady progression at Greetz. Given ongoing macro headwinds in gifting, trading remains challenging at Experiences and we remain focused on delivering our transformation plan. Accordingly, our expectations for full year revenue remain unchanged.
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 continue to target double digit percentage annual revenue growth. To reflect continued growth of high-margin revenue streams such as Plus subscription fees, we have increased our medium-term target for Adjusted EBITDA margin from a range of 25% to 26% to a range of 25% to 27%. We continue to target growth in Adjusted earnings per share at a mid-teens percentage rate.
Nickyl Raithatha, CEO, commented
"We are pleased to report continued growth in revenue for the Group, driven by double-digit revenue growth at the Moonpig brand. Moonpig’s performance has been underpinned by robust growth in order volumes, powered by our multi-year investments in technology and innovation and the structural market shift to online. Raising our medium-term profit margin target demonstrates our confidence in the outlook for the business.
We continue to innovate to attract and retain our loyal customers. To date, over 17 million innovative card creativity features have been used to customise our cards, including audio and video messages, AI-generated text suggestions, stickers, flexible photos and digital gifting solutions.
Ahead of Christmas, we are excited to have launched 'Your Personalised Handwriting,' an AI-driven feature that allows customers to add their own handwriting to our cards. By creating their handwriting as a font saved to their Moonpig account, customers can type a message and see their handwriting seamlessly appear within the card. This launch is a key step in our roadmap of innovative features, leveraging emerging AI technologies to enhance the card-giving experience."
Investor and analyst meeting
The full year results presentation will be available on the Investor Relations section of Moonpig Group's corporate website (www.moonpig.group/investors) shortly after 7:00am on 10 December 2024.
Nickyl Raithatha (CEO) and Andy MacKinnon (CFO) will host a Q&A for analysts and investors via webcast at 9:30am. Please note that the presentation will not be repeated during the webcast.
Analysts wishing to register for the event should email investors@moonpig.com.
Investors wishing to listen to the Q&A should register via the following link:
Enquiries:
Brunswick Group
Sarah West, Fiona Micallef-Eynaud, Sofie Brewis
+44 20 7404 5959
moonpig@brunswickgroup.com
Moonpig Group
Nickyl Raithatha, Chief Executive Officer
Andy MacKinnon, Chief Financial Officer
investors@moonpig.com
pressoffice@moonpig.com
About Moonpig Group
Moonpig Group plc (the "Group") is a leading online greeting cards and gifting platform, comprising the Moonpig, Red Letter Days and Buyagift brands in the UK and the Greetz brand in the Netherlands. The Group's leading customer proposition includes an extensive range of cards, a curated range of gifts, personalisation features and next day delivery offering.
The Group offers its products through its proprietary technology platforms and apps, which utilise unique data science capabilities designed by the Group to optimise and personalise the customer experience and provide scalability. Learn more at https://www.moonpig.group/.
Forward Looking Statements
This announcement contains certain forward-looking statements with respect to the financial condition, results or operation and businesses of Moonpig Group plc. Such statements and forecasts by their nature involve risks and uncertainty because they relate to future events and circumstances. There are a number of other factors that may cause actual results, performance or achievements, or industry results to be materially different from those projected in the forward-looking statements.
These factors include general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance of programmes, or the delivery of products or services under them; industry; relationships with customers; competition and ability to attract personnel. You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement. We undertake no obligation to update or revise any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances.