Moonpig has posted plummeting sales as shoppers started buying gifts and greetings cards elsewhere once bricks-and-mortar shops reopened once more over the past year.
In full year results to 30 April 2022, the firm admitted its group revenue had tumbled 17.3 per cent year-on-year, standing at £304.3m versus £368.2m in 2021.
The online retailer pointed to the comparative period of “severe lockdown restrictions” last year and said revenue was 75.8 per cent higher on a two-year comparative basis.
Adjusted EBITDA also dropped by around 19 per cent over the past year, at £74.9m compared to £92.1m the year prior, while adjusted profit before tax dropped around 30 per cent to £51.5m versus £74.6m.
“It’s been a difficult period for Moonpig following its floating last year, so despite these results not being entirely surprising, they will still be concerning to both the company and its investors,” Chartered Institute of Marketing CEO Chris Daly said.
Shares dipped almost two per cent in early trading on Wednesday morning.
“In spite of revenues down 17 per cent on last year, Moonpig continues to dominate the online cards industry, with its market share 4.4x times larger than its nearest competitor in 2021,” Neil Shah, director of research at Edison Group noted.
The company said it was confident the greetings card business will be resilient against inflationary pressures and reiterated its financial guidance.
Moonpig, which made its debut on the London Stock Exchange early last year in a £1.2bn valuation, said cards had “historically demonstrated very high resilience to economic recession.”
“We expect gifting in general to be more resilient than consumers spending on themselves, and in the current economic environment we will ensure our range continues to reflect changing consumer needs,” the company stated on Wednesday morning.
Low price points and focusing on special occasion buying patterns would help support such “durability,” it added.
The business was pleased with trading at the start of the financial year and placed revenue for 2023 to be around £350m, following an anticipated completion of its Buyagift takeover by the end of July.
“Our first full year as a listed company has been another transformational period for Moonpig Group – financially, operationally and strategically,” Moonpig CEO Nickyl Raithatha said.
“We remain confident in the outlook for the current year, with our loyal customers continuing to rely on Moonpig to connect with loved ones at moments that matter. The long-term opportunity remains vast and we have never been in a better position to capture it.”