In half-year results for the six months to 31 October, Moonpig Group posted turnover up 3.8% at £158m, while adjusted EBITDA nudged up by just under 1% to £41.8m.
Moonpig noted that the prior year sales figure had been flattered by “temporarily higher breakage on experience vouchers sold during Covid”, and the equivalent sales increase was 6.1% if this was taken into account.
The group said its revamp of the Experiences wing was going to plan, but trading conditions remained challenging “with significant macroeconomic headwinds” crimping expected sales growth.
As a result the group has made a £56.7m non-cash charge for the impairment of goodwill at Experiences, propelling it to a pre-tax loss of £33.3m.
The group expanded into gift experiences in 2022 with the £124m acquisition of Smartbox Group.
At the group’s other trading brands sales were up 10% at Moonpig, while Greetz sales were down 4%.
Subscriptions across both brands rocketed, increasing from 200,000 in October 2023 to 750,000.
The database of customer reminders increased by 17% to 96m, while the active customer base increased from 11.3m to 11.7m.
Moonpig said it had taken measures to address issues with the delivery performance of postal service providers in both the UK and the Netherlands.
“We have launched new address validation functionality to increase delivery success rates. We have introduced early despatch for future-dated orders, which helps prevent delays and means that orders can still reach customers on time where the postal service provider is not meeting required service levels.”,
The group is also trialling “new tracked delivery options for card orders at affordable price points”.
Moonpig Group is using AI to boost its offering in a variety of ways, including product searches and for analysing message sentiments for gift recommendations.
A major new AI feature just launched by Moonpig is AI handwriting. This allows customers to use their own handwriting as a font.
The group has also insourced UK balloon fulfilment which will improve gross margins and is preparing to launch personalised balloons onto the UK market.
This product line is already a popular choice at continental wing Greetz.
A new strategic partnership with The Entertainer for children’s toys also went live during the period, providing access to leading toy brands “without inventory risk”.
Moonpig is planning to add new category partnerships in other verticals such as books, health and beauty, and homeware.
The group has also raised its medium-term profit targets, which CEO Nickyl Raithatha said “demonstrates our confidence in the outlook for the business”.
“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,” he explained.
The group also announced an inaugural interim dividend of 1.00p per share, and a share buyback programme of up to £25m that will take place during H2.
Moonpig shares fell on the news and were down 11.78% at 236.00p at the time of writing (52-week high 277.50p, low: 146.80p).
