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Moonpig sees sales surge as it reaps the rewards of expanded range and investment in data

Moonpig: flying high on wings of data (image: Moonpig)

Online greetings card and gifting company Moonpig has seen revenue grow 75.8% across two years, hitting £304m, with pre-tax profits up 40%. 

Despite revenue being down 17% on 2021, the company has seen continued growth in its customer base, higher and more frequent customer spending and high retention rates. 87% of the Group’s total revenue derived from existing customers (FY20: 79%, FY21: 75%).

Across the year, the company delivered 39.8 million orders and has seen investment in technology pay dividends. App use grew by 43%, while proprietary data and AI technologies were used to ramp up reminders to 70 million a year from 50 million in 2020. The technology also help the retailer continue its progress towards a “hyper-personalised” customer journey, including personalised landing pages for  customers who click on a reminder, upcoming occasion reminders on our home-page and personalised search results. 

The company has also expanded what it sells, with tie ups with Kath Kidstson for flowers, the launch of a UK jewellery range with brands including Lisa Angel, Posh Totty and Joma Jewellery, and 500 new branded gifting SKUs at Greetz including Toblerone and Miss Patisserie. 

The company is also now proposing the purchase of Buyagift, the UK’s leading gift experience platform, which would, the company says,  deliver a step-change in its gifting proposition. The acquisition is at an attractive valuation with cash consideration of £124m, compared to an unaudited FY22 EBITDA of £14m and is expected to drive over 20% accretion to annualised Adjusted EPS from acquisition. The acquisition is on track to complete by the end of July 2022. 

Nickyl Raithatha, Moonpig CEO, comments: “Our first full year as a listed company has been another transformational period for Moonpig Group – financially, operationally and strategically. We have significantly outperformed the targets set out at IPO, and recently announced the proposed acquisition of Buyagift, which will accelerate our journey to becoming the ultimate gifting companion. 

“Moonpig Group has delivered an enduring uplift in revenue over the past two years, with a step-change in the size of our customer base, and with each of our customers purchasing more often than before. We have further extended our market leadership in online cards, demonstrating the strength of our data-led business model and validating our significant investments in technology. Our gifting business has grown by over 100% in the past two years, and we are able to adapt with speed and agility to any changing consumer behaviours. 

“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.” 

Neil Shah, Director of Research at analysts Edison Group adds:  “In spite of revenues down 17% 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. Moongpig’s efforts to expand into online gifting have paid off, with the company reports its highest ever gifting share of total revenue, at 48%. The expansion of its gifting range into flowers and plants, including the Cath Kidston range, the launch of 500 new branded gifting SKUs and the introduction of a UK jewellery range have all played an important role in driving forward this revenue. With customers increasingly looking for a one-stop shop to purchase cards and gifts for loved ones, Moonpig’s integration strategy delivers this with ease. The company has worked hard to heavily invest in its technology and data platform, with the app providing 43% of Moonpig orders, driven by customer incentives to use the app and investment in to a ‘hyper-personalised’ customer journey. With people on-the-go post lockdown, mobile purchases should continue to be a priority for the company.”

Shah concludes: “The outlook for Moonpig looks promising, with an anticipated completion of the acquisition of Buyagift, a leading UK-based experience day gifting company, expected to complete by the end of July this year. This acquisition is expected to enlarge Moonpig’s revenue to £340m in FY23. The company will continue to target mid-teens as they look to enlarge the group. At a time when rising inflation rates and the cost-of-living crisis are impacting customer expenditure across the UK, Moonpig must continue to capitalise on the convenient, cost-friendly offer it provides to continue driving sales during these challenging macro-economic times.”

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