Moonpig Group Shares Fall 12% After Loss Report

Shares of Moonpig Group dropped over 12% on Tuesday after the online retailer revealed a loss for the six months ending October 31.

The group recorded a pre-tax loss of £33.3 million, contrasting with a profit of £18.9 million during the same period in 2023.

This significant reversal was largely due to a £56.7 million non-cash impairment related to goodwill in its Experiences segment, which has struggled amidst challenging macroeconomic conditions.

Despite the losses, Moonpig announced its first interim dividend of 1.0p per share, signaling a new phase in its financial strategy. The company also continues an ongoing share buyback program of up to £25 million, aiming to balance shareholder returns with growth investments.

The company's revenue saw a 3.8% year-on-year increase, reaching £158 million. Growth was primarily driven by its core UK market, where revenue rose by 10%. However, this growth was somewhat offset by declines in its Greetz brand in the Netherlands and a 20.8% revenue drop in its Experiences division.

The goodwill impairment, along with broader economic challenges impacting discretionary consumer spending, significantly affected the company.

Moonpig expressed resilience and future potential, emphasizing growth in high-margin sectors like its Moonpig Plus subscription service, and increasing customer engagement through technological innovations.

“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,” the company stated.

Moonpig retains optimism regarding medium-term growth, aiming for a double-digit percentage annual revenue growth rate and an increased EBITDA margin target of 25%-27%, up from 25%-26%.