- Momentum behind core brand
- Greetz back to growth
- Full-year guidance reiterated
Shares in online greeting cards-to-gifting platform Moonpig (MOON) rallied 6% to 209.5p after the company reported continued strong trading in the core business and a return to growth for Dutch brand Greetz which removes a drag on group-level momentum.
Despite the uncertain consumer backdrop, Moonpig insisted it was on track to deliver full-year 2026 guidance of mid-single digit EBITDA (earnings before interest, tax, depreciation and amortisation) growth and earnings per share growth in the 8% to 12% range, with strong free cash flow funding dividends and a £60 million share buyback.
POSITIVE MOMENTUM
In an AGM (annual general meeting) trading update, Moonpig said revenue growth for the eponymous brand was tracking at 10% in the first 20 weeks of the new financial year, and in a major milestone, Greetz had returned to ‘modest’ year-on-year growth.
Encouragingly, Moonpig’s active customer base continues to expand and the gift attach rate has also increased year-on-year, supported by the launch of new partners in Hotel Chocolat and The Entertainer, and with upcoming launches including Laura Ashley Flowers, Next Flowers and JoJo Maman Bebe.
‘Customers are increasingly embracing our innovative personalisation features to express themselves, with adoption continuing to rise - around 50% of all cards now including options such as AI-generated stickers, audio or video messages, or personalised handwriting,’ said the company.
CEO SEARCH CONTINUES
The turnaround of Moonpig’s struggling Experiences division, which includes the Buyagift and Red Letter Days brands and has proven more cyclical than the core offering, is making progress.
At Experiences, the group is building on recent operational momentum, supported by a strengthened divisional management team.
‘New products across subscription gifting, live experiences and casual dining are now live on Buyagift, with a broader pipeline of launches set to accelerate over the coming months,’ said Moonpig, whose search for a new chief executive is ongoing following the shock news (26 July) Nickyl Raithatha would leave the business after seven years in the hot seat.
QUALITY ON SALE?
Uncertainty around the top job has weighed on Moonpig’s share price in recent months, yet Canaccord Genuity analyst Karl Burns believes Moonpig offers ‘quality growth at a discount’ and has a 310p price target on the stock.
‘While there is some temporary uncertainty due to Nickyl Raithatha transitioning out the business, we feel this offers investors a significant opportunity to buy a quality growth asset trading at a highly undemanding valuation, with the company delivering business as usual, aided by a highly predictable business model,’ argued Burns.
Shore Capital’s David Hughes said the company was ‘not getting full credit for its ongoing sales growth, profit progression and higher shareholder returns. If management can continue to demonstrate the Moonpig brand can deliver strong growth then this should justify a re-rating of the stock.’
