- Moonpig revealed it made a £33.3m pre-tax loss in the six months to October
- The firm’s shares were the FTSE 250’s second-biggest faller behind NCC Group
Moonpig Group shares plunged on Tuesday after the online greetings card retailer revealed it had slumped to a first-half loss.
The London-listed group made a £33.3million pre-tax loss in the six months ending October, compared to an £18.9million profit over the same period last year.
It recorded a £56.7million goodwill impairment connected to its experiences segment, which has faced weaker sales.
Revenue at the division, which enables customers to attach gifts like days out, cinema tickets and spa treatments to their cards, fell by around a fifth to £14.9million over the first-half period.
The experiences arm’s performance also reflected the prior year’s temporary additional ‘breakage’ revenue from expired vouchers purchased during the Covid-19 pandemic.
However, this was offset by sales growing by 10 per cent to £118million at its Moonpig business thanks to higher order volumes and strong performances across Britain, the US and Australia.
Difficult times: Moonpig Group’s experiences segment has been experiencing challenging trading conditions owing to cost-of-living pressures
The London-based firm’s total revenue rose by 3.8 per cent to £158million, while its adjusted pre-tax profits increased by 9 per cent to £27.3million.
Moonpig has declared its first-ever interim dividend and boosted its medium-term adjusted earnings before nasties margin target to a range of 25 per cent to 27 per cent.
But Moonpig shares slumped 12.2 per cent to 235p by midday, making them the FTSE 250 Index’s second-biggest faller behind NCC Group.
Nickyl Raithatha, chief executive of Moonpig, said the group’s expansion had been supported by its investment in technology and the ‘structural market shift’ to online.
He added: ‘Raising our medium-term profit margin target demonstrates our confidence in the outlook for the business.’
Founded by former Dragons Den star Nick Jenkins, Moonpig has struggled to achieve significant sales growth since listing on the London Stock Exchange three years ago.
Trading soared during 2020 and 2021 as Covid-related restrictions on retail stores led to more people buying greeting cards online.
But the loosening of such curbs led to a rebound in store sales, while inflationary pressures have discouraged consumers from buying expensive experiential gifts.
Dan Coatsworth, investment analyst at AJ Bell, said: ‘It’s having to work hard to keep growing and diversifying into other areas like experiences hasn’t gone smoothly.
‘A lot of people are still watching their pennies and the higher-priced experiences like getting people to sign up for a day at the racetrack or a spa treatment are hard sells in the current economic environment.’
Moonpig has kept its annual revenue outlook the same partly because of the challenging conditions impacting its experiences business.
Consensus forecasts have the firm’s turnover rising by 5.8 per cent to £361million in the 2025 financial year and its adjusted pre-tax profits hitting £60.2million.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .