Moonpig swings into loss, shares tumble 12%

Investing.com -- Shares of Moonpig Group sank over 12% on Tuesday after the online retailer reported a swing to loss for the six months ending October 31. 

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

This stark reversal was largely attributed to a £56.7 million non-cash impairment related to goodwill in its Experiences segment, which has been struggling under challenging macroeconomic conditions.

Despite the losses, Moonpig announced its inaugural interim dividend of 1.0p per share. This marks a new phase in the company’s financial strategy, which also includes an ongoing share buyback program of up to £25 million. These moves aim to balance shareholder returns with growth investments.

The company's revenue increased by 3.8% year-on-year, reaching £158 million. Growth was driven by strong performance in Moonpig's core UK market, where revenue rose by 10%. 

However, this was partially offset by declines in its Greetz brand in the Netherlands and a 20.8% drop in revenue from its Experiences division.

The goodwill impairment, coupled with broader economic challenges affecting discretionary consumer spending, weighed heavily on the company.

Moonpig said its resilience and future potential, citing growth in high-margin areas such as 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 said in a statement. 

Moonpig remains optimistic about its medium-term growth prospects, targeting a double-digit percentage annual revenue growth rate and an increased EBITDA margin target of 25%-27%, up from 25%-26%.

Source: Investing.com