Moonpig expects fall in revenue, but predicts Covid customers will stick around

A slow lifting of lockdown restrictions benefited online greeting card seller Moonpig, but it is still expecting a major drop in sales in the coming months.

The business said that restrictions had eased slowly in the UK and the Netherlands, its two main markets, putting the start of its financial year “moderately ahead of expectations”.

Moonpig comes off a year of explosive growth which saw its revenue more than double to around £368 million in the year ending April 30.

Those in lockdown in both the UK and the Netherlands – where Moonpig trades under the Greetz brand – turned to online services last year.

Greeting cards flew off the shelves as the company both attracted new customers and won more businesses from previous customers.

Yet the company could only report a 3% rise in pre-tax profit, to £32.9 million, after shelling out around £42 million to list its shares in London.

And the company said that the frequency with which customers buy from its site is “starting to normalise” from the high levels seen during Covid.

But it does not expect to lose all the business. “Customer purchase frequency” is expected to stay around 5% higher than before Covid-19.

“In the past year we have delivered an enduring transformation and step-change in the scale of our business,” said chief executive Nickyl Raithatha.

“The long-term growth opportunity remains vast, with the majority of the card and gifting market still offline, and we have never been in a better position to capture this growth.”

Revenue is expected to drop to between £250 million and £260 million during the current financial year.

It would be a massive drop compared to its most recent year, but still 45% to 50% higher than before Covid.

“As society emerges from lockdown, and certain customer behaviours such as purchase frequency start to normalise, we will see a reduction in headline revenue,” it said.