Moonpig Group PLC on Thursday said its annual profit had declined, but that revenue was up and meeting expectations, and reiterated its faith in a stable market and loyal customer base.

The London-based greetings card and gifting company said its pretax profit for the year ended April 30 was £34.9 million, down 13% from £40.0 million the previous year. Revenue increased by 5.2% to £320.1 million from £304.3 million.

Adjusted earnings before interest, tax, depreciation and amortisation reached £84.2 million, up 12% from 74.9 million. Moonpig said this was in line with expectations and due to its business model’s ‘inherent flexibility,’ and despite a difficult economic climate during and after October 2022.

Moonpig did not declare any dividend for the year, unchanged from the prior period. It said it does not plan to pay dividends in the near future, prioritising ongoing investment in its growth instead.

The group credited its resilience to a stable greeting cards market and loyal customer cohorts, in accordance with its focus on delivering lifetime value for customers who therefore will drive recurring annual revenue. Existing customers generated 88.6% of revenue for the Moonpig and Greetz brands, up from 86.5% the year before.

Selling and administrative expenses increased 29% to £132.5 million from £102.6 million, and finance costs increased 51% to £13.6 million from £9.0 million. However, Moonpig’s cost of sales decreased by 8.9% to £140.4 million from £154.2 million.

‘Today’s results demonstrate the resilience of our business model which is rooted in the stability of the greeting cards market and our unique use of data to drive customer loyalty. We have high profitability, strong cash generation and inherent flexibility that allows us to respond rapidly to a dynamic macroeconomic environment,’ commented Chief Executive Officer Nickyl Raithatha.

He added: ‘We have continued to extend our market leadership in online cards and we expect to return to growth during the year ahead, underpinned by our continued investments in our technology, marketing and operational capabilities. As the clear online leader in greetings cards, Moonpig Group is well positioned to benefit from the long-term structural market shift to online.’

Shares in Moonpig were up 6.5% at 146.90 pence in London on Thursday.

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