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Moonpig is the clear leader in terms of online greeting cards / Image source: Moonpig
  • Lower-than-expected revenue growth
  • CEO to step down
  • Core brand in rude health

Online greeting cards-to-gifting platform Moonpig (MOON) trotted in with better-than-expected annual profits driven by the power of the core brand, which delivered growth in active customers, order frequency and average order value alike.

So why did Moonpig’s shares tumble 10% to 220p in early dealings on 26 June?

Well, sales growth for the year ended 30 April 2025 fell short of market expectations and investors were caught off guard by the news Nickyl Raithatha is stepping down as CEO after seven years in the role, though he will serve his 12-month notice period to ensure a smooth succession.

GROWTH SLOWS

The FTSE 250 firm’s revenues increased by 2.6% to £350.1 million in full-year 2025.

That was shy of the 4% rise to £354 million consensus was calling for and represented a slowdown from the 6.6% growth delivered in the previous year, as the strength of the core Moonpig brand was offset by continued declines at the Dutch operation Greetz and in the experiences arm.

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The higher cost associated with experience days makes them a harder sell in a tricky consumer environment and this is also an area where Moonpig faces established competition.

Despite slower top-line growth, Moonpig’s adjusted pre-tax profits powered 16% higher to £67.5 million, comfortably ahead of the £63.3 million the market was looking for, albeit with support from lower finance charges.

STRONG FATHER’S DAY

Moonpig insisted trading in the new financial year-to-date has been in line with management’s expectations including ‘strong’ Father’s Day trading.

For full-year 2026, the company expects adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) to grow at a mid-single digit percentage clip rate with adjusted earnings per share growth in the 8% to 12% range.

Continued strong free cash flow generation will fund ongoing investment in Moonpig’s growth strategy as well as dividends and additional share buybacks.

EXPERT VIEWS

Begbies Traynor’s (BEG:AIM) Julie Palmer explained that enhanced by a good use of AI to increase personalisation and make appealing recommendations, Moonpig’s core business is ‘fuelling the rocket ship with more customers making bigger orders. Other retailers will undoubtedly be looking to see how they can replicate this use of AI, especially as Moonpig has the confidence over the medium term to continue its share buyback programme.’

However, ‘there is no hiding from the fact that there are still challenges ahead. The experiences business is not firing on all cylinders and while Moonpig’s ambitions overseas are growing, it looks like this will take time to pay off,’ warned Palmer.

‘With long-serving CEO Nickyl Raithatha also stepping down, the focus will now be on keeping up the momentum and ensuring a smooth transition at the top.’

Russ Mould, investment director at AJ Bell, commented: ‘While Moonpig is the clear leader in terms of online greeting cards, most card purchases are still made offline. Its goal is to take a greater share of the overall market.

‘Convenience is the main selling point for Moonpig but given cards are sold in most supermarkets, for many people grabbing the card they need while out doing a weekly shop might be a hard habit to break.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Steven Frazer) own shares in AJ Bell.

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Issue Date: 26 Jun 2025