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Moonpig fails to bring the party

by LLB Editor
27th Jul 21 11:48 am

Pigs might fly but Moonpig certainly hasn’t had a strong day following its first set of results as a listed company.

“While the shares are up on the price at which they initially joined the market, they sit well below their first closing level as initial excitement about the stock has ebbed away. Today’s results have gone down about as well as a novelty musical card would with parents on a kid’s birthday,” said AJ Bell’s Russ Mould.

“The problem for Moonpig, which feels inevitable in hindsight, is that while these numbers show impressive growth, forward guidance is much less positive, reflecting the fact that, with rivals’ physical shops reopened, it is going to lose some of the market share it won in lockdown from being an online operator.

“And even for the year just gone, profit growth was a long way behind the expansion in revenue as Moonpig invested in its online services, including its app.

“Companies should be applauded for putting money into their business, however Moonpig faces an uphill task to convince investors of its long-term growth potential from selling more cards and gifts and getting people signed up to the app.

“The suggestion that Moonpig is a tech company has raised eyebrows in some quarters but the company’s use of customer data and predictive technology to remind people of key events may have to do some heavy lifting if it is to return to a growth path and get shareholders back on side.”

 

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