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Moonpig flies high despite lockdown easing

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E-retailer Moonpig flies high despite lockdown easing
Moonpig has hiked its full-year sales outlook as it said demand for online cards remains strong despite coronavirus restrictions lifting. Photo: Moonpig

Moonpig (MOON.L) has lifted its full-year sales outlook amid strong demand for online despite the easing of lockdown restrictions.

The online card retailer said it is looking at sales of between around £270m ($368.98m) and £285m for the year to 30 April thanks to “strong” trading seen so far this year. 

This is an improvement on previously forecast sales of between £250m and £260m.

Although the outlook marks a significant decline compared to the £368.2m revenues seen by the company in the previous financial year when sales skyrocketed due to lockdowns, it is still a marked uplift on pre-COVID levels.

“The company was a big lockdown winner with many people unable or unwilling to venture out to shops or supermarkets to buy greetings cards," said Russ Mould, investment director at AJ Bell.

“That led to individuals buying personalised cards online for the first time and realising that it is a convenient way of sending messages to friends and family. Not only does it save time by not having to go out and buy the card in the shops, but there’s no need to also buy a stamp and go to the post box."

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The company said the lifting of lockdown has not deterred people from purchasing cards from its website amid a “limited change in consumer mobility through the summer, despite the lifting of lockdown restrictions.”

The e-retailer has also been pumping money into promotions to increase business through app downloads, as well as implementing customer reminders, and investing further in technology.

The group said: “As people return to offices and conditions normalise, the data we collect on customer behaviour will provide important insights.

“At the current time, our view on underlying growth trends, and our medium-term growth and margin targets, remains unchanged.”

Moonpig's optimistic sales outlook "won’t necessarily translate to a similar uplift in profits, as hanging onto newly acquired customers is a costly business and the company has budgeted for a big marketing drive, including promotions to drive app downloads," said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

"It knows that when more workers do return to the office, they’ll have a chance to nip out at lunchtime again to pick up presents and cards, and bricks and mortar retailers are likely to also up their game in competition. 

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"But it’s now acquired a huge data set on customer choices and preferences, which alongside its flexible delivery options, should help it stay ahead of the herd for now.”

In the year to April 2021, sales almost doubled, as consumers in both the UK and the Netherlands — where Moonpig trades under the Greetz brand — turned to online services during coronavirus lockdowns.

However, profits rose by only 3% to £32.9m, after the company spent £42m on listing its shares in London in February.

Shares ticked up 0.2% by late-morning in London. 

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