7th Dec 2022 17:58
(Alliance News) - Moonpig Group PLC on Wednesday joined other struggling online retailers as it saw interim profit slashed in half amid "dampened investor appetite" and "squeezed household budgets".
Concerns about the cost-of-living crisis, coupled with a decline in online demand from the fading "pandemic-era boom", contributed to the company's downturn, said Victoria Scholar of interactive investor.
For the six months to October 31, the online greeting card and gifting company reported pretax profit of GBP9.1 million, down from GBP18.7 million a year prior.
Revenue was practically flat at GBP142.8 million from GBP142.6 million last year, while cost of sales decreased by 9.9% to GBP65.6 million from GBP72.8 million. Selling & administrative costs widened 34% to GBP63.0 million from GBP47.0 million.
"Consumers are becoming increasingly price sensitive given the macroeconomic backdrop of a looming recession, falling real wages and with consumer confidence near record lows," argued Scholar.
Analyst Jack Pattinson of AJ Bell agreed, and pointed further to the impact of Royal Mail strikes on company sales, which he said had "clearly [...] put off" customers in September and October.
"Moonpig is [a] good option for some people as it takes the hassle out of going to the shops to buy a card and stamp, but this convenience factor doesn't count for much if the sender isn't sure the recipient will get their card on time," Pattinson added.
Looking ahead, Moonpig downgraded its full-year revenue forecast, on the basis of weaker demand, to GBP320 million from GBP350 million.
Its expectations for profit, however, "remain unchanged", said Chief Executive Officer Nickyl Raithatha.
The company's policy is not to pay dividends.
Moonpig shares closed 8.9% lower at 137.70 pence each in London on Wednesday.
By Holly Beveridge; Alliance News reporter
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