Moonpig has posted a fall in full-year profits despite an increase in revenue.
The greetings card retailer reported year-on-year revenue growth of 5.2% to £320.1m for the year ended 30 April, 2023, but adjusted pre-tax profits fell by 6.9% to £48m.
Moonpig said the drop was due to higher finance charges and additional borrowing to fund its acquisitions within the experiences market, which it said was partially offset by its hedging arrangements.
Higher depreciation and amortisation for the period reflected its technology investment and the opening of new leasehold facilities in the Netherlands and Tamworth, Staffordshire, it said.
The retailer has also invested heavily in its digital operations, scaling its technology team to 250 people – up from 195 in April last year – and investing in its experiences technology platform, which allows shoppers to add days out and events to Moonpig cards.
During the period, Moonpig also completed the acquisition of Red Letter Days and Buyagift and said it had “implemented significant operational changes” as part of their integration.
Revenue at its experiences division grew year on year, although more slowly in the second half due to the cost-of-living crisis.
Moonpig chief executive Nickyl Raithatha said: “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.
“We are innovating to differentiate and elevate Moonpig cards with embedded video messages, personalised content and the ability to include a gift experience within the card.
“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.”
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