Moonpig’s owner PhotoBox was pushed into the red last year after acquiring the online greetings card retailer.
PhotoBox was forced to write down the value of Moonpig after the Government shut the VAT loophole in the Channel Islands that allowed retailers to sell goods below a certain price tax free.
The £23m non-cash write down on the book value of Moonpig forced PhotoBox to post a £22m pre-tax loss for the 16 months to April 30, according to The Times.
PhotoBox bought Moonpig last year for £120m.
PhotoBox chief executive Stan Laurent insisted Moonpig had long-term potential despite the write down and the closure of the VAT loophole.
“The prospects for the Moonpig business aren’t fundamentally impacted [by the closure of the loophole and the subsequent write down],” he told The Times. He added that the gift side of the business is performing strongly. “Gifts weren’t benefiting from the Low Value Consignment Relief anyway, because they were above the threshold.”
PhotoBox aims to expand Moonpig, focusing on Australia.
Stripping out the effect of the removal of tax relief on the sale of cards, EBITDA was up 26% to £16.5m.