Moonpig Group (MOON) H2 2024 (Q&A) earnings summary

Executive summary

• Achieved year-on-year revenue growth of 6.6% to £341.1m, with profit and cash generation increasing and a significant step up in growth trajectory in the second half, continuing into the current year.

• Underlying business trends are positive, with order and new customer growth returning to positive territory for the first time since the pandemic.

• Strategic focus on building customer loyalty, expanding subscription services, and leveraging AI for personalization and digital gifting, including Moonpig Plus surpassing 500k subscribers and new creative features.

• Adjusted EBITDA margin rose to 28.0%, and net leverage reduced to 1.31x, reflecting strong cash flow and deleveraging.

• Renewed confidence in outlook, targeting mid to high single digit revenue growth in FY25 and double-digit growth medium term.

Financial highlights

• Revenue: £341.1m (+6.6% year-on-year); Adjusted EBITDA: £95.5m (+13.5%); Adjusted PBT: £58.2m (+5.0%).

• Card order growth improved by 10 percentage points in H2, from -5% to +5%; new customer growth up 11 percentage points to +3%.

• Gross margin increased to 59.4% (+3.3 pts), driven by operational efficiencies and price changes.

• Operating cash flow rose 32% to £74.2m; operating cash conversion improved to 78%.

• Net debt reduced by £43m to £125.1m; new £180m revolving credit facility in place.

Outlook and guidance

• FY25 revenue expected to grow mid to high single digit percentage, adjusting for non-recurring voucher breakage.

• Medium-term targets: double-digit annual revenue growth, EBITDA margins of 25–26%, and consistent mid-teens EPS growth.

• Continued strong cash generation expected to drive leverage below 1x, enabling potential capital returns to shareholders.

• Capital expenditure expected at 4–5% of revenue; net finance costs c.£12m; effective tax rate 25–26%.

• Further updates on strategic initiatives and capital allocation to be provided at the October Capital Markets Event.