The Moonpig Group report and accounts just filed for the financial year ended 30 April 2023 reveals that CEO Nickyl Raithatha’s total remuneration increased more than four-fold.
His total package rose from £1,438,606 the prior year to a massive £6,266,276 – boosted by a ‘legacy pre-IPO’ award of £5,576,561.
CFO Andy MacKinnon’s total remuneration more than doubled from £932,769 to £2,305,641 including a £1,858,854 payment under the same legacy award.
The legacy award will be payable half in cash and half in shares, using the share price from when the PLC’s shares were admitted to the stock exchange in February 2021, when the business was valued at nearly £1.2bn.
Half of the legacy award was payable this month on the publication of the results and 50% is contingent on continued employment to 30 April 2024.
In the report, Susan Hooper, chair of the remuneration committee stated: “Management has continued to outperform the financial targets set at IPO for FY23 (with or without the revenue and profit from the acquisition of Experiences) hence the performance conditions for the legacy pre-IPO award have all been exceeded.
“The group has faced a more challenging near-term trading environment in view of the economic backdrop, however trading has remained resilient in this context and the business has continued to capture share in the online segment of the greeting cards market,” she said.
“We believe that the group can continue to outperform the market and continue to set robust targets particularly through the one-off award which will only deliver value if we deliver on those aspirations.”
New LTIP
In its Risk Management report, Moonpig stated that “talent retention for the leadership population has increased in risk” due to the final vesting of the legacy pre-IPO awards and the low likelihood that the Total Shareholder Return element of the existing Long Term Incentive Plan (LTIP) awards will materially vest.
An amended version of the LTIP was agreed by the board at the end of June, and is now subject to shareholder approval at the upcoming AGM in September.
It includes a new exceptional limit of 450% of a director’s base salary for FY24 share awards.
Royal Mail
Separately, Raithatha also noted that the group’s employee engagement KPI had been impacted “by the need for disciplined control of costs during an economic downturn”, while the group’s net promoter score had slipped from 71 to 60, which was blamed mainly on last year’s industrial action at Royal Mail.
Another important aspect relating to Royal Mail is the postal operator’s consultation on replacing mail flights from Jersey and the Isle of Man with a ferry service. Royal Mail is also proposing that “any future similar change in relation to Guernsey would not require consultation”.
Moonpig’s original greetings card and production factory is on Guernsey. It opened a new fulfilment unit in Tamworth last year.
The group said it was “engaging with Royal Mail on this matter”, while the risk was also mitigated due to its gifting push which moves orders “from regulated envelope post to parcel courier delivery for which there are multiple providers”.
In the year to 30 April 2023, the PLC reported revenue of £320.1m, up 5.2% on the prior year, but pre-tax profit of £34.9m, down 12.6% year-on-year. Adjusted EBITDA was up 12.4% to £84.2m.
Raithatha described the business model as resilient.
The group's online brands are Moonpig, Greetz, Red Letter Days and Buyagift.
The group’s share price of 165.50p is up nearly 46% since the start of the year, but down 61% since the IPO (52-week high: 217.40p, low: 102.00p). The current market capitalisation is £569.5m.
