Moonpig confirms IPO plans
Wednesday, January 13, 2021
Moonpig has revealed some stunning growth figures alongside confirmation of its plans to float, and has also outlined its ambitions to take a leading position in the overall gifting market beyond “card-attached gifting”.
The fast-growing group confirmed plans to float on the London Stock Exchange via an initial public offering (IPO) or around 25% of its shares.
In the documentation confirming the move, Moonpig stated it was the “clear market leader” in online card retailing in both the UK, where it claims a 60% market share, and the Netherlands, with 65%.
It had 12.2m active customers at the end of October 2020, and “strong customer retention” with 78% of sales coming from existing customers. It also has a massive customer dataset that it can mine, gleaned from 160m prior transactions, that includes some 45m personalised reminders about significant dates and occasions.
Its sales have been boosted during the lockdowns and restrictions around the Covid-19 pandemic.
During the year to 30 April 2020 sales for Moonpig and continental wing Greetz jumped by 44% to £173.1m, and it made an underlying EBITDA margin of 26%.
Moonpig also revealed figures for the pandemic-affected trading period covering the six months to 31 October 2020, which showed an astonishing increase in sales to £155.9m, up 135% on the prior year.
Regarding the listing, Moonpig stated that “immediately following admission, the company intends to have a free float of at least 25% of the company's issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices”.
Moonpig also described its “operational excellence” as being “underpinned by an asset light and inventory light business model, which combines lean, process designed automation with an efficient supply chain strategy consisting of a mix of in-house and outsourced functions to provide operational flexibility, minimise capital expenditure requirements, and enable operational leverage.”
Although the group has had issues in the past around busy periods such as Valentine’s Day and Mother's Day, it stated that “flexible capacity arrangements with third-party partners” meant it could “economically flex and scale its operations up to three times its normal dispatch volumes during peak periods”.
It cited the overall value of customer spending on gifting in its main markets of the UK, the Netherlands and the Republic of Ireland of around £57bn in 2019.
“Moonpig Group holds a leading position within the online cards market which provides it with a competitive advantage in the market for card-attached gifting, and access to standalone gifting, larger market opportunities that are moving online," the group stated.
It said it had “sharpened its focus on becoming the gifting companion”.
Some 44% of sales in the year to 31 October 2020 came from gifts and flowers.
Chief executive Nickyl Raithatha commented: “We are confident that Moonpig Group will continue to make gifting even more effortless for millions of people across the UK and internationally, and as the leaders of the accelerating shift to online now is the perfect time for us to bring the company to market.”
The group said further growth opportunities included other overseas markets, and bolt-on acquisitions.
Moonpig sales have grown every year since its inception in the summer of 2000.