Moonpig Group PLC (LSE:MOON) (LON:MOON) dropped on Tuesday after disappointing the market with a lukewarm outlook statement, even though it posted a strong set of maiden results.
The card retailer forecast lower revenue in the current financial year, coming in at £250-260mln compared to £368mln in the period just ended, reflecting a return to pre-pandemic consumer patterns.
The new financial year has started “moderately ahead of expectations”, consistent with the slower lifting of lockdown restrictions in the UK and the Netherlands.
Customer purchase frequency is expected to slow down until it stalls at 5% ahead of pre-pandemic levels.
The online shop said it will continue scaling its business as the retention of customers acquired during the past year is consistent with historical data.
It will prioritise investing in marketing and market share capture over profit margin, as it targets annual revenue growth of around 15% and an adjusted underlying earnings (EBITDA) margin of 24-25% in the medium term.
In the year to 30 April, revenue rocketed 113% to £368mln, with adjusted EBITDA up 107% to £92mln. Net debt swelled 307% to £115mln.
Analysts at Peel Hunt downgraded the stock to ‘hold’ from ‘buy’ as “without an upgrade the shares do look fairly unlikely to keep moving” although “Moonpig is a highly impressive company”. The broker has not set a target price yet.
Shares tumbled 8% to 392.37p on Tuesday morning.