Moonpig Group Reports Mixed Results with £56.7m Impairment Charge
Why we think this is bad
While Moonpig Group's core business shows resilience with 8.6% revenue growth and strong cash generation, the overall picture is concerning. The £56.7m non-cash impairment charge in the Experiences segment significantly impacted reported profits. Despite adjusted profit before tax increasing by 16.0%, the reported profit before tax plummeted to just £3.0m. The company faces headwinds in its Experiences and Greetz segments, and multiple indicators point to challenging market conditions. The cautious outlook, expecting only mid-single digit Adjusted EBITDA growth, suggests a slowdown compared to previous years. These factors, combined with a slight decrease in Adjusted EBITDA margin and the high count of negative trading indicators, outweigh the positive aspects of customer growth and improved net leverage.
Key Points
- Revenue up 2.6% to £350.1m, with Moonpig brand growing 8.6%
- £56.7m non-cash impairment charge in Experiences segment
- Adjusted profit before tax up 16.0% to £67.5m
- Reported profit before tax down to £3.0m from £46.4m
- Free Cash Flow increased 8.4% to £66.1m
- Active customers grew 4.3% to 12.0m
- Net leverage improved to 0.99x from 1.31x
- Adjusted EBITDA margin slightly decreased to 27.6% from 28.0%
- Expects mid-single digit Adjusted EBITDA growth for FY26
- Challenging market conditions in Experiences and Greetz segments
Summary
Moonpig Group's FY25 results present a mixed picture. Revenue grew 2.6% to £350.1m, with the core Moonpig brand growing at 8.6%. However, a £56.7m non-cash impairment charge in the Experiences segment significantly impacted profits. Adjusted profit before tax increased 16.0% to £67.5m, but reported profit before tax fell to just £3.0m. The company maintained strong cash generation with Free Cash Flow up 8.4% to £66.1m. Active customers grew to 12.0m, a 4.3% increase. Looking ahead, Moonpig expects mid-single digit percentage growth in Adjusted EBITDA and 8-12% growth in Adjusted EPS for FY26, indicating a cautious outlook amidst challenging market conditions. The company faces headwinds in its Experiences and Greetz segments, which could impact future performance.