Moonpig makes a noise as the greeting card party rolls around to death

Moonpig Group shares sank Tuesday after the online greeting card retailer reported a first-half loss.

The London-listed group made a pre-tax profit of £33.3million in the six months ending in October, compared with £18.9million profit for the same period last year.

It recorded a £56.7million positive deficit linked to its experience division, which has been exacerbated by weaker sales.

Profits at the division, which allows customers to add gifts such as days out, movie tickets and spa treatments to their cards, fell by almost five to £14.9 million for the first half .

Experience has also shown a pre-existing ‘break-even’ premium from expired bonds sold during the pandemic.

However, this was offset by sales growing by 10 to £118million at its Moonpig business thanks to high order books and strong operations across Britain, the US and Australia.

Total revenue at the London-based firm rose 3.8 per cent to £158million, while pre-tax profits rose 9 per cent to £27.3million.

Moonpig has announced its first-ever dividend increase and raised its mid-term earnings before nasties margin target to 25 percent to 27 percent.

But Moonpig shares were down 12.2 per cent at 235p by midday, as the FTSE 250 Index was the second-biggest faller behind the NCC Group.

Nickyl Raithatha, CEO of Moonpig, said the group’s expansion has been supported by its investment in technology and the ‘infrastructure market shift’ to the internet.

He added: ‘The increase in our medium-term revenue target reflects our confidence in the outlook for the business.’

Founded by former Dragons Den star Nick Jenkins, Moonpig has been able to achieve significant trading growth since listing on the London Stock Exchange three years ago.

Trade increased in 2020 and 2021 as Covid-related restrictions on retail stores led to more people buying greeting cards online.

But the loosening of those barriers led to a rebound in retail sales, as rising inflation discouraged consumers from buying expensive items.

Dan Coatsworth, investment analyst at AJ Bell, said: ‘There needs to be an effort to grow and diversify in other sectors such as experiences that have not gone well.

‘Many people are still watching their pennies and more expensive experiences such as asking someone to sign up for a day at the racetrack or spa treatment are hard to sell in the economic environment of now.’

Moonpig’s revenue has been flat in part due to difficult conditions facing its experience businesses.

The consensus forecasts the industry to grow by 5.8 per cent to £361 million in the 2025 financial year and its pre-tax profit to reach £60.2 million.