Shares in Moonpig (MOON) rallied 9% to 229.5p after the company said FY26 EPS growth would be at the top end of guidance.
A new £65 million share buyback for FY27 from the online cards group was also greeted warmly by investors.
This fresh buyback is a nod to management’s confidence in the outlook for Moonpig and its continued strong cash generation.
In growth mode
FTSE 250 constituent Moonpig provides online greeting cards, gifts and experiences. It trades as Moonpig, Red Letter Days and Buyagift in the UK and as Greetz in the Netherlands.
Having traded in line with expectations through H2, the company is confident in delivering FY26 guidance for mid-single digit percentage adjusted EBITDA growth. Investors can also expect a high single digit percentage rise in revenue.
Thanks to the ‘accretive impact’ of buybacks, Moonpig now anticipates EPS growth at the top end of the previously guided 8% to 12%.
Moonpig called out continued growth in its Dutch business, Greetz. It also said the challenged Experiences arm has traded ‘slightly ahead’ of previous expectations.
This leaves Experiences on course for a mid-single digit percentage sales decrease for the full year.
On course to complete its current £60 million buyback by year end, Moonpig also stressed its balance sheet ‘remains strong’.
Sustainable growth
New CEO Catherine Faiers insisted Moonpig benefits from a ‘compelling customer proposition’ and leading market positions in online greeting cards and gifting.
‘Looking ahead, I see a clear opportunity to build on our proprietary data and strong customer relationships to become even more relevant to customers and inspire even greater creativity in how people celebrate and connect,’ said Faiers.
‘With our strong brands, loyal customer base and highly cash generative model, I am confident the group is well positioned to deliver sustained growth over the years ahead.’
Moonpig’s shares are down 45% on a five-year view. Current macroeconomic conditions and muted consumer confidence are headwinds for the company.
And yet there’s lots to like about Moonpig. The company continues to generate growth and cash and benefits from high customer loyalty. It also commands dominant positions in the UK and Netherlands online card markets. But keep in mind, there is stiff competition from rivals selling lower-priced cards and gifts.
Read the press release here: https://www.moonpig.group/investors/
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