TIDMMOON
RNS Number : 6348V
Moonpig Group plc
05 December 2023
5 December 2023
Moonpig Group plc ( "Moonpig Group" or the "Group")
HALF YEAR RESULTS FOR THE SIX MONTHSED 31 OCTOBER 2023
Return to technology-driven revenue growth
Current trading in line with our expectations and guidance
unchanged
Summary financial results
Six months ended Six months ended Year-on-year
31 October 2023 31 October 2022 growth %
---------------------------------------------- ----------------- ----------------- -------------
Group revenue (GBPm) 152.1 142.8 6.5%
Gross profit (GBPm) 89.0 77.2 15.3%
Gross margin (%) 58.5% 54.1% 4.4%pts
Adjusted EBITDA (GBPm)(1) 41.4 34.6 19.9%
Adjusted EBITDA margin (%)(1) 27.2% 24.2% 3.0%pts
Reported profit before taxation (GBPm) 18.9 9.1 107.8%
Adjusted profit before taxation (GBPm)(1) 20.8 18.9 9.7%
Basic earnings per share (pence) 4.1 1.7 141.2%
Adjusted basic earnings per share (pence)(1) 4.6 4.3 7.0%
---------------------------------------------- ----------------- ----------------- -------------
1 Before Adjusting Items of GBP1.9m in H1 FY24 and GBP9.8m in H1
FY23. See Note 3 and Note 19.
Results summary
-- Revenue growth of 6.5% year-on-year to GBP152.1m. Pro forma
revenue growth (adjusted for acquisitions) was 2.1%.
-- Adjusted EBITDA growth to GBP41.4m (H1 FY23: GBP34.6m)
reflecting improved gross margin rate and disciplined cost
control.
-- Adjusted Profit before Taxation of GBP20.8m (H1 FY23:
GBP18.9m) reflecting stronger trading offset in part by higher
interest charges and the amortisation of technology platform
investments.
Strategic and operational highlights
The Group delivered revenue growth in H1 FY24:
-- Trading performance has been underpinned by Moonpig, which
grew revenue year-on-year by 4.9% and has consistently delivered
growth at a mid-single digit percentage rate in recent months.
-- Greetz revenue decreased by 9.8% year-on-year during H1 FY24
with a continued trajectory of improvement in trading across the
period.
-- At Experiences, pro forma revenue increased by 4.5%, albeit
with lower new voucher sales. There has been good delivery against
our strategy for this segment.
We have driven revenue growth through continued focus on
technology innovation, including new features to drive order
frequency:
-- Encouraging traction with Moonpig Plus subscriptions, which
are driving consistently higher customer order frequency .
-- Greetz Plus subscriptions scheduled for roll-out during the
second half of this financial year.
-- Nearly 4 million customers used our innovative card
creativity features, including video and audio messages, stickers
for the inside of cards, emojis, flexible photographs, moveable
text boxes and AI-driven customised messages.
We continue to improve how we leverage AI to personalise
recommendations to customers:
-- Significant upgrade to our AI capabilities, which now
incorporate customer-level data alongside data from card
personalisation into our gift recommendation algorithms.
-- New features that make it easier for customers to attach a
gift, such as "perfect pairings" for cards and gifts frequently
bought together, suggested add-ons and a redesign of the product
details page for gifts and flowers.
-- A tailored online journey for every user, including
personalised homepage banners and personalised promotions.
We are investing in technology at Experiences and upgrading how
we cross-sell gift experiences to Moonpig customers:
-- Full re-platforming of Experiences, with new home pages and
product detail pages already launched.
-- New payment options for Red Letter Days and Buyagift .
-- Faster experimentation, including the introduction of upsell recommendations.
-- An upgraded Moonpig user journey for gift experiences and
launch of instant delivery of a digital gift with an e-card.
Our business is resilient, profitable and cash generative:
-- Continued focus on profitability, with gross margin rate
strengthened by 4.4%pts year-on-year. This includes the benefits of
insourcing UK fulfilment at our Tamworth facility.
-- Resilience is rooted in the stability of the greeting cards
market and in our loyal customer cohorts, with 91% of Moonpig and
Greetz revenue from existing customers (H1 FY23: 90%).
-- Strong operating cash conversion on an annual basis, with
cash inflows seasonally weighted into the second half of the year.
Net debt maintained at GBP166.9m as at 31 October 2023 (30 April
2023: GBP167.7m, 31 October 2022: GBP208.8m).
-- Net debt to pro forma Adjusted EBITDA decreased to 1.83x as
at 31 October 2023 (1.97x as at 30 April 2023, 2.45x as at 31
October 2022).
-- Significant liquidity and covenant headroom, with debt
facilities committed until December 2025.
Outlook
Current trading remains in line with our overall expectations.
Consolidated revenue growth in recent weeks has continued the
positive trends seen in the first half, underpinned by growth at
the Moonpig brand. Whilst the external environment remains
challenging, our expectations for full year consolidated revenue
and Adjusted EBITDA remain unchanged. We remain focused on
deleveraging and expect to reduce the ratio of net debt to Adjusted
EBITDA by approximately 0.5x during FY24.
Nickyl Raithatha, CEO, commented
"We are pleased to report year-on-year growth in both revenue
and profit despite the challenging macro-economic environment,
marking the Group's return to revenue growth. Our focus on
technology is driving this growth, underpinned by our resilient,
profitable and cash generative business model, leveraging our
unique use of data to drive customer loyalty.
We continue to innovate to attract and retain our loyal
customers. During the period nearly 4 million customers used our
innovative card creativity features such as audio and video
messages, AI-generated text suggestions, stickers, flexible photos
and digital gifting solutions. As the clear online leader in
greetings cards, we remain well positioned to benefit from the
long-term structural market shift to online."
Investor and analyst meeting
The full year results presentation will be available on the
Investor Relations section of Moonpig Group's corporate website (
www.moonpig.group/investors ) shortly after 7:00am on 5 December
2023.
Nickyl Raithatha (CEO) and Andy MacKinnon (CFO) will host a
Q&A for analysts and investors via webcast at 9:30am. Please
note that the presentation will not be repeated during the
webcast.
Analysts wishing to register for the event should email
investors@moonpig.com.
Investors wishing to listen to the Q&A should register via
the following link:
https://www.lsegissuerservices.com/spark/MoonpigGroup/events/fba22c69-8df2-4cb2-9703-f06922f8268f
Enquiries
Brunswick Group +44 20 7404 5959
Sarah West, Fiona Micallef-Eynaud, Sofie Brewis
moonpig@brunswickgroup.com
Moonpig Group investors@moonpig.com, pressoffice@moonpig.com
Nickyl Raithatha, Chief Executive Officer
Andy MacKinnon, Chief Financial Officer
About Moonpig Group
Moonpig Group plc (the "Group") is a leading online greeting
cards and gifting platform, comprising the Moonpig, Red Letter Days
and Buyagift brands in the UK and the Greetz brand in the
Netherlands. The Group's leading customer proposition includes an
extensive range of cards, a curated range of gifts, personalisation
features and next day delivery offering.
The Group offers its products through its proprietary technology
platforms and apps, which utilise unique data science capabilities
designed by the Group to optimise and personalise the customer
experience and provide scalability. Learn more at
https://www.moonpig.group/ .
Forward Looking Statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results or operation and
businesses of Moonpig Group plc. Such statements and forecasts by
their nature involve risks and uncertainty because they relate to
future events and circumstances. There are a number of other
factors that may cause actual results, performance or achievements,
or industry results to be materially different from those projected
in the forward-looking statements.
These factors include general economic and business conditions;
changes in technology; timing or delay in signing, commencement,
implementation and performance of programmes, or the delivery of
products or services under them; industry; relationships with
customers; competition and ability to attract personnel. You are
cautioned not to rely on these forward-looking statements, which
speak only as of the date of this announcement. We undertake no
obligation to update or revise any forward-looking statements to
reflect any change in our expectations or any change in events,
conditions or circumstances.
Business review
Overview
The first half of FY24 has been a period of strong strategic
delivery, with activity focused in the following key areas:
-- Innovation on the Moonpig and Greetz technology platform to
drive revenue growth. Our product, data and technology teams have
significantly increased the velocity of delivery for
customer-facing growth initiatives. These include Moonpig Plus
subscriptions, card creativity features (such as audio and video
messages, group cards, digital delivery of gift experiences) and AI
technologies that leverage data on previous customer purchase
behaviour to enhance gifting recommendation algorithms.
-- Continued execution of the transformation project at
Experiences, including phased migration to a new technology
platform and the launch of a new visual identity for both brands to
support differentiated market positioning.
-- Developing our pipeline of initiatives intended to drive
medium-term growth, including testing of our prototype Moonpig at
Work solution for SME business to employee gifting.
Moonpig Group has maintained its investment in technology,
marketing and operations through the economic cycle due to the
resilience, profitability and cash generation of our business:
-- Our focus on customer lifetime value equips us with
resilience in more challenging conditions. Our approach at Moonpig
and Greetz is focused on acquiring loyal customer cohorts that
drive recurring revenue and 91% of revenue at these brands was
generated from existing customers (H1 FY23: 90%). The long-term
"sticky" nature of these customer cohorts is supported by our data
and technology platform, which allows us to personalise the user
experience. More generally, the greeting cards market has a long
track record of recession-resilience.
-- We have further increased profitability, raising our Adjusted
EBITDA margin rate to 27.2% (H1 FY23: 24.2%) through a combination
of gross margin rate improvement and disciplined control of
indirect costs. Our low-inventory strategy means that profit
margins are not exposed to significant stock-related risks.
-- We are cash generative with significant liquidity and
covenant headroom. In line with prior year, the seasonality of our
business means that we expect cash inflows to arise in the second
half of the year. The ratio of net debt to pro forma Adjusted
EBITDA decreased from 1.97x as at 30 April 2023 to 1.83x as at 31
October 2023, driven by earnings growth.
Leveraging data and technology
Last year, we completed a multi-year project to unite Moonpig
and Greetz onto a single technology platform. This freed the
majority of our technology teams to focus on innovation and
experimentation, driving an acceleration of the pace at which we
deploy new features.
We have delivered features to encourage existing customers to
place orders more frequently:
-- We launched our subscription scheme Moonpig Plus, which has
been encouraging in terms of both the sign-ups that we have seen
and the frequency uplifts that it has driven from these customers .
We intend to roll-out Greetz Plus in the second half of this
financial year.
-- Nearly 4 million customers used our innovative card
creativity features including video and audio messages, stickers
for the inside of cards, emojis, flexible photographs, moveable
text boxes and AI-driven customised messages.
We are building new functionality to promote the collaborative
use of Moonpig and Greetz:
-- Introduced further functionality for group cards. We are
seeing an average of 10 messages per card, providing multiple
opportunities to convert collaborators into new customers.
-- We have launched an invite-only beta version of our new
corporate offering, Moonpig at Work. This is initially targeted at
SME gifting to employees around events such as birthdays, work
anniversaries and Christmas. As we continue to test and iterate
this product based on customer feedback, we will expand the service
to our waitlist in the coming months.
We continue to improve how we leverage AI to personalise
recommendations to customers:
-- Significant improvement to our gifting recommendation
capabilities, which now use customer-level data in addition to the
data from personalisation of greeting cards that our algorithms
already leverage.
-- New features that make it easier for customers to attach a
gift, such as a "perfect pairings" carousel for cards and gifts
frequently purchased together, suggested add-ons and a redesign of
the product details page for gifts and flowers.
-- A tailored online journey for every user, including
personalised homepage banners and personalised promotions.
We are investing in technology at Experiences, and upgrading how
we cross-sell gift experiences to Moonpig customers:
-- Full re-platforming of Experiences, with new home pages and
product detail pages already launched.
-- New payment options for Red Letter Days and Buyagift .
-- Faster experimentation, including the introduction of upsell recommendations.
-- An upgraded Moonpig user journey for gift experiences and
launch of instant delivery of a digital gift with an e-card.
Building our brands
Our brands are powerful assets, which have been built over
several decades, with high levels of consumer awareness and strong
association with the attributes of convenience, service and
range.
As we increasingly differentiate our card offering through new
technology features, we are broadening the focus of brand marketing
activity at Moonpig and Greetz to emphasise the fact that we offer
a better card than the online and offline competition. Our
marketing showcases specific product features, to raise awareness
of differentiated card creativity options such as video and audio
messages, stickers and photo upload as well as new propositions
such as group cards and Moonpig Plus. We will deliver this through
leveraging website real estate, social media and display marketing.
This has commenced in the Netherlands with our recent "With Greetz
you give more than a card" campaign.
Our strategy remains focused on delivering revenue growth
through our existing customer base and the share of revenue from
existing customers increased year-on-year to 91% (H1 FY23: 90%). We
maintained our disciplined approach to new customer acquisition,
ensuring that payback periods stay within our framework. We
continue to acquire high-quality, loyal customer cohorts that
deliver lifetime value rather than pursuing short-term,
transactional revenue.
At Experiences, we have continued the process of differentiating
the Red Letter Days and Buyagift brands, so that the former
emphasises iconic experiences and a more curated range, whilst the
latter is more value-led. A new, fresh visual identity has been
rolled-out at each brand. We have also increased marketing
investment during the key pre-Christmas trading period,
supplementing the optimisation of performance marketing with new
brand marketing activity focused around online video and social
media to build awareness and purchase consideration.
Evolving our range
In the current trading environment, Moonpig and Greetz have
prioritised the delivery of improvements in gross margin rate and
operational process efficiency ahead of range expansion. This has
enabled an increase in Group gross margin rate to 58.5% (H1 FY23:
54.1%), the reduction in gross inventories to GBP12.4m (31 October
2022: GBP14.8m) and an extension in the Greetz cut-off time for
same-day dispatch to 11pm for all cards, gifts and flowers.
During the second half of FY23, we created a single global team
responsible for all designs on greeting cards and personalised
gifts such as mugs and balloons. This team manages in-house and
licensed designs and it remains focused on a programme of
negotiation with global licensors to bring internationally
recognised properties to Greetz that already feature on
Moonpig.
At Moonpig, we have extended our existing partnership with
Virgin Wines so that it also covers personalised bottles of still
and sparkling wine. We are working with a small number of potential
new branded gifting partners ahead of planned launch in the second
half of the year.
At Experiences, we have focused on acquiring premium partners
such as Champneys Health Spa and W Hotels to support
differentiation, alongside new partnerships with popular brands
across the UK. Work is also ongoing on a partnership that will
materially expand our premium restaurant proposition upon
launch.
Maintaining high ethical, environmental and sustainability
standards
We continue to execute against our ESG strategy, which commits
the Group to eight long-term goals focused on the environment, its
people and its communities.
A key area of focus is customer net promoter score, which
continues to be impacted by Royal Mail not meeting its regulatory
performance targets for the delivery of First Class mail. We are
taking steps to mitigate this, including the introduction of
earlier communication with customers who have set occasion
reminders to encourage advance ordering. We also plan to leverage
postcode-level data to provide dynamic guidance to UK customers on
the predicted delivery date for their order.
We have commenced a programme of engagement with suppliers to
secure SBTi-aligned commitments to set greenhouse gas emissions
reduction targets. Our immediate target is to secure commitments
from suppliers representing 18.0% of our Scope 3 emissions by 30
April 2024 (April 2023: 9.7%), with a medium-term goal of achieving
67.0% coverage by April 2030.
We are making progress on employee engagement and expect to
report a year-on-year improvement in employee engagement score at
the full year, albeit there is continued impact from the need for
disciplined control of costs during an economic downturn.
We are passionate about diversity in the technology sector and
were delighted to welcome the Group's first female Chief Product
and Technology Officer to our Executive Committee in August this
year. One of our sustainability goals is to maintain the proportion
of new hires into technology security, engineering, product and
analytics roles at around 45% women. In a period of reduced
recruitment activity, this ratio decreased to 38% in H1 FY24 (H1
FY23: 46%). We remain committed to hiring on a diverse basis for
these roles.
Financial review
Overview
The Group delivered consolidated revenue growth at 6.5% in H1
FY24, which equates to pro forma growth of 2.1% against a prior
year comparative including six months of trading at Experiences.
Trading performance has been underpinned by revenue at the Moonpig
brand, which grew year-on-year by 4.9% and has consistently
delivered growth at a mid-single digit percentage rate in recent
months.
Our growth is being delivered through technology innovation. Our
product, data and technology workforce is now primarily focused on
customer-facing growth initiatives, delivering features that will
drive low-cost new customer acquisition (such as group cards, which
encourage message contributors to register with Moonpig), customer
purchase frequency (including Moonpig Plus subscriptions and card
creativity features such as audio and video messages) and gift
attachment (such as digital gift experiences and improved gifting
recommendation algorithms that leverage data on customers previous
purchase behaviour).
Our business model is resilient and profitable, which means that
we remain well-positioned to navigate the continued challenging
market environment. Our resilience is rooted in the loyalty of our
customer cohorts and the recession-resilient characteristics of the
greeting card market. We have further increased profitability,
raising our Adjusted EBITDA margin rate to 27.2% (H1 FY23: 24.2%)
through a combination of gross margin rate improvement and
disciplined control of indirect costs. Our low-inventory strategy
means that profit margins are not exposed to significant
stock-related risks.
We are cash generative with significant liquidity and covenant
headroom. In line with prior year, the seasonality of our business
means that we expect cash inflows to arise in the second half of
the year. The ratio of net debt to pro forma Adjusted EBITDA
decreased from 1.97x as at 30 April 2023 to 1.83x as at 31 October
2023, driven by earnings growth.
Financial performance - Group
Six months Six months H1 FY24
ended ended Year-on-year
31 October 2023 31 October 2022 growth %
------------------------------------------- ----------------- ----------------- --------------
Revenue (GBPm) 152.1 142.8 6.5%
Gross profit (GBPm) 89.0 77.2 15.3%
Gross margin (%) 58.5% 54.1% 4.4%pts
------------------------------------------- ----------------- ----------------- --------------
Adjusted EBITDA (GBPm)(1) 41.4 34.6 19.9%
Adjusted EBITDA margin (%)(1) 27.2% 24.2% 3.0%pts
------------------------------------------- ----------------- ----------------- --------------
Reported profit before taxation (GBPm) 18.9 9.1 107.8%
Adjusted profit before taxation (GBPm)(1) 20.8 18.9 9.7%
------------------------------------------- ----------------- ----------------- --------------
Earnings per share - basic (pence) 4.1 1.7 141.2%
Earnings per share - diluted (pence) 4.0 1.7 135.3%
------------------------------------------- ----------------- ----------------- --------------
Net debt (GBPm)(2) (166.9) (208.8) 20.1%
------------------------------------------- ----------------- ----------------- --------------
1 Before adjusting items of GBP1.9m in H1 FY24 and GBP9.8m in H1
FY23. See Adjusting Items at Note 3 and definition of Alternative
Performance Measures at Note 19.
2 Net debt is defined as total borrowings, inclusive of lease
liabilities, less cash and cash equivalents.
The Group delivered revenue of GBP152.1m in the first half of
FY24, representing year-on-year growth of 6.5% on a consolidated
basis. This reflects the inclusion of a full six months of
Experiences revenue in H1 FY24, which would have contributed an
additional GBP6.3m of prior year revenue if owned throughout H1
FY23. Pro forma revenue growth was 2.1%, underpinned by the Moonpig
brand.
Gross margin rate strengthened by 4.4%pts year-on-year
reflecting the benefits from insourcing fulfilment at Tamworth, the
impact of changes to card prices and shipping prices for gifts and
the mix impact of a full six months of trading at Experiences.
Combined with disciplined control of indirect costs, this enabled
the Group to deliver an increase in Adjusted EBITDA margin to 27.2%
(H1 FY23: 24.2%).
Adjusted PBT was GBP20.8m (H1 FY23: GBP18.9m), reflecting higher
Adjusted EBITDA offset in part by higher depreciation resulting
from FY23 capital expenditure on new operational facilities at
Tamworth and Almere, higher amortisation (reflecting increased
technology investment and a full period charge for the amortisation
of acquired intangible assets arising on business combination with
Experiences) and increased finance costs on the unhedged element of
our bank borrowings resulting from higher interest rates.
Net debt is a non-GAAP measure and is defined as total
borrowings, inclusive of lease liabilities, less cash and cash
equivalents. Group net debt as of 31 October 2023 was GBP166.9m (30
April 2023: GBP167.7m; 31 October 2022: GBP208.8m), resulting in a
ratio of net debt to Adjusted EBITDA of 1.83x (30 April 2023: net
debt to pro forma Adjusted EBITDA 1.97x; 31 October 2022: net debt
to pro forma Adjusted EBITDA of 2.45x). Net debt excluding lease
liabilities was GBP149.0m (30 April 2023: GBP148.1m; 31 October
2022: GBP188.9m).
Revenue
Six months Six months H1 FY24
ended ended Year-on-year
31 October 2023 31 October 2022 growth %
------------------------------------------ ------------------ ------------------ --------------
Moonpig and Greetz orders (m) 16.0 16.9 (5.1)%
Moonpig and Greetz AOV (GBP per order) 8.3 7.8 7.1%
------------------------------------------ ------------------ ------------------ --------------
Moonpig and Greetz revenue (GBPm) 133.4 131.1 1.7%
------------------------------------------ ------------------ ------------------ --------------
Moonpig revenue (GBPm) 108.0 103.0 4.9%
Greetz revenue (GBPm) 25.3 28.1 (9.8)%
------------------------------------------ ------------------ ------------------ --------------
Moonpig and Greetz revenue (GBPm) 133.4 131.1 1.7%
Experiences revenue (GBPm) 18.8 11.7 60.6%
------------------------------------------ ------------------ ------------------ --------------
Group revenue (GBPm) 152.1 142.8 6.5%
------------------------------------------ ------------------ ------------------ --------------
Note: Figures in this table are individually rounded to the nearest GBP0.1m. As a result,
there may be minor discrepancies in the subtotals and totals due to rounding differences.
Moonpig increased revenue year-on-year by 4.9% and has
consistently delivered growth at a mid-single digit percentage rate
in recent months. Growth in H1 FY24 includes the impact of a
GBP0.20 increase in the price of a standard-sized greeting card
that was implemented from 1 November 2022 in the UK and which
therefore will not contribute to growth in the second half of the
year.
The 9.8% decrease in Greetz revenue has been driven by the
economic downturn. We have acted to address this and have delivered
a trajectory of improvement in trading across the half year. We
have made structural changes which enable greater collaboration,
maximising the opportunity for Greetz to take advantage of Group
capabilities in areas such as marketing and card design. We are
rapidly rolling-out new technology features such as video and audio
messages for Dutch customers and our brand marketing is focused
around the differentiated features that Greetz cards now offer. We
are driving initiatives to promote customer frequency including
reminder setting and have driven growth in app share of Greetz
orders to 26.5% in October 2023 (October 2022: 17.6%). We intend to
roll-out Greetz Plus subscription membership in the second half of
this financial year.
Combined Moonpig and Greetz revenue increased by 1.7%
year-on-year, with orders 5.1% lower than prior year. Average Order
Value (AOV) increased by 7.1%, in part reflecting prior year card
price increases and the pass-through of Royal Mail stamp price
increases in the UK. There has also been a moderate year-on-year
increase in the proportion of orders for which customers attach a
gift.
Revenue at Experiences totalled GBP18.8m, an increase of 4.5%
compared to prior year revenue of GBP18.0m (stated pro forma as if
the business had been owned throughout the period). The
year-on-year movement in pro forma revenue would have been a mid
single digit percentage reduction without temporarily higher
breakage relating to gift boxes (primarily distributed through high
street retail partners) and vouchers that were sold during Covid
with extended expiry dates; this is not expected to recur in future
years.
Gifting mix of revenue
Six months Six months H1 FY24
ended ended Year-on-year
31 October 2023 31 October 2022 growth %
------------------------------------------------------ ----------------- ----------------- --------------
Moonpig and Greetz cards revenue (GBPm) 79.0 74.7 5.7%
Moonpig and Greetz attached gifting revenue (GBPm) 50.4 51.3 (1.9)%
Moonpig and Greetz standalone gifting revenue (GBPm) 4.0 5.0 (20.9)%
------------------------------------------------------ ----------------- ----------------- --------------
Moonpig and Greetz revenue (GBPm) 133.4 131.1 1.7%
Experiences gifting revenue (GBPm) 18.8 11.7 60.6%
------------------------------------------------------ ----------------- ----------------- --------------
Group revenue (GBPm) 152.1 142.8 6.5%
------------------------------------------------------ ----------------- ----------------- --------------
Moonpig / Greetz total gifting revenue (GBPm) 54.4 56.4 (3.6)%
Moonpig / Greetz gifting revenue mix (%) 40.8% 43.0% (2.2)%pts
Group gifting mix of revenue (%) 48.1% 47.7% 0.4%pts
------------------------------------------------------ ----------------- ----------------- --------------
Note: Figures in this table are individually rounded to the nearest GBP0.1m. As a result,
there may be minor discrepancies in the subtotals and totals due to rounding differences.
The Group's gifting mix of revenue increased slightly to 48.1%
(H1 FY23: 47.7%) reflecting the consolidation of Experiences
revenue throughout H1 FY24. For Moonpig and Greetz, gifting mix of
revenue decreased by 2.2%pts, driven by the impact of price rises
on greeting card revenue.
Attached gifting revenue decreased year-on-year by 1.9%, whereas
orders decreased by 5.1%, reflecting a reduction in promotional
discounting and a modest increase in the proportion of customers
choosing to attach a gift.
Standalone gifting, which is not a strategic focus and is more
susceptible to the impact of economic downturn, decreased by 20.9%
year-on-year.
Gross margin rate
Six months Six months H1 FY24
ended ended Year-on-year
31 October 2023 31 October 2022 growth %
------------------------------------- ----------------- ----------------- --------------
Moonpig gross margin (%) 55.5% 51.9% 3.6%pts
Greetz gross margin (%) 46.8% 45.7% 1.1%pts
------------------------------------- ----------------- ----------------- --------------
Moonpig and Greetz gross margin (%) 53.8% 50.6% 3.2%pts
Experiences gross margin (%) 91.8% 93.7% (1.9)%pts
------------------------------------- ----------------- ----------------- --------------
Group gross margin (%) 58.5% 54.1% 4.4%pts
------------------------------------- ----------------- ----------------- --------------
Management has maintained its focus on margin rate improvement,
increasing the gross margin rate across Moonpig and Greetz to 53.8%
(H1 FY23: 50.6%). This reflects benefit from opening new
operational facilities at Tamworth, the impact of greeting card
price changes and changes to shipping prices for gifts. We have
maintained intake margin on gifts at both segments.
Experiences gross margin decreased to 91.8% (H1 FY23: 93.7%),
which reflects provisions against gift box inventory in view of the
roll-out of a new visual identity for the Red Letter Days and
Buyagift brands. The relatively high gross margin rate reflects the
nature of revenue recognised at this segment, which comprises
agency commission earned from partners for the distribution of
experiences, rather than gross transactional value. Cost of goods
at the Experiences segment relates primarily to packaging and
distribution for those orders where the consumer elects to pay for
a physical gift box rather than digital delivery.
Adjusted EBITDA margin
Six months Six months H1 FY24
ended ended Year-on-year
31 October 2023 31 October 2022 growth %
--------------------------------------------- ----------------- ----------------- --------------
Moonpig Adjusted EBITDA margin % 30.3% 25.3% 5.0%pts
Greetz Adjusted EBITDA margin % 16.8% 16.4% 0.4%pts
--------------------------------------------- ----------------- ----------------- --------------
Moonpig and Greetz Adjusted EBITDA margin % 27.7% 23.4% 4.3%pts
Experiences Adjusted EBITDA margin % 23.6% 33.0% (9.4)%pts
----------------- ----------------- --------------
Group Adjusted EBITDA margin % 27.2% 24.2% 3.0%pts
--------------------------------------------- ----------------- ----------------- --------------
Adjusted EBITDA margin rate at Moonpig increased by 5.0%pts,
reflecting pass-through of the higher gross margin rate. At Greetz,
Adjusted EBITDA margin rate increased by 0.4%pts, which is lower
than the rise in gross margin rate and reflects the operational
leverage impact of lower revenue. Across both businesses, we have
applied disciplined management of indirect costs.
Experiences Adjusted EBITDA margin rate was 23.6%, which
compares to a pro forma Adjusted EBITDA margin rate of 27.5% for H1
FY23, stated as if the business had been owned throughout the half
year. The year-on-year movement reflects provisions against gift
box inventory and limited, planned investment in staff costs to
raise capability. The reported prior year Adjusted EBITDA margin
rate of 33.0% relates to only part of the year and is therefore
impacted by the seasonality of trading, which is typically lower in
the pre-acquisition months that were excluded from
consolidation.
Given the external environment we have managed costs cautiously,
deferring investments into the second half of the year to maintain
flexibility. Expectations for absolute full year Adjusted EBITDA
remain unchanged.
Alternative Performance Measures
The Group has identified certain Alternative Performance
Measures ("APMs") that it believes provide additional useful
information on the performance of the Group. These APMs are not
defined within IFRS and are not intended to substitute or be
considered as superior to IFRS measures. Furthermore, these APMs
may not necessarily be comparable to similarly titled measures used
by other companies. The Group's Directors and management use these
APMs in conjunction with IFRS measures when budgeting, planning and
reviewing business performance. Executive management bonus targets
include an Adjusted EBITDA measure and long-term incentive plans
include an Adjusted Basic Pre-Tax Earnings Per Share ("EPS")
measure.
Six months ended Six months ended
31 October 2023 31 October 2022
-------------------------------------- ------------------------------------- -------------------------------------
Adjusted Adjusting IFRS Adjusted Adjusting IFRS
Measures(1) Items(1) Measures Measures(1) Items(1) Measures
-------------------------------------- ------------- ---------- ---------- ------------- ---------- ----------
Pre-IPO share-based payment charges
(GBPm) - (0.6) - - (3.5) -
Pre-IPO bonus awards (GBPm) - (1.2) - - (1.9) -
M&A related transaction costs (GBPm) - - - - (4.4) -
-------------------------------------- ------------- ---------- ---------- ------------- ---------- ----------
EBITDA margin (%) 27.2% - 26.0% 24.2% - 17.3%
EBITDA (GBPm) 41.4 (1.9) 39.6 34.6 (9.8) 24.7
Depreciation and amortisation (GBPm) (12.6) - (12.6) (9.8) - (9.8)
-------------------------------------- ------------- ---------- ---------- ------------- ---------- ----------
EBIT margin (%) 19.0% - 17.8% 17.4% - 10.4%
EBIT (GBPm) 28.9 (1.9) 27.0 24.8 (9.8) 14.9
Finance costs (GBPm) (8.1) - (8.1) (5.8) - (5.8)
-------------------------------------- ------------- ---------- ---------- ------------- ---------- ----------
PBT margin (%) 13.7% - 12.4% 13.2% - 6.4%
PBT (GBPm) 20.8 (1.9) 18.9 18.9 (9.8) 9.1
Taxation (GBPm) (5.1) 0.3 (4.8) (4.3) 1.0 (3.3)
-------------------------------------- ------------- ---------- ---------- ------------- ---------- ----------
PAT (GBPm) 15.6 (1.6) 14.1 14.6 (8.8) 5.8
-------------------------------------- ------------- ---------- ---------- ------------- ---------- ----------
Basic Earnings per Share (pence) 4.6p (0.5p) 4.1p 4.3p (2.6p) 1.7p
-------------------------------------- ------------- ---------- ---------- ------------- ---------- ----------
1 See Adjusting Items at Note 3 and Alternative Performance Measures at Note 19.
Note: Figures in this table are individually rounded to the nearest GBP0.1m. As a result,
there may be minor discrepancies in the subtotals and totals due to rounding differences.
The definitions for the adjusted measures in the table are as
follows:
-- Adjusted PAT is profit after taxation and before Adjusting Items.
-- Adjusted PBT is profit before taxation and Adjusting Items.
Adjusted PBT margin is Adjusted PBT divided by total revenue.
-- Adjusted EBIT is profit before taxation, interest and
Adjusting Items. Adjusted EBIT margin is Adjusted EBIT divided by
total revenue.
-- Adjusted EBITDA is profit before taxation, interest,
depreciation, amortisation and Adjusting Items. Adjusted EBITDA
margin is Adjusted EBITDA divided by total revenue.
Adjusting Items comprise:
-- Pre-IPO incentive scheme costs, consisting of GBP0.6m (H1
FY23: GBP3.5m) share-based payment charges and GBP1.2m (H1 FY23:
GBP1.9m) cash bonus awards. These relate to one-off compensation
arrangements granted prior to IPO and set out in the Prospectus.
The Group treats these costs as Adjusting Items as they relate to
one-off awards implemented whilst the Group was under private
equity ownership and are not part of the Group's ongoing
remuneration arrangements.
-- M&A-related transaction costs of GBPnil (H1 FY23:
GBP4.4m). The prior year costs comprise advisers' fees, stamp duty
and other costs directly relating to the acquisition of
Experiences. The Group treats these costs as Adjusting Items as
they are not part of normal business operations.
Determining which items should be classified as Adjusting Items
involves the exercise of judgement. Our classification of items as
Adjusting Items has remained unchanged year-on-year. We do not
classify the following as Adjusting Items on the basis that they
are recurring costs associated with delivery of financial
performance. However, we have observed that certain users of our
accounts adopt a different approach in their own financial
modelling and have therefore provided the information below to
assist these users:
Six months Six months
ended 31 ended 31
October 2023 October 2022
-------------------------------------------------------------------------------------- -------------- --------------
Amortisation of acquired intangible assets (GBPm) 4.2 3.1
Share-based payment charges relating to operation of post-IPO Remuneration Policy(1)
(GBPm) 2.0 1.3
-------------------------------------------------------------------------------------- -------------- --------------
1 Share-based payment charges are stated inclusive of national
insurance of GBP0.2m (H1 FY23: GBP0.1m).
Profit before taxation ("PBT")
Group PBT increased by 107.8%, from GBP9.1m in H1 FY23 to
GBP18.9m in H1 FY24, as a lower charge for Adjusting Items was
offset in part by higher depreciation and amortisation and higher
finance costs.
Depreciation and amortisation increased to GBP12.6m (H1 FY23:
GBP9.8m). The year-on-year movement is predominantly driven by a
GBP1.6m increase in the amortisation of internally generated
intangible assets due to the decision taken in FY22 to increase
investment in our technology and GBP1.1m relating to a full six
months' charge for the amortisation of acquired intangible assets
arising on business combination with Experiences. There has been no
change in the Group's accounting policies or practices relating to
the capitalisation of costs as internally generated intangible
assets. We continue to amortise internally generated intangible
assets over a relatively short useful life of three years.
Finance costs increased from GBP5.8m in H1 FY23 to GBP8.1m in H1
FY24:
-- Interest on bank borrowings increased from GBP5.0m in H1 FY23
to GBP6.5m in H1 FY24. The impact of a higher reference rate on the
unhedged element of the Group's interest rate exposure was offset
in part by lower draw-down of the Group's revolving credit
facilities, which were unutilised as at 31 October 2023.
-- Amortisation of fees increased from GBP0.9m in H1 FY23 to
GBP1.1m in H1 FY24, reflecting a full six-month amortisation charge
for: (i) arrangement fees for the additional revolving credit
facility put in place in July 2022; and (ii) up-front fees for the
interest rate cap put in place in August 2022.
-- Interest on lease liabilities remained flat year on year at GBP0.4m.
-- There was a GBP0.6m movement in the monetary foreign exchange
impact of Euro-denominated intercompany loan balances. The Group
recognised a GBP0.1m loss (H1 FY23: GBP0.4m gain), with the
corresponding intercompany gain recognised in Other Comprehensive
Income in accordance with IAS 21.
The taxation charge of GBP4.8m (H1 FY23: GBP3.3m) represents an
effective taxation rate of 25.5% (H1 FY23: 35.9%). This exceeded
the prevailing rate of corporation tax of 25% in the UK primarily
because of the impact of the Group's legacy share schemes.
Expressed as a percentage of Adjusted Profit Before Taxation, the
effective tax rate was 23.2% (H1 FY23: 22.8%).
Earnings Per Share ("EPS")
Basic EPS for H1 FY24 was 4.1p (H1 FY23: 1.7p) and Adjusted
Basic EPS, which is stated before Adjusting Items was 4.6p (H1
FY23: 4.3p). After accounting for the effect of employee share
arrangements, diluted earnings per share was 4.0p (H1 FY23:
1.7p).
The calculation of basic EPS is based on the weighted average
number of ordinary shares outstanding during the period of
342,890,896 (H1 FY23: 339,036,292). Throughout H1 FY23, the total
issued share capital was 342,111,621, however 3,075,329 shares
issued to employees prior to the IPO remained subject to recall
within a two-year period, until January 2023, if employment
conditions were not met. These shares are included in the number of
ordinary shares outstanding for H1 FY24 but are excluded for H1
FY23 in accordance with paragraph 24 of IAS 33 on the basis that
they were contingently returnable throughout that period.
During H1 FY24, 1,165,744 shares were issued to employees
following vesting of the first tranche of the pre-IPO awards.
Cash flow
Cash generated from/(used in) operating activities was GBP21.3m
(H1 FY23: (GBP4.2m)):
There was a cash inflow in the period of GBP3.4m (H1 FY23:
GBP1.1m outflow), due to lower inventories driven by improved
operational efficiency. I nventory at 31 October 2023 was GBP8.9m
(H1 FY23: GBP12.6m) .
There was a trade and other payables working capital outflow in
the period of GBP24.1m (H1 FY23: GBP30.8m).
-- The outflow at Moonpig and Greetz was in line with the
previous period at GBP10.3m (H1 F23: GBP10.2m outflow), reflecting
the seasonality of the working capital cycle.
-- The outflow at Experiences was GBP13.8m (H1 FY23: GBP20.6m).
The year-on-year reduction in outflow reflects the one-off
settlement in H1 FY23 of GBP13.2m of legacy incentive obligations
associated with the acquisition of Experiences, which were fully
provided for in the opening balance sheet.
The merchant accrual as at 31 October 2023 was GBP36.8m (H1
FY23: GBP49.3m). A payables balance is recognised when a gift
experience is sold to a consumer to reflect the expected future
liability to the merchant; this balance is settled through the
remittance of cash to the merchant following redemption of the
voucher by the recipient. The year-on-year reduction in merchant
accrual balance reflects the unwind of the impact of a higher
extension rate seen through Covid.
Capital expenditure decreased year-on-year to GBP7.8m (H1 FY23:
GBP14.2m) reflecting one-off expenditure on plant and equipment in
the prior year to fit out new operational facilities in Tamworth,
UK and Almere in the Netherlands.
Adjusted Operating Cash Conversion
The Group is cash generative on an annual basis, with cash
inflows strongly weighted into the second half of each financial
year. The Group generated an operating cash inflow of GBP15.1m in
H1 FY24, compared to GBP1.1m in H1 FY23. Adjusted Operating Cash
Conversion increased from 3% in H1 FY23 to 36% in H1 FY24,
reflecting non-recurrence of prior year capital expenditure on new
operational facilities at Tamworth in the UK and Almere in the
Netherlands.
Six months ended Six months ended
31 October 2023 31 October 2022
GBPm GBPm
---------------------------------------------------------------- ----------------- -----------------
Profit before taxation 18.9 9.1
Add back: Finance costs 8.1 5.8
Add back: Adjusting Items (excluding share-based payments) 1.2 6.3
Add back: Adjusting Items - Share-based payments 0.6 3.5
Add back: Depreciation and amortisation 12.6 9.8
---------------------------------------------------------------- ----------------- -----------------
Adjusted EBITDA 41.4 34.6
Less: Capital expenditure (fixed and intangible assets) (7.8) (14.2)
Adjust: Impact of share-based payments(1) 2.0 0.9
Add back: Decrease / (increase) in inventories(2) 3.4 (1.1)
Add back: Decrease in trade and other receivables(2) 0.2 1.8
Add back: (Decrease) in trade and other payables(2) (24.1) (20.9)
---------------------------------------------------------------- -----------------
Operating cash flow(3) 15.1 1.1
Adjusted Operating Cash Conversion 36% 3%
Add back: Capital expenditure 7.8 14.2
Add back: (Decrease) / increase in debtors and creditors with
undertakings formerly under common control - 0.3
---------------------------------------------------------------- ----------------- -----------------
Less: Adjusting Items (excluding share-based payments) (1.2) (6.3)
Less: Research and development tax credit (0.4) (0.3)
---------------------------------------------------------------- ----------------- -----------------
Cash generated from underlying operating activities 21.3 9.0
---------------------------------------------------------------- ----------------- -----------------
Settlement of M&A related employee bonuses at Experiences (3) - (13.2)
---------------------------------------------------------------- ----------------- -----------------
Cash generated from / (used in) operating activities 21.3 (4.2)
---------------------------------------------------------------- ----------------- -----------------
1 Reflecting the non-cash share-based payment charge recognised within Adjusted EBITDA, net
of NI on the share-based payments recognised below EBITDA.
2 Working capital movements for the six months ended 31 October 2022 have been adjusted for
the opening balances arising upon acquisition of Experiences.
3 Operating cash flow excludes settlement of legacy incentive obligations in H1 FY23 associated
with the acquisition, which were fully provided for in the opening balance sheet.
Operating cash flow and Adjusted Operating Cash Conversion are
non-GAAP measures. Adjusted Operating Cash Conversion is defined as
operating cash flow divided by Adjusted EBITDA, expressed as a
ratio. Adjusted Operating Cash Conversion informs management and
investors about the cash operating cycle of the business and how
efficiently operating profit is converted into cash.
Capital structure
Net debt decreased during the period, from GBP167.7m at 30 April
2023 to GBP166.9m as at 31 October 2023. Net leverage improved to
1.83x (30 April 2023: 1.97x) through growth in earnings. Net debt
is a non-GAAP measure and is defined as total borrowings, inclusive
of lease liabilities, less cash and cash equivalents.
As at As at As at
31 October 2023 31 October 2022 30 April 2023
GBPm GBPm GBPm
------------------------------------------------------------- ---------------- ---------------- --------------
Borrowings(1) (171.4) (229.9) (170.5)
Cash and cash equivalents 22.4 41.0 22.4
------------------------------------------------------------- ---------------- ---------------- --------------
Borrowings less cash and cash equivalents (149.0) (188.9) (148.1)
Lease liabilities (18.0) (19.8) (19.5)
------------------------------------------------------------- ---------------- ---------------- --------------
Net debt (166.9) (208.8) (167.7)
------------------------------------------------------------- ---------------- ---------------- --------------
Last twelve months Adjusted EBITDA 91.1 74.4 84.2
Net debt to last twelve months' Adjusted EBITDA 1.83:1 2.80 :1 1.99:1
Last twelve months pro forma Adjusted EBITDA(2) 91.1 85.1 85.1
Net debt to last twelve months pro forma Adjusted EBITDA (2) 1.83:1 2.45:1 1.97:1
Committed debt facilities (GBPm) 255.0 255.0 255.0
------------------------------------------------------------- ---------------- ---------------- --------------
1 Borrowings are stated net of capitalised loan arrangement fees
and hedging instrument fees of GBP3.7m as at 31 October 2023 (31
Oct 2022: GBP5.2m, 30 April 2023: GBP4.6m).
2 Pro forma Adjusted EBITDA is stated inclusive of a full year
of profit from acquired businesses.
The Group maintains considerable liquidity headroom, with bank
facilities of GBP255.0m. These facilities consist of a term loan of
GBP175.0m with a bullet repayment profile and Revolving Credit
Facilities of GBP80.0m. The facilities agreement runs until January
2026 with the facilities committed until December 2025.
The Group has significant covenant headroom. Bank facilities are
subject to a single covenant of net debt to last twelve months' pro
forma Adjusted EBITDA which is tested six-monthly.
The Group's interest rate hedging arrangements now comprise an
interest rate cap in place with a cap strike rate of 3.0000% on
GBP70m notional until 30 November 2024. This follows the expiry of
an interest rate swap (a rate of 2.4725% on GBP90m notional) on 30
November 2023.
The Group's short term capital allocation priority remains
deleveraging. We do not intend to pay a dividend as we continue to
invest in growth. We will continue to evaluate dividend policy over
time.
Outlook
Current trading remains in line with our overall expectations.
Consolidated revenue growth in recent weeks has continued the
positive trends seen in the first half, underpinned by growth at
the Moonpig brand. Whilst the external environment remains
challenging, our expectations for full year consolidated revenue
and Adjusted EBITDA remain unchanged. We remain focused on
deleveraging and expect to reduce the ratio of net debt to Adjusted
EBITDA by approximately 0.5x during FY24.
Technical guidance
Adjusting Items We anticipate that Adjusting Items will include a charge of approximately GBP4m in
FY24 relating
to the pre-IPO Award. There will be no charge in future years as the final tranche of
the
award vests on 30 April 2024, subject to continued employment.
The pre-IPO Award comprises a combination of cash and shares. The first tranche was
paid in
Q1 FY24 and the second tranche will be paid in Q1 FY25, resulting in an expected cash
outflow
of approximately GBP5m (excluding national insurance) and the issue of up to 1.4m
shares.
Capital expenditure We expect total tangible and intangible capital expenditure to revert to the
pre-Covid trend
level of around 5% of revenue in FY24 and we plan to maintain this ratio going
forward. Within
this, we expect that tangible capital expenditure will remain below GBP2m per year.
--------------------------------------------------------------------------------------
Depreciation and amortisation For FY24, we expect a total charge for depreciation and amortisation of between
GBP27m and
GBP29m:
* The combined charge for depreciation of purchased
tangible fixed assets and amortisation of internally
generated intangible fixed assets is expected to
increase to between GBP16m and GBP18m in FY24,
reflecting the fit-out of operational facilities in
FY23 and ongoing increased technology investment.
* We anticipate a charge of around GBP3m per annum for
the depreciation of IFRS 16 right-of-use assets,
reflecting the full-year impact of depreciation
related to new leases for Tamworth and Almere.
* We expect the amortisation of intangible fixed assets
arising on business combination to be approximately
GBP8m per annum (comprising approximately GBP6m
relating to Experiences and approximately GBP2m
relating to Greetz).
--------------------------------------------------------------------------------------
Net finance costs We expect net finance costs in FY24 to be in the region of GBP15m. This includes
approximately
GBP2m relating to the amortisation of fees and GBP1m of interest on lease
liabilities. We
have assumed no monetary gain or loss on Euro-denominated intercompany loan balances.
--------------------------------------------------------------------------------------
Taxation We expect the Group's effective tax rate to be approximately 26% of PBT in FY24,
reducing
to 25% in FY25 and thereafter. The expected effective rate for FY24 is higher than
the prevailing
tax rate in the UK and in the Netherlands due to the impact of the Group's legacy
share schemes.
--------------------------------------------------------------------------------------
STATEMENT OF DIRECTORS ' RESPONSIBILITIES
The directors confirm that these Condensed Consolidated Interim
Financial Statements have been prepared in accordance with UK
adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority and
that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
On behalf of the Board
Nickyl Raithatha Andy MacKinnon
Chief Executive Officer Chief Financial Officer
4 December 2023 4 December 2023
Condensed Consolidated Interim Financial Statements
Condensed Consolidated Income Statement
For the six-month period ended 31 October 2023
Note Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------------------ ---- ---------------- ----------------
Revenue 2 152,136 142,793
Cost of sales (63,096) (65,552)
------------------------------------ ---- ---------------- ----------------
Gross profit 89,040 77,241
------------------------------------ ---- ---------------- ----------------
Selling and administrative expenses (62,678) (62,959)
Other income 664 661
------------------------------------ ---- ---------------- ----------------
Operating profit 27,026 14,943
------------------------------------ ---- ---------------- ----------------
Finance costs 4 (8,131) (5,849)
------------------------------------ ---- ---------------- ----------------
Profit before taxation 18,895 9,094
------------------------------------ ---- ---------------- ----------------
Taxation 5 (4,812) (3,268)
------------------------------------ ---- ---------------- ----------------
Profit after taxation 14,083 5,826
------------------------------------ ---- ---------------- ----------------
Profit attributable to:
Equity holders of the Company 14,083 5,826
------------------------------------ ---- ---------------- ----------------
Earnings per share (pence)
Basic 6 4.1 1.7
Diluted 6 4.0 1.7
------------------------------------ ---- ---------------- ----------------
All activities relate to continuing operations.
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
Condensed Consolidated Statement of Comprehensive Income
For the six-month period ended 31 October 2023
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------------------------------------------------------ ---------------- ----------------
Profit for the period 14,083 5,826
------------------------------------------------------------------------- ---------------- ----------------
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations 12 (179)
Cash flow hedge:
------------------------------------------------------------------------ ---------------- ----------------
Fair value changes in the period 491 2,354
Cost of hedging reserve 17 225
Fair value movements on cash flow hedges transferred to profit and loss (1,285) (148)
------------------------------------------------------------------------- ---------------- ----------------
Total other comprehensive income (765) 2,252
------------------------------------------------------------------------- ---------------- ----------------
Total comprehensive income for the period 13,318 8,078
------------------------------------------------------------------------- ---------------- ----------------
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
Condensed Consolidated Balance Sheet
As at 31 October 2023
Note At 31 October At 31 October At 30 April
2023 2022 2023
GBP000 GBP000 GBP000
--------------------------------------------- ---- ------------- ------------- -----------
Non-current assets
Intangible assets 7 207,999 212,893 210,455
Property, plant and equipment 8 29,769 33,139 32,311
Other non-current assets 10 2,140 2,178 2,153
Financial derivatives 15 1,600 3,253 1,757
--------------------------------------------- ---- ------------- ------------- -----------
241,508 251,463 246,676
--------------------------------------------- ---- ------------- ------------- -----------
Current assets
Inventories 9 8,948 12,601 12,333
Trade and other receivables 10 6,184 10,073 6,331
Current tax receivable - 1,977 1,260
Financial derivatives 15 198 - 711
Cash and cash equivalents 22,443 40,972 22,394
--------------------------------------------- ---- ------------- ------------- -----------
37,773 65,623 43,029
--------------------------------------------- ---- ------------- ------------- -----------
Total assets 279,281 317,086 289,705
--------------------------------------------- ---- ------------- ------------- -----------
Current liabilities
Trade and other payables 11 88,927 98,241 110,119
Provisions for other liabilities and charges 2,011 1,486 1,617
Current tax payable 354 - 805
Contract liabilities 3,136 2,862 2,589
Lease liabilities 12 3,266 3,087 3,443
Borrowings 12 85 162 27
--------------------------------------------- ---- ------------- ------------- -----------
97,779 105,838 118,600
--------------------------------------------- ---- ------------- ------------- -----------
Non-current liabilities
Trade and other payables 11 1,006 7,331 4,858
Borrowings 12 171,332 229,751 170,493
Lease liabilities 12 14,691 16,735 16,082
Deferred tax liabilities 9,748 11,535 10,978
Provisions for other liabilities and charges 2,443 2,709 2,413
--------------------------------------------- ---- ------------- ------------- -----------
199,220 268,061 204,824
--------------------------------------------- ---- ------------- ------------- -----------
Total liabilities 296,999 373,899 323,424
--------------------------------------------- ---- ------------- ------------- -----------
Equity
Share capital 14 34,328 34,211 34,211
Share premium 14 278,083 278,083 278,083
Merger reserve (993,026) (993,026) (993,026)
Retained earnings 621,896 583,068 603,849
Other reserves 14 41,001 40,851 43,164
--------------------------------------------- ---- ------------- ------------- -----------
Total equity (17,718) (56,813) (33,719)
--------------------------------------------- ---- ------------- ------------- -----------
Total equity and liabilities 279,281 317,086 289,705
--------------------------------------------- ---- ------------- ------------- -----------
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
Condensed Consolidated Statement of Changes in Equity
For the six-month period ended 31 October 2023
Note Share Share Merger Retained Other Total
capital premium reserve earnings reserves equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Balance at 1 May 2022 34,211 278,083 (993,026) 576,507 34,906 (69,319)
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Profit for the period - - - 5,826 - 5,826
Foreign currency translation reserve
reclassification - - - 735 (735) -
Other comprehensive income:
Exchange differences on translation of
foreign operations - - - - (179) (179)
Cash flow hedges:
Fair value changes in the period - - - - 2,354 2,354
Cost of hedging reserve - - - - 225 225
Fair value movements on cash flow hedges
transferred to profit and loss - - - - (148) (148)
Total comprehensive income for the period - - - 6,561 1,517 8,078
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Share-based payments 13 - - - - 4,428 4,428
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
As at 31 October 2022 34,211 278,083 (993,026) 583,068 40,851 (56,813)
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Profit for the period - - - 20,781 - 20,781
Other comprehensive income:
Exchange differences on translation of
foreign operations - - - - 21 21
Cash flow hedges:
Fair value changes in the period - - - - (463) (463)
Cost of hedging reserve - - - - (99) (99)
Fair value movements on cash flow hedges
transferred to profit and loss - - - - 12 12
Total comprehensive income for the period - - - 20,781 (529) 20,252
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Share-based payments 13 - - - - 2,842 2,842
As at 30 April 2023 34,211 278,083 (993,026) 603,849 43,164 (33,719)
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Profit for the period - - - 14,083 - 14,083
Other comprehensive income:
Exchange differences on translation of
foreign operations - - - - 12 12
Cash flow hedges:
-------------------------------------------- ------------ -------- --------- --------- -------- ----------
Fair value changes in the period - - - - 491 491
Cost of hedging reserve - - - - 17 17
Fair value movements on cash flow hedges
transferred to profit and loss - - - - (1,285) (1,285)
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Total comprehensive income for the period - - - 14,083 (765) 13,318
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
Share-based payments 13 - - - - 2,578 2,578
Deferred tax on share-based payments - - - - 105 105
Share options exercised 13 117 - - 3,964 (4,081) -
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
As at 31 October 2023 34,328 278,083 (993,026) 621,896 41,001 (17,718)
-------------------------------------------- ------ -------- -------- --------- --------- --------- ---------
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
Condensed Consolidated Cash Flow Statement
For the six-month period ended 31 October 2023
Note Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
---------------------------------------------------------------------------- ---- ---------------- ----------------
Cash flow from operating activities
Profit before taxation 18,895 9,094
Adjustments for:
Depreciation and amortisation 7,8 12,553 9,788
Finance costs 4 8,131 5,849
R&D tax credit (366) (300)
Share-based payment charges 13 2,578 4,428
Changes in working capital:
Decrease/(increase) in inventories 3,385 (1,103)
Decrease/(increase) in trade and other receivables 192 (1,385)
(Decrease) in trade and other payables (24,053) (30,847)
Net (increase)/decrease in trade and other receivables and payables with
undertakings formerly
under common control (31) 270
---------------------------------------------------------------------------- ---- ---------------- ----------------
Cash generated from / (used in) operating activities 21,284 (4,206)
---------------------------------------------------------------------------- ---- ---------------- ----------------
Income tax paid (4,925) (5,036)
---------------------------------------------------------------------------- ---- ---------------- ----------------
Net cash generated from / (used in) operating activities 16,359 (9,242)
---------------------------------------------------------------------------- ---- ---------------- ----------------
Cash flow from investing activities
Capitalisation of intangible assets 7 (7,001) (6,665)
Purchase of property, plant and equipment 8 (813) (7,574)
Acquisition of subsidiary, net of cash acquired - (88,598)
---------------------------------------------------------------------------- ---- ---------------- ----------------
Net cash (used in) investing activities (7,814) (102,837)
---------------------------------------------------------------------------- ---- ---------------- ----------------
Cash flow from financing activities
Proceeds from new borrowings 12 10,000 60,000
Payment of fees related to borrowings - (988)
Repayment of borrowings 12 (10,000)
Payment of interest rate cap premium - (940)
Interest paid on borrowings 12 (7,737) (4,879)
Interest received/(paid) on swap derivatives 1,331 (148)
Lease liabilities paid 12 (1,799) (1,195)
Interest paid on leases 12 (412) (423)
Net cash generated (used in) / generated from financing activities (8,617) 51,427
---------------------------------------------------------------------------- ---- ---------------- ----------------
Net cash flows (used in) operating, investing, and financing activities (72) (60,652)
Differences on exchange 121 (53)
---------------------------------------------------------------------------- ---- ---------------- ----------------
Net increase / (decrease) in cash and cash equivalents in the period 49 (60,705)
---------------------------------------------------------------------------- ---- ---------------- ----------------
Net cash and cash equivalents at beginning of the period 22,394 101,677
---------------------------------------------------------------------------- ---- ---------------- ----------------
Net cash and cash equivalents at the end of the period 22,443 40,972
---------------------------------------------------------------------------- ---- ---------------- ----------------
The accompanying notes are an integral part of these Condensed
Consolidated Interim Financial Statements.
Notes to the Condensed Consolidated Interim Financial
Statements
1 General information
Moonpig Group plc (the "Company") is a public limited company
incorporated in the United Kingdom under the Companies Act 2006,
whose shares are traded on the London Stock Exchange. The Condensed
Consolidated Interim Financial Statements of the Company as at and
for the period ended 31 October 2023 comprise the Company and its
interest in subsidiaries (together referred to as the "Group"). The
Company is domiciled in the United Kingdom and its registered
address is Herbal House, 10 Back Hill, London, EC1R 5EN, United
Kingdom. The Company's LEI number is 213800VAYO5KCAXZHK83.
Basis of preparation
The annual financial statements of Moonpig Group plc will be
prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006. The
annual financial statements will also comply with International
Financial Reporting Standards ("IFRS") as adopted by the United
Kingdom. These Condensed Consolidated Interim Financial Statements
for the six-month period ended 31 October 2023 have been prepared
in accordance with UK adopted International Accounting Standard
("IAS") 34, 'Interim Financial Reporting' and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct
Authority.
These Condensed Consolidated Interim Financial Statements do not
constitute statutory accounts as defined by the Companies Act 2006,
Section 435. This report should be read in conjunction with the
Group's Annual Report and Accounts as at and for the year ended 30
April 2023 ("last Annual Report and Accounts"), which were prepared
in accordance with IFRSs as adopted by the United Kingdom. The last
Annual Report and Accounts have been filed with the Registrar of
Companies. The auditors' report on these accounts was
unqualified.
All figures presented are rounded to the nearest thousand
(GBP000), unless otherwise stated.
The Condensed Consolidated Interim Financial Statements have
been prepared on a going concern basis and under the historical
cost convention.
The Condensed Consolidated Interim Financial Statements were
approved by the Board of Directors on 4 December 2023 and have been
reviewed and not audited by PricewaterhouseCoopers LLP, the
auditors, and its report is set out at the end of this
document.
Consideration of climate change
In preparing the Condensed Consolidated Interim Financial
Statements, the Directors have considered the impact of climate
change, particularly in the context of the risks identified in the
Taskforce on Climate-related Financial Disclosures ("TCFD") within
the Annual Report and Accounts for the year ended 30 April 2023.
There has been no material impact identified on the financial
reporting judgements and estimates. In particular, the Directors
considered the impact of climate change in respect of the following
areas:
-- Going concern of the Group.
-- Cash flow forecasts used in the impairment assessments of
non-current assets including goodwill and other intangible
assets.
-- Carrying amount and useful economic lives of property, plant and equipment.
Whilst there is currently no material financial impact expected
from climate change in the short or medium term, the Directors will
assess climate-related risks at each reporting date against
judgements and estimates made in preparation of the Group's
Condensed Consolidated Interim Financial Statements and Annual
Report and Accounts.
Going concern
These Condensed Consolidated Interim Financial Statements have
been prepared on a going concern basis. The Group ended the
six-month period with a cash and cash equivalents balance of
GBP22,443,000 (30 April 2023: GBP22,394,000). The Group has a
facilities agreement comprising a term loan of GBP175,000,000 and
RCF of GBP80,000,000, provided by a syndicate of banks. All
facilities provided under the facilities agreement are committed
until December 2025. Lease liabilities arising are also reported in
borrowings. As at 31 October 2023 the RCF is undrawn (H1 FY23:
GBP60,000,000 drawn down).
The term loan and amounts drawn under the RCF bear interest at a
floating rate linked to SONIA, plus a margin.
On 1 August 2022, the Group executed two interest rate
derivative agreements, with the intention of hedging its exposure
to increases in SONIA for broadly three quarters of its current
expected future bank debt (net of cash) until November 2024. The
Group's interest rate hedging arrangements now comprise an interest
rate cap with a cap strike rate of 3.0000% on GBP70m notional until
30 November 2024. This follows the expiry of an interest rate swap
(a rate of 2.4725% on GBP90m notional) on 30 November 2023.
The Group's facilities agreement is subject to a Total Net Debt
to last twelve months' pro forma Adjusted EBITDA covenant of 3.50x.
It is tested on a semi-annual basis, based on Total Net Debt and
last twelve months' pro forma Adjusted EBITDA as defined in the
facilities agreement. The Group has complied with all covenants
from entering that agreement until the date of these Condensed
Consolidated Interim Financial Statements and is forecast to comply
with these during the going concern assessment period.
The Directors have reviewed a downside scenario, which is
considered to be severe but plausible and the resulting impact on
the Group's performance and position. In this scenario, which
models the possibility that a downturn in consumer demand could
lead to a sustained adverse impact on trading in addition to the
impact of a temporary closure in one of the Group's fulfilment
sites, the Group continues to have sufficient resources to continue
operating. Should more severe impacts occur, further mitigating
actions would be available to the Group.
The Directors also reviewed the results of reverse stress
testing performed to provide an illustration of the cumulative
extent to which existing customer purchase frequency and levels of
new customer acquisition would need to deteriorate to either
trigger a breach in the Group's covenants under the facilities
agreement or else exhaust liquidity. The probability of this
scenario occurring was deemed to be remote given the strong cash
conversion of the Group and the resilient nature of its business
model.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for at least 12 months from the date of
signing the Condensed Consolidated Interim Financial
Statements.
Accounting policies
The Condensed Consolidated Interim Financial Statements have
been prepared in accordance with the accounting policies set out on
pages 147-153 of the Group's Annual Report and Accounts for the
year ended 30 April 2023. During the period the Group launched a
subscription membership service which is addressed by the
additional revenue accounting policy set out below:
Revenue recognition
The Group operates subscription membership schemes whereby
customers are charged an upfront annual fee in return for discounts
on subsequent greeting card purchases and other ancillary benefits
over the following 12-month period. In addition, for new members,
the initial greeting card purchase is typically subject to a
discount.
Revenue is measured at the transaction price, which is the
standalone selling price of the subscription membership. The
membership contract gives rise to a performance obligation because
it grants the customer an option to acquire additional goods and
services and that option provides material rights that the customer
would not receive without entering that contract. Revenue is
recognised as goods or services are transferred in line with the
exercise of those material rights.
The material rights provided to subscription members currently
comprise:
-- The discount on the initial greeting card purchase, in the
first year of subscription membership only, to the extent that this
exceeds the price that a customer could access through generally
available discounts.
-- Expected usage of the discount on subsequent card purchases,
to the extent that this exceeds the price that a customer could
otherwise access through generally available discounts.
-- Expected usage of ancillary benefits, such as free postcards.
Taxation
Taxes on income in the interim periods are accrued using the
effective tax rate that would be applicable to expected annual
profit or loss.
Critical accounting judgements and estimates
In preparing these Condensed Consolidated Interim Financial
Statements, management has made judgements, estimates and
assumptions that affect the application of the accounting policies
and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively.
The area of judgement which has the greatest potential effect on
the amounts recognised in these Condensed Consolidated Interim
Financial Statements is the capitalisation of internally generated
assets, whilst the areas of estimates and assumption that have the
greatest potential effect are the useful life of internally
generated assets, the merchant accrual and the carrying amount of
Experiences segment Goodwill. These are consistent with matters
disclosed on pages 146 and 147 in the FY23 Annual Report and
Accounts.
2 Segmental analysis
The chief operating decision maker ("CODM") reviews external
revenue and Adjusted EBITDA to evaluate segment performance and
allocate resources to the overall business.
" Adjusted EBITDA" is a non-GAAP measure. Adjustments are made
to the statutory IFRS results to arrive at an underlying result
which is in line with how the business is managed and measured on a
day-to-day basis. Adjustments are made for items that are
individually important to understand the financial performance. If
included, these items could distort understanding of the
performance for the period and the comparability between periods.
Management applies judgement in determining which items should be
excluded from underlying performance. See Note 3 for details of
these adjustments.
The three segments (Moonpig, Greetz and Experiences) are the
reportable segments for the Group, with Moonpig and Experiences
based in the UK and Greetz in the Netherlands. The three segments
form the focus of the Group's internal reporting systems and are
the basis used by the CODM for assessing performance and allocating
resources. Finance costs are not allocated to the reportable
segments, as this activity is managed centrally.
Most of the Group's revenue is derived from retail sales to
consumers in the cards and gifting markets. No single customer
accounted for 10% or more of the Group's revenue. In common with
many retailers, revenue and trading profit are subject to seasonal
fluctuations and are weighted towards the second half of the
financial year which includes the key peak periods for the
business.
The following table shows revenue by segment that reconciles to
the consolidated revenue for the Group.
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
----------------------- ---------------- ----------------
Moonpig 108,016 103,018
Greetz 25,343 28,085
Experiences 18,777 11,690
----------------------- ---------------- ----------------
Total external revenue 152,136 142,793
----------------------- ---------------- ----------------
The following table shows revenue by key geography that
reconciles to the consolidated revenue for the Group. The
geographical split of revenue is based on the website from which
the customer order is placed:
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
----------------------- ---------------- ----------------
UK 123,289 111,985
Netherlands 25,343 28,085
Rest of the world(1) 3,504 2,723
----------------------- ---------------- ----------------
Total external revenue 152,136 142,793
----------------------- ---------------- ----------------
1 Rest of the world revenue includes Ireland, the USA and Australia.
The following table shows the information regarding assets by
segment that reconciles to the consolidated results of the
Group.
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------------ ---------------- ----------------
Moonpig
Non-current assets(1) 39,729 40,893
Capital expenditure(2) (408) (5,563)
Intangible expenditure (5,328) (6,415)
Depreciation and amortisation (6,907) (4,883)
------------------------------ ---------------- ----------------
Greetz
Non-current assets(1) 28,160 27,319
Capital expenditure(2) (378) (7,353)
Intangible expenditure - -
Depreciation and amortisation (1,831) (2,115)
------------------------------ ---------------- ----------------
Experiences
Non-current assets(1) 169,879 177,820
Capital expenditure (27) (15)
Intangible expenditure (1,673) (250)
Depreciation and amortisation (3,815) (2,790)
------------------------------ ---------------- ----------------
Group
Non-current assets(1) 237,768 246,032
Capital expenditure(2) (813) (12,931)
Intangible expenditure (7,001) (6,665)
Depreciation and amortisation (12,553) (9,788)
------------------------------ ---------------- ----------------
1 Comprises intangible assets and property, plant and equipment
(inclusive of ROU assets).
2 Includes ROU assets capitalised in the period of GBP276,000
(31 October 2022: GBP5,325,000).
The Group's measure of segment profit and Adjusted EBITDA
excludes the Adjusting Items set out at Note 3; refer to
Alternative Performance Measures ("APMs") at Note 19 for
calculation.
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
Adjusted EBITDA
------------------------------------ ---------------- ----------------
Moonpig 32,745 26,090
Greetz 4,253 4,600
Experiences 4,438 3,861
------------------------------------ ---------------- ----------------
Group Adjusted EBITDA 41,436 34,551
------------------------------------ ---------------- ----------------
Depreciation and amortisation
------------------------------------ ---------------- ----------------
Moonpig 6,907 4,883
Greetz(1) 1,831 2,115
Experiences(2) 3,815 2,790
------------------------------------ ---------------- ----------------
Group depreciation and amortisation 12,553 9,788
------------------------------------ ---------------- ----------------
1 Includes amortisation arising on consolidation of intangibles
forming part of the Greetz Cash Generating Unit ("CGU").
2 Includes amortisation arising on consolidation of intangibles
forming part of the Experiences CGU.
The following table shows Adjusted EBITDA that reconciles to the
consolidated results of the Group.
Note Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------------ ---- ---------------- ----------------
Adjusted EBITDA 19 41,436 34,551
------------------------------ ---- ---------------- ----------------
Depreciation and amortisation 7,8 (12,553) (9,788)
Adjusting items 3 (1,857) (9,820)
------------------------------ ---- ---------------- ----------------
Operating profit 27,026 14,943
------------------------------ ---- ---------------- ----------------
Finance costs 4 (8,131) (5,849)
------------------------------ ---- ---------------- ----------------
Profit before taxation 18,895 9,094
------------------------------ ---- ---------------- ----------------
Taxation 5 (4,812) (3,268)
------------------------------ ---- ---------------- ----------------
Profit for the period 14,083 5,826
------------------------------ ---- ---------------- ----------------
3 Adjusting Items
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------------------------- ---------------- ----------------
Pre-IPO bonus awards (1,245) (1,899)
Pre-IPO share-based payment charges (612) (3,530)
M&A related transaction costs - (4,391)
------------------------------------------- ---------------- ----------------
Total adjustments made to operating profit (1,857) (9,820)
------------------------------------------- ---------------- ----------------
Pre-IPO bonus awards
Pre-IPO bonus awards are one-off cash-settled bonuses and the
cash component of the Pre-IPO schemes, awarded in relation to the
IPO process that completed during the year ended 30 April 2021.
Pre-IPO share-based payment charges
Pre-IPO share-based payment charges relate to the Legacy
Schemes, Pre-IPO awards that were granted in relation to the IPO
process that completed during the year ended 30 April 2021.
M&A-related transaction costs
M&A related transaction costs relate to fees and costs
incurred in relation to the acquisition of the Experiences
segment.
Cash paid in relation to adjusting items in the period totalled
GBP4,917,000 (H1 FY23: GBP5,419,000).
4 Net Finance costs
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
----------------------------------------------------------- ---------------- ----------------
Interest payable on leases (412) (423)
Bank interest payable (6,464) (4,965)
Amortisation of capitalised borrowing costs (839) (790)
Amortisation of interest rate cap premium (235) (117)
Interest on discounting of financial liability (44) -
Net foreign exchange (loss) / gain on financing activities (137) 446
----------------------------------------------------------- ---------------- ----------------
Net finance costs (8,131) (5,849)
----------------------------------------------------------- ---------------- ----------------
5 Taxation
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
----------------------------------------- ---------------- ----------------
Total current tax 6,278 3,897
----------------------------------------- ---------------- ----------------
Total deferred tax (1,466) (629)
----------------------------------------- ---------------- ----------------
Total tax charge in the income statement 4,812 3,268
----------------------------------------- ---------------- ----------------
Effective tax rate % 25.5% 35.9%
----------------------------------------- ---------------- ----------------
The Finance Bill 2021 included legislation to increase the main
rate of corporation tax from 19% to 25% from 1 April 2023.
According to the Netherlands 2023 Tax Plan, the general
corporate income tax rate will remain 25.8% for the year 2023
whereby the first EUR200K profit is taxed at 19%.
6 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period. For the
purposes of this calculation, the weighted average number of
ordinary shares in issue during the period was 342,890,896 (H1
FY23: 339,036,292). The period-on-period increase reflects the
release of 3,075,329 shares, on 7 January 2023, from repurchase
obligations that were deducted from ordinary shares outstanding at
31 October 2022 as well as the issue of 1,165,744 shares in order
to satisfy the Group's obligation to its employees in relation to
the vested Tranche 1 of the pre-IPO share based payment scheme in
April 2023 (see Note 13 for further details):
Six months ended Six months ended
31 October 2023 31 October 2022
Shares in issue GBP000 GBP000
---------------------------------- ---------------- ----------------
As at 1 May 342,111,621 342,111,621
Issue of shares during the period 1,165,744 -
---------------------------------- ---------------- ----------------
As at 31 October 343,277,365 342,111,621
---------------------------------- ---------------- ----------------
31 October 2023 31 October 2022
Number of shares Number of shares
Weighted average number of shares in issue 342,890,896 342,111,621
Less: weighted average number of shares held subject to potential repurchase - (3,075,329)
----------------------------------------------------------------------------- ----------------- -----------------
Weighted average number of shares for calculating basic earnings per share 342,890,896 339,036,292
----------------------------------------------------------------------------- ----------------- -----------------
Diluted earnings per share
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potentially dilutive ordinary shares. The Group has potentially
dilutive ordinary shares arising from share options granted to
employees under the share schemes as detailed in Note 13 of these
Condensed Consolidated Interim Financial Statements.
Adjusted earnings per share
Earnings attributable to ordinary equity holders of the Group
for the period, adjusted to remove the impact of Adjusting Items
and the tax impact of these; divided by the weighted average number
of ordinary shares outstanding during the period.
31 October 2023 31 October 2022
Number of shares Number of shares
-------------------------------------------------------------------------- ----------------- -----------------
Weighted average number of shares for calculated basic earnings per share 342,890,896 339,036,292
Weighted average number of dilutive shares 10,876,799 10,052,323
-------------------------------------------------------------------------- ----------------- -----------------
Total number of shares for calculated diluted earnings per share 353,767,695 349,088,615
-------------------------------------------------------------------------- ----------------- -----------------
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
---------------------------------------------------------------------------------- ---------------- ----------------
Basic earnings attributable to equity holders of the Company 14,083 5,826
Adjusting Items (see Note 3) 1,857 9,820
Tax on Adjusting Items (312) (1,018)
---------------------------------------------------------------------------------- ---------------- ----------------
Adjusted earnings attributable to equity holders of the Company before Adjusting
Items 15,628 14,628
---------------------------------------------------------------------------------- ---------------- ----------------
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------------------------------------------------- ---------------- ----------------
Basic earnings per ordinary share (pence) 4.1 1.7
Diluted earnings per ordinary share (pence) 4.0 1.7
------------------------------------------------------------------- ---------------- ----------------
Basic earnings per ordinary share before Adjusting Items (pence) 4.6 4.3
Diluted earnings per ordinary share before Adjusting Items (pence) 4.4 4.2
------------------------------------------------------------------- ---------------- ----------------
7 Intangible assets
Technology
and
development Customer
Goodwill Trademark costs relationships Software Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------------- ---------- ----------- ------------ --------------- ---------- --------
Net Book Value at 1 May 2022 6,236 5,401 14,565 7,749 77 34,028
Additions - - 6,657 - 8 6,665
Additions from acquisition of subsidiary 135,489 7,686 1,177 33,831 - 178,183
Amortisation charge for the period - (709) (3,431) (2,348) (43) (6,531)
Foreign exchange 130 177 - 241 - 548
NBV at 31 October 2022 141,855 12,555 18,968 39,473 42 212,893
---------------------------------------- ---------- ----------- ------------ --------------- ---------- --------
Additions - - 6,092 - 192 6,284
Additions from acquisition of subsidiary 1,778 - - (1,698) - 80
Amortisation charge for the period - (785) (4,965) (3,327) (104) (9,181)
Foreign exchange 178 62 - 137 2 379
---------------------------------------- ---------- ----------- ------------ --------------- ---------- --------
NBV at 30 April 2023 143,811 11,832 20,095 34,585 132 210,455
---------------------------------------- ---------- ----------- ------------ --------------- ---------- --------
Additions - - 7,001 - - 7,001
Amortisation charge for the period - (816) (5,000) (3,328) (110) (9,254)
Foreign exchange (51) (69) - (61) (22) (203)
NBV 31 October 2023 143,760 10,947 22,096 31,196 - 207,999
---------------------------------------- ---------- ----------- ------------ --------------- ---------- --------
(a) Goodwill
Goodwill of GBP6,493,000 (31 October 2022: GBP6,366,000) relates
to the acquisition of Greetz in 2018, recognised within the Greetz
CGU.
Goodwill of GBP137,267,000 (31 October 2022: GBP135,489,000)
relates to the acquisition of the Experiences segment and is
allocated to the Experiences CGU. The movement relates to an
additional adjustment upon finalisation of the purchase price
allocation, which was completed in the second half of FY23.
The Group performed its annual impairment test at 30 April 2023;
the results of this, the sensitivity analysis and narrative
disclosure are set out on pages 163-164 of the Group's Annual
Report and Accounts for the year ended 30 April 2023.
No impairment to the carrying amount of Experiences goodwill was
recorded for the year ended 30 April 2023, reflecting the fact that
carrying amount was lower than the recoverable amount. However, in
view of the outcome of the sensitivity analysis performed, the
Directors did identify the compound annual revenue growth rate as a
matter of major source of estimation uncertainty.
For the period ended 31 October 2023, the Group has concluded
that there are no indicators of impairment over the carrying amount
of the goodwill allocated to the Experiences CGU. However, noting
that as at 30 April 2023 the calculation was sensitive to changes
in the compound annual revenue growth rate, the Group has included
the sensitivity analysis with respect to this assumption within
these Condensed Consolidated Interim Financial Statements. The
calculation performed as at 30 April 2023 concluded that the
headroom would decrease to GBP2.7m if there was a 15% decrease in
forecasted revenue.
The Group considers the recoverability of goodwill on an ongoing
basis and will continue to monitor the CGUs for any indicators of
impairment in subsequent reporting periods. This disclosure is
provided in accordance with IAS 34 'Interim Financial Reporting'
and should be read in conjunction with the Group's Annual Report
and Accounts for the year ending 30 April 2023.
(b ) Trademark
GBP4,259,000 (31 October 2022: GBP5,098,000) of the asset
balance are trademarks relating to the acquisition of Greetz with
finite lives. The remaining useful economic life at 31 October 2023
of the trademarks is 4 years 10 months (31 October 2022: 5 years 10
months).
GBP6,688,000 (31 October 2022: GBP7,457,000) of trademark assets
relate to the brands valued on the acquisition of the Experiences
segment. The remaining useful economic life at 31 October 2023 on
these trademarks is 8 years 9 months (31 October 2022: 9 years 9
months).
( c) Technology and development costs
Technology and development costs of GBP21,431,000 (31 October
2022: GBP17,909,000) relate to internally developed assets. The
costs of these assets include capitalised expenses of employees
working full time on software development projects and third-party
consulting firms.
Technology and development costs of GBP665,000 (31 October 2022:
GBP1,059,000) relate to the acquisition of the Experiences segment
and are allocated to the Experiences CGU. The remaining useful
economic life at 31 October 2023 is 1 year 9 months (31 October
2022: 2 years 9 months.)
(d) Customer relationships
GBP6,645,000 (31 October 2022: GBP7,484,000) of the asset
balance relates to the valuation of existing customer relationships
held by Greetz on acquisition. The remaining useful economic life
at 31 October 2023 on these customer relationships is 6 years 10
months (31 October 2022: 7 years 10 months).
GBP24,551,000 (31 October 2022: GBP31,989,000) of customer
relationship assets relates to those valued on the acquisition of
the Experiences segment. The remaining useful economic life at 31
Oct ober 2023 on these customer relationships ranges between 5
years 9 months and 2 years 9 months ( 31 October 2022 : 6 years 9
months and 11 months).
(e) Software
Software intangible assets include accounting and marketing
software purchased by the Group and software licence fees from
third-party suppliers.
8 Property, plant and equipment
Right-of- Right-of-
use Use
Fixtures assets assets
Freehold Plant and and Leasehold Computer plant and land and
property machinery fittings Improvements equipment machinery buildings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- ---------- ----------- ---------- -------------- ----------- ----------- ----------- --------
NBV at 1 May
2022 1,854 2,574 288 2,070 890 206 13,359 21,241
---------------- ---------- ----------- ---------- -------------- ----------- ----------- ----------- --------
Additions - 2,203 5 4,960 406 24 5,333 12,931
Acquired
additions - - 692 - 143 371 933 2,139
Disposals - - 6 (6) - - - -
Transfers - - (81) 205 (124) - - -
Depreciation
charge for the
period (78) (666) (147) (285) (294) (185) (1,602) (3,257)
Foreign exchange - 31 - 9 13 5 27 85
NBV at 31
October 2022 1,776 4,142 763 6,953 1,034 421 18,050 33,139
---------------- ---------- ----------- ---------- -------------- ----------- ----------- ----------- --------
Additions - - 263 1,719 181 941 219 3,323
Disposals - (57) - - (20) 15 (43) (105)
Transfers - (880) 880 - - - - -
Depreciation
charge for the
period (78) (313) (621) (523) (337) (206) (1,606) (3,684)
Impairment - - - - - - (428) (428)
Foreign exchange - 12 11 23 7 (3) 16 66
---------------- ---------- ----------- ---------- -------------- ----------- ----------- ----------- --------
NBV at 30 April
2023 1,698 2,904 1,296 8,172 865 1,168 16,208 32,311
---------------- ---------- ----------- ---------- -------------- ----------- ----------- ----------- --------
Additions - 219 10 222 87 - 275 813
Depreciation
charge for the
period (78) (571) (292) (548) (288) (220) (1,302) (3,299)
Foreign exchange - (2) (7) (16) (4) (2) (25) (56)
NBV at 31
October 2023 1,620 2,550 1,007 7,830 660 946 15,156 29,769
---------------- ---------- ----------- ---------- -------------- ----------- ----------- ----------- --------
9 Inventories
At At At
31 October 31 October 30 April
2023 2022 2023
GBP000 GBP000 GBP000
---------------------------------- ----------- ----------- ---------
Raw materials and consumables 1,882 2,434 2,128
Finished goods 10,509 12,318 13,425
---------------------------------- ----------- ----------- ---------
Total inventory 12,391 14,752 15,553
---------------------------------- ----------- ----------- ---------
Less: Provision for write-off of:
Raw materials and consumables (583) (10) (153)
Finished goods (2,860) (2,141) (3,067)
---------------------------------- ----------- ----------- ---------
Net inventory 8,948 12,601 12,333
---------------------------------- ----------- ----------- ---------
The cost of inventories recognised as an expense and included in
cost of sales during the period amounted to GBP20,060,000 (H1 FY23:
GBP21,595,000).
10 Trade and other receivables
At At At
31 October 31 October 30 April
2023 2022 2023
GBP000 GBP000 GBP000
-------------------------------------------------------------- ----------- ----------- ---------
Current:
Trade receivables 1,107 1,742 1,901
Less: provision for impairment of receivables (301) (408) (470)
-------------------------------------------------------------- ----------- ----------- ---------
Trade receivables - net 806 1,334 1,431
Other receivables 867 4,354 2,117
Other receivables with entities formerly under common control 181 150 151
Prepayments 4,330 4,235 2,632
-------------------------------------------------------------- ----------- ----------- ---------
Total current trade and other receivables 6,184 10,073 6,331
-------------------------------------------------------------- ----------- ----------- ---------
At At At
31 October 31 October 30 April
2023 2022 2023
GBP000 GBP000 GBP000
---------------------------------------------- ----------- ----------- ---------
Non-current other receivables
Other receivables 2,140 2,178 2,153
---------------------------------------------- ----------- ----------- ---------
Total non-current trade and other receivables 2,140 2,178 2,153
---------------------------------------------- ----------- ----------- ---------
Non-current other receivables relate to security deposits in
connection with leased property.
11 Trade and other payables
At At At
31 October 31 October 30 April
2023 2022 2023
GBP000 GBP000 GBP000
--------------------------------------- ----------- ----------- ---------
Current
Trade payables 14,369 23,150 26,726
Other payables 4,728 418 4,569
Other taxation and social security 9,134 6,325 6,756
Accruals 23,878 19,079 16,272
Merchant accrual 36,818 49,269 55,796
Total current trade and other payables 88,927 98,241 110,119
--------------------------------------- ----------- ----------- ---------
At At At
31 October 31 October 30 April
2023 2022 2023
GBP000 GBP000 GBP000
--------------------------------------------------------- ----------- ----------- ---------
Non-current
Other payables - 6,005 3,168
Other taxation and social security 368 688 1,052
Other payables to entities formerly under common control 638 638 638
--------------------------------------------------------- ----------- ----------- ---------
Total non-current trade and other payables 1,006 7,331 4,858
--------------------------------------------------------- ----------- ----------- ---------
12 Borrowings
At At At
31 October 31 October 30 April
2023 2022 2023
GBP000 GBP000 GBP000
--------------------------------------- ----------- ----------- ---------
Current
Lease liabilities 3,266 3,087 3,443
Borrowings 85 162 27
--------------------------------------- ----------- ----------- ---------
Non-current
Lease liabilities 14,691 16,735 16,082
Borrowings 171,332 229,751 170,493
--------------------------------------- ----------- ----------- ---------
Total borrowings and lease liabilities 189,374 249,735 190,045
--------------------------------------- ----------- ----------- ---------
The Group's sources of borrowing for liquidity purposes include
its facilities agreement, which was executed on 7 January 2021 and
amended on 22 June 2022. This facility comprises a Term Loan of
GBP175,000,000 and RCF of GBP80,000,000, provided by a syndicate of
banks. All facilities provided under this agreement are committed
until December 2025. Lease liabilities arising are also reported in
borrowings. As at 31 October 2023 the RCF is undrawn (31 October
2022: GBP60,000,000 drawn down).
Interest on all amounts drawn under the facilities agreement is
calculated at a floating reference rate, SONIA, plus a margin.
On 1 August 2022, the Group executed two interest rate
derivative agreements, comprising an interest rate swap at a rate
of 2.4725% with a floor strike rate of 0% on GBP90m notional until
1 December 2022 and GBP55m notional until 30 November 2023 and an
interest rate cap with a cap strike rate of 3.0000% on GBP70m
notional until 30 November 2024.
The Group's facilities agreement is subject to a Total Net Debt
to last twelve months' pro forma Adjusted EBITDA (stated pro forma
to include a full year's profit from acquired businesses) covenant
of 3.50x, tested semi-annually, with Total Net Debt and Adjusted
EBITDA as defined in the facilities agreement.
Borrowings are repayable as follows:
At At At
31 October 31 October 30 April
2023 2022 2023
GBP000 GBP000 GBP000
---------------------------- ----------- ----------- ---------
Within one year 85 162 27
Within one and two years - - -
Within two and three years 171,332 - 170,493
Within three and four years - 229,751 -
Within four and five years - - -
Beyond five years - - -
---------------------------- ----------- ----------- ---------
Total borrowings(1) 171,417 229,913 170,520
---------------------------- ----------- ----------- ---------
1 Total borrowings include GBP85,000 (H1 FY23: GBP162,000) in
respect of accrued unpaid interest and are shown net of capitalised
borrowing costs of GBP3,668,000 (H1 FY23: GBP5,249,000).
The table below details changes in liabilities arising from
financing activities, including both cash and non-cash changes.
Lease
Borrowings liabilities Total
GBP000 GBP000 GBP000
---------------------- ------------ ------------ --------
1 May 2022 170,163 15,320 185,483
---------------------- ------------ ------------ --------
Cash flow 55,121 (1,618) 53,503
Foreign exchange - 31 31
Interest and other(1) 4,629 6,089 10,718
---------------------- ------------ ------------ --------
31 October 2022 229,913 19,822 249,735
---------------------- ------------ ------------ --------
Cash flow (67,265) (1,886) (69,151)
Foreign exchange - 67 67
Interest and other(1) 7,872 1,522 9,394
---------------------- ------------ ------------ --------
30 April 2023 170,520 19,525 190,045
---------------------- ------------ ------------ --------
Cash flow (7,737) (2,211) (9,948)
Foreign exchange - (64) (64)
Interest and other(1) 8,634 707 9,341
---------------------- ------------ ------------ --------
31 October 2023 171,417 17,957 189,374
---------------------- ------------ ------------ --------
1 Interest and other within borrowings comprises amortisation of
capitalised borrowing costs and the interest expense in the period.
Interest and other within lease liabilities comprises interest on
leases as disclosed in Note 4, as well as the lease liability
addition in relation to the new Netherlands facility and office and
the lease liability acquired on acquisition of the Experiences
segment.
13 Share-based payments
Legacy schemes
Prior to Admission to the London Stock Exchange during the year
ended 30 April 2021, share and cash-based incentives were awarded
by the Former Parent Undertaking (as defined in the last Annual
Report and Accounts) in relation to legacy compensation agreements
for certain employees, senior management and Directors. Such shares
have been converted into separate shares in Moonpig Group plc and
other companies formerly under common control. These were accounted
for in accordance with IFRS 2 and disclosed in the Prospectus,
which can be found at www.moonpig.group/investors . The awards
included 3,075,329 shares in Moonpig Group plc that did not vest at
the date of Admission, and which vested on the 7 January 2023. In
respect of these shares there were non-cash charges of GBPnil in H1
FY24 (H1 FY23: GBP1,643,000). National Insurance is not included on
these schemes as they operated at an unrestricted tax market
value.
Pre-IPO awards
Awards were granted on 27 January 2021 and comprise two equal
tranches, with the vesting of both subject to the achievement of
revenue and Adjusted EBITDA performance conditions for the year
ended 30 April 2023 and for participants to remain employed by the
Company over the vesting period. The Group exceeded maximum
performance for both measures, including on an organic basis
without the post-acquisition revenue and profit from Experiences.
Accordingly, the first tranche vested on 30 April 2023 and was paid
in July 2023; the second tranche will vest on 30 April 2024 and be
payable shortly thereafter. Given the constituents of the scheme,
no attrition assumption has been applied. The scheme rules provide
that when a participant leaves employment, any outstanding award
may be reallocated to another employee (excluding the Executive
Directors), in accordance with which share awards were granted in
May, September, October and December 2022 and January, February and
April 2023, all of which will vest on 30 April 2024. Vesting may
arise sooner where a former employee is a "good leaver" and the
Remuneration Committee exercises discretion to permit vesting at
cessation of employment.
Number of
Pre-IPO awards shares
------------------------------------------- -----------
Outstanding at the beginning of the period 2,619,716
Granted -
Exercised (1,165,744)
Forfeited (7,143)
------------------------------------------- -----------
Outstanding at the end of the period 1,446,829
------------------------------------------- -----------
Exercisable at the end of the period -
------------------------------------------- -----------
Long-Term Incentive Plan ("LTIP")
Awards were granted on 1 February 2021 and will vest on 30 June
2024. Half of the share awards vesting is subject to a relative
Total Shareholder Return ("TSR") performance condition measured
against the constituents of the FTSE 250 Index (excluding
Investment Trusts). The other half of the share awards vesting is
subject to the achievement of an Adjusted Basic Pre-Tax EPS
performance condition (calculated as Adjusted Profit Before
Taxation, divided by the undiluted weighted average number of
ordinary shares outstanding during the year). Participants are also
required to remain employed by the Company over the vesting period,
with Executive Directors to 30 April 2026. Given the constituents
of the scheme, no attrition assumption has been applied. On 4 July
2023 and 19 September 2023 new awards were granted under the
existing scheme and will vest on 4 July and 19 September 2026
respectively. Consistent with the existing scheme, participants are
required to remain employed by the Company over the vesting period,
with the Executive Directors to 4 July 2028. Vesting may arise
sooner where a former employee is a "good leaver" and the
Remuneration Committee exercises discretion to permit vesting at
cessation of employment. The below tables give the assumptions
applied to the options granted in the period and the shares
outstanding:
September 2023 July 2023
-------------------------------------- -------------------------------------- --------------------------------------
Stochastic and Black-Scholes and Stochastic and Black-Scholes and
Valuation model Chaffe Chaffe
Weighted average share price (pence) 164.90 159.40
Exercise price (pence) 0 0
Expected dividend yield 0% 0%
Risk-free interest rate 4.47%/4.54% 5.13%/4.80%
Volatility 32.54%/33.25% 33.79%/33.21%
Expected term (years) 3.00/2.00 3.00/2.00
Weighted average fair value (pence) 137.25/164.90 129.70/159.40
Attrition 0% 0%
Weighted average remaining contractual
life (years) 3.90 3.70
-------------------------------------- -------------------------------------- --------------------------------------
Number of
LTIP awards shares
------------------------------------------- ---------
Outstanding at the beginning of the period 3,064,998
Granted 6,991,966
Exercised -
Forfeited (492,570)
------------------------------------------- ---------
Outstanding at the end of the period 9,564,394
------------------------------------------- ---------
Exercisable at the end of the period -
------------------------------------------- ---------
Deferred Share Bonus Plan ("DSBP")
The Group has bonus arrangements in place for Executive
Directors and certain key management personnel within the Group
whereby a proportion of the annual bonus is subject to deferral
over a period of three years with vesting subject to continued
service only. Vesting may arise sooner where a former employee is a
"good leaver" and the Remuneration Committee exercises discretion
to permit vesting at cessation of employment.
The outstanding number of shares at the end of the period is
419,492 ( 31 October 2022 : 392,289), with an expected vesting
profile as follows:
FY24 FY25 FY26 FY27 Total
Share options granted on 6 August 2021 1,853 88,744 - - 90,597
Share options granted on 5 July 2022 8,550 - 273,181 - 281,731
Share options granted on 4 July 2023 2,286 - - 44,878 47,164
--------------------------------------- ----- ------ ------- ------ -------
The below tables give the assumptions applied to the options
granted in the period and the shares outstanding:
July 2023
---------------------------------------------------- -------------
Valuation model Black-Scholes
Weighted average share price (pence) 159.40
Exercise price (pence) 0
Expected dividend yield 0%
Risk-free interest rate N/A
Volatility N/A
Expected term (years) 3.00
Weighted average fair value (pence) 159.40
Attrition 0%
Weighted average remaining contractual life (years) 3.50
---------------------------------------------------- -------------
Number of
DSBP shares
------------------------------------------- ---------
Outstanding at the beginning of the period 392,289
Granted 47,164
Exercised -
Forfeited (19,961)
------------------------------------------- ---------
Outstanding at the end of the period 419,492
------------------------------------------- ---------
Exercisable at the end of the period -
------------------------------------------- ---------
Save As You Earn ("SAYE")
The Group entered a SAYE scheme for all eligible employees under
which employees are granted an option to purchase ordinary shares
in the Company at an option price set at a 20% discount to the
average market price over the three days before the invitation
date, in three years' time, dependent on their entering into a
contract to make monthly contributions into a savings account over
the relevant period.
The FY22 awards were granted on 3 September 2021 and will vest
on 1 October 2024, with a six-month exercise period following
vesting. The awards are subject only to service conditions with the
requirement for the recipients of awards to remain in employment
with the Company over the vesting period. FY23 awards were granted
on 8 September 2022 and will vest on 1 October 2025, they are
subject to the same conditions as the FY22 grant. The FY24 awards
were granted on 28 July 2023 and will vest on 1 August 2026, they
are subject to the same conditions as the FY23 grant.
The below tables give the assumptions applied to the options
granted in the year and the shares outstanding:
July 2023
---------------------------------------------------- -------------
Valuation model Black-Scholes
Weighted average share price (pence) 176.40p
Exercise price (pence) 117.00p
Expected dividend yield 0%
Risk-free interest rate 3.93%
Volatility 32.54%
Expected term (years) 3.00
Weighted average fair value (pence) 67.09p
Attrition 15%
Weighted average remaining contractual life (years) 2.75
---------------------------------------------------- -------------
Number of
SAYE shares
------------------------------------------- ---------
Outstanding at the beginning of the period 783,819
Granted 842,522
Exercised -
Cancelled (461,453)
Forfeited -
------------------------------------------- ---------
Outstanding at the end of the period 1,164,888
------------------------------------------- ---------
Exercisable at the end of the period -
------------------------------------------- ---------
The fair value of awards under the Pre-IPO and DSBP awards are
equal to the share price on the date of award as there is no price
to be paid and employees are entitled to dividend equivalents. For
awards with a market condition, volatility is calculated over the
period commensurate with the remainder of the performance period
immediately prior to the date of grant. For all other conditions,
volatility is calculated over the period commensurate with the
expected term. As the Company had only recently listed, a proxy
volatility equal to the median volatility of the FTSE 250
(excluding Investment Trusts) over the respective periods has been
used. Consideration has also been made to the trend of volatility
to return to its mean, by disregarding extraordinary periods of
volatility.
Share-based payments expenses recognised in the income
statement:
Six months ended Six months ended Year ended
31 October 2023 31 October 2022 30 April 2023
GBP000 GBP000 GBP000
--------------------------------- ---------------- ---------------- --------------
Legacy schemes - 1,643 2,251
Pre-IPO awards 612 1,887 3,168
LTIP 1,517 833 1,876
SAYE 261 258 351
DSBP 186 160 273
--------------------------------- ---------------- ---------------- --------------
Share-based payments expense (1) 2,576 4,781 7,919
--------------------------------- ---------------- ---------------- --------------
1 The GBP2,576,000 (H1 FY23: GBP4,781,000) stated above is
presented inclusive of employer's national insurance, a net
GBP2,000 credit in the period. This is made up of contributions of
GBP321,000 (H1 FY23: GBP353,000) offset by a release of GBP323,000
in relation to the vesting of Tranche 1 of the pre-IPO awards.
14 Share capital and reserves
The Group considers its capital to comprise its ordinary share
capital, share premium, merger reserve, retained earnings,
share-based payments reserve, hedging reserve and foreign exchange
translation reserve. Quantitative detail is shown in the Condensed
Consolidated Statement of Changes in Equity. The Directors'
objective when managing capital is to safeguard the Group's ability
to continue as a going concern in order to provide returns for the
shareholders and benefits for other stakeholders.
Called-up share capital
Ordinary share capital represents the number of shares in issue
at their nominal value. Ordinary shares in the Company are issued,
allotted and fully paid up.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company. The shareholding as at 31 October
2023 is:
Number of shares GBP000
------------------------------------------------------------------- ---------------- ------
Allotted, called-up and fully paid ordinary shares of GBP0.10 each 343,277,365 34,328
------------------------------------------------------------------- ---------------- ------
As at 31 October 2023, ordinary share capital represents
343,277,365 ( 31 October 2022 : 342,111,621) ordinary shares with a
par value of GBP0.10 ( 31 October 2022 : GBP0.10). The movement in
share capital during the period relates to the issuance of shares
upon vesting of the Group's pre-IPO incentive scheme. 1,165,744
shares were issued at nominal value of GBP0.10, with the issuance
being paid up by the Group through distributable reserves,
specifically the share-based payment reserve.
Share premium
Share premium represents the amount over the par value which was
received by the Company upon the sale of the ordinary shares. Upon
the date of listing the par value of the shares was GBP0.10 but the
initial offering price was GBP3.50. Share premium is stated net of
direct costs of GBP736,000 ( 31 October 2022 : GBP736,000) relating
to the issue of the shares.
Merger reserve
The merger reserve arises from the Group reorganisation
accounted for under common control.
Other reserves
Other reserves represent the share-based payment reserve,
hedging reserve and the foreign currency translation reserve.
Share-based payment reserve
The share-based payment reserve is built up of charges in
relation to equity-settled share-based payment arrangements which
have been recognised within the Condensed Consolidated Income
Statement.
Hedging reserve
The hedging reserve comprises the effective portion of the
cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet
occurred and the cumulative net change in the fair value of time
value on the cash flow hedging instruments.
Foreign currency translation reserve
The foreign currency translation reserve represents the
accumulated exchange differences arising since the acquisition of
Greetz from the impact of the translation of subsidiaries with a
functional currency other than Sterling.
Foreign
Share-based currency
payment translation Hedging Total
reserve reserve reserve other reserves
GBP000 GBP000 GBP000 GBP000
------------------------------------------------------------ ------------- ------------ --------- ----------------
At 1 May 2022 34,941 (35) - 34,906
------------- ------------ --------- ----------------
Other comprehensive income:
------------------------------------------------------------ ------------- ------------ --------- ----------------
Foreign currency translation reserve reclassification - (735) - (735)
Cash flow hedges:
Fair value changes in the period - - 2,354 2,354
Cost of hedging reserve - - 225 225
Fair value movements on cash flow hedges transferred to
profit and loss - - (148) (148)
Exchange differences on translation of foreign operations - (179) - (179)
Share-based payment charge (excluding National Insurance) 4,428 - - 4,428
At 31 October 2022 39,369 (949) 2,431 40,851
------------------------------------------------------------ ------------- ------------ --------- ----------------
Other comprehensive income:
------------------------------------------------------------
Foreign currency translation reserve reclassification - - - -
Cash flow hedges:
Fair value changes in the period - - (463) (463)
Cost of hedging reserve - - (99) (99)
Fair value movements on cash flow hedges transferred to
profit and loss - - 12 12
Exchange differences on translation of foreign operations - 21 - 21
Share-based payment charge (excluding National Insurance) 2,842 - - 2,842
At 30 April 2023 42,211 (928) 1,881 43,164
------------------------------------------------------------ ------------- ------------ --------- ----------------
Other comprehensive income:
------------------------------------------------------------ ------------- ------------ --------- ----------------
Cash flow hedges:
Fair value changes in the period - - 491 491
Cost of hedging reserve - - 17 17
Fair value movements on cash flow hedges transferred to
profit and loss - - (1,285) (1,285)
Exchange differences on translation of foreign operations - 12 - 12
Share-based payment charge (excluding National Insurance) 2,578 - - 2,578
Deferred tax on share-based payments 105 - - 105
Share options exercised (4,081) - - (4,081)
At 31 October 2023 40,813 (916) 1,104 41,001
------------------------------------------------------------ ------------- ------------ --------- ----------------
15 Financial instruments and related disclosures
The amounts in the Condensed Consolidated Balance Sheet and
related notes that are accounted for as financial instruments and
their classification under IFRS 9, are as follows:
Note At At At
31 October 2023 31 October 2022 30 April 2023
GBP000 GBP000 GBP000
----------------------------------------- ---- ---------------- ---------------- --------------
Financial assets
Financial assets at amortised cost:
Trade and other receivables(1) 10 3,994 8,017 5,852
Cash 22,443 40,972 22,394
Financial assets measured at fair value
Financial derivatives(3) 1,798 3,253 2,468
28,235 52,242 30,714
----------------------------------------- ---- ---------------- ---------------- --------------
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables(2) 11 80,431 98,559 107,169
Lease liabilities 12 17,957 19,822 19,525
Borrowings 12 171,417 229,913 170,520
269,805 348,294 297,214
----------------------------------------- ---- ---------------- ---------------- --------------
1 Excluding prepayments.
2 Excluding other taxation and social security.
3 Financial derivatives include an interest rate cap and swap and a foreign exchange derivative.
The interest rate cap and swap derivatives measured at fair
value are valued using market data to construct a forward interest
rate curve which govern the future flows under the derivative.
These are then discounted back at the requisite discount curve.
On 3 May 2023 the Group executed a foreign currency forward
contract agreement on a notional amount of EUR10,000,000 for the
period until 30 April 2024. The Group does not apply hedge
accounting to this derivative, any gains or losses in relation to
the fair value of the derivative are recorded in the profit and
loss account.
Financial assets and liabilities held at amortised cost are
initially recognised at their fair value and then subsequently
measured at amortised costs using the effective interest method.
The effective interest rate is the rate that discounts the future
cash flows expected to be paid over the life of the liability or
received over the life of the asset. Any interest expense / income
arising on the unwind of the liability is recognised within finance
costs.
To the extent that financial instruments are not carried at fair
value in the Condensed Consolidated Balance Sheet, the carrying
values approximate the fair values at 31 October 2023, 30 April
2023 and 31 October 2022, except for borrowings where the fair
value of bank loans is GBP175,000,000 (FY23: GBP175,000,000; H1
FY23: GBP235,000,000). There have been no changes to
classifications in the current or prior period.
16 Commitments and contingencies
a) Commitments
The Group entered a financial commitment in respect of floristry
supplies of GBPnil ( 31 October 2022 : GBP91,000) and rental
commitments of GBP12,000 ( 31 October 2022 : GBP12,000) which are
due within one year.
b) Contingencies
Group companies have given a guarantee in respect of the
external bank borrowings of the Group which amounted to
GBP255,000,000 at 31 October 2023. This includes the Term Loan of
GBP175,000,000 and the RCF of GBP80,000,000 of which GBPnil was
drawn down at 31 October 2023 ( 31 October 2022 : GBP60,000,000
drawn down).
17 Related party transactions
Transactions with related parties
The Group has transacted with entities formerly under common
control which are presented below.
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
---------------------------------------------------------------------- ---------------- ----------------
Other income from other related parties formerly under common control 664 661
---------------------------------------------------------------------- ---------------- ----------------
At the balance sheet date, the Group had the following balances
with entities formerly under common control:
At At At
31 October 2023 31 October 2022 30 April 2023
GBP000 GBP000 GBP000
------------------------------------------------------------------ ---------------- ---------------- --------------
Trade and other receivables from other related parties formerly
under common control 181 150 150
Trade and other payables to other related parties formerly under
common control (638) (638) (638)
------------------------------------------------------------------ ---------------- ---------------- --------------
There is no expected credit loss provision recognised in
relation to the above receivables as the probability of default and
any corresponding expected credit loss are immaterial to the
Group.
18 Events after the balance sheet date
There were no adjusting or non-adjusting events after the
balance sheet date.
19 Alternative Performance Measures
Adjusted EBITDA
Adjusted EBITDA is a measure of the Group's operating
performance and debt servicing ability. It is calculated as
operating profit adding back depreciation and amortisation and
Adjusting Items (Note 3 of these Condensed Consolidated Interim
Financial Statements).
Depreciation and amortisation can fluctuate, is a non-cash
adjustment and is not linked to the ongoing trade of the Group.
Adjusting Items are excluded as management believe their nature
distorts trends in the Group's reported earnings. This is because
they are often one-off in nature or not related to underlying
trade.
A reconciliation of operating profit to Adjusted EBITDA is as
follows:
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------------ ---------------- ----------------
Operating profit 27,026 14,943
------------------------------ ---------------- ----------------
Depreciation and amortisation 12,553 9,788
Adjusting Items 1,857 9,820
------------------------------ ---------------- ----------------
Adjusted EBITDA 41,436 34,551
------------------------------ ---------------- ----------------
Adjusted EBIT
Adjusted EBIT is calculated as operating profit before Adjusting
Items as follows:
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
----------------- ---------------- ----------------
Operating profit 27,026 14,943
----------------- ---------------- ----------------
Adjusting items 1,857 9,820
----------------- ---------------- ----------------
Adjusted EBIT 28,883 24,763
----------------- ---------------- ----------------
Adjusted PBT
Adjusted PBT is the profit before taxation and before Adjusting
Items.
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
---------------- ---------------- ----------------
PBT 18,895 9,094
---------------- ---------------- ----------------
Adjusting Items 1,857 9,820
---------------- ---------------- ----------------
Adjusted PBT 20,752 18,914
---------------- ---------------- ----------------
Adjusted PAT
Adjusted PAT is the profit after tax, before Adjusting Items and
the tax impact of these adjustments. The adjusted PAT is used to
calculate the adjusted basic earnings per share in Note 6 of these
Condensed Consolidated Interim Financial Statements.
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
------------------------ ---------------- ----------------
PAT 14,083 5,826
------------------------ ---------------- ----------------
Adjusting Items 1,857 9,820
Tax impact of the above (312) (1,018)
------------------------ ---------------- ----------------
Adjusted PAT 15,628 14,628
------------------------ ---------------- ----------------
Net debt
Net debt is a measure used by the Group to reflect available
headroom compared to the Group's committed debt facilities. The
calculation is as follows:
At At At
31 October 2023 31 October 2022 30 April 2023
GBP000 GBP000 GBP000
-------------------------- ---------------- ---------------- --------------
Borrowings (171,417) (229,913) (170,520)
Cash and cash equivalents 22,443 40,972 22,394
Lease liabilities (17,957) (19,822) (19,524)
-------------------------- ---------------- ---------------- --------------
Net debt (166,931) (208,763) (167,650)
-------------------------- ---------------- ---------------- --------------
Ratio of net debt to Adjusted EBITDA
The ratio of Net Debt to Last Twelve Months' pro forma Adjusted
EBITDA helps management to measure its ability to service debt
obligations. The calculation is as follows:
At At At
31 October 2023 31 October 2022 30 April 2023
GBP000 GBP000 GBP000
----------------------------------------------------------------- ---------------- ---------------- --------------
Net debt (166,931) (208,763) (167,650)
Pro forma Adjusted EBITDA 91,083 85,142 85,127
----------------------------------------------------------------- ---------------- ---------------- --------------
Total Net debt to Last Twelve Months ' pro forma Adjusted EBITDA 1.83:1 2.45:1 1.97:1
----------------------------------------------------------------- ---------------- ---------------- --------------
Adjusted Operating Cash Conversion
Adjusted Operating Cash Conversion is operating cash flow
divided by Adjusted EBITDA, expressed as a ratio. The calculation
of Adjusted Operating Cash Conversion is as follows:
Six months ended Six months ended
31 October 2023 31 October 2022
GBP000 GBP000
-------------------------------------------------------------- ---------------- ----------------
Profit before taxation 18.9 9.1
Add back: Finance costs 8.1 5.8
Add back: Adjusting Items (excluding share-based payments) 1.2 6.3
Add back: Adjusting Items - Share-based payments 0.6 3.5
Add back: Depreciation and amortisation 12.6 9.8
-------------------------------------------------------------- ---------------- ----------------
Adjusted EBITDA 41.4 34.6
Less: Capital expenditure (fixed and intangible assets) (7.8) (14.2)
Adjust: Impact of share-based payments(1) 2.0 0.9
Add back: Decrease / (Increase) in inventories(2) 3.4 (1.1)
Add back: Decrease in trade and other receivables(2) 0.2 1.8
Add back: (Decrease) in trade and other payables(2) (24.1) (20.9)
Operating cash flow (3) 15.1 1.1
Adjusted Operating Cash Conversion 36% 3%
Add back: Capital expenditure 7.8 14.2
Add back: (Decrease) / increase in debtors and creditors with
undertakings formerly under common control - 0.3
-------------------------------------------------------------- ---------------- ----------------
Less: Adjusting items (excluding share-based payments) (1.2) (6.3)
Less: Research and development tax credit (0.4) (0.3)
-------------------------------------------------------------- ---------------- ----------------
Cash generated from underlying operating activities 21.3 9.0
-------------------------------------------------------------- ---------------- ----------------
Settlement of M&A related employee bonuses at Experiences (3) - (13.2)
-------------------------------------------------------------- ---------------- ----------------
Cash generated from / (used in) operating activities 21.3 (4.2)
-------------------------------------------------------------- ---------------- ----------------
1 Reflecting the non-cash share-based payment charge recognised
within Adjusted EBITDA, net of NI on the share-based payments
recognised below EBITDA.
2 Working capital movements for the six months ended 31 October
2022 have been adjusted for the opening balances arising upon
acquisition of Experiences.
3 Operating cash flow excludes settlement of legacy incentive
obligations in H1 FY23 associated with the acquisition, which were
fully provided for in the opening balance sheet.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board of Directors has collective overall responsibility for
the identification and management of the principal and emerging
risks to the Group. The Board has carried out a robust assessment
of such risks. This included an assessment of the likelihood of
each risk identified and of the potential impact of each risk after
considering mitigating actions being taken. Risk levels were
reviewed and modified where appropriate to reflect the Board's
current view of the relative significance of each risk.
The principal risks and uncertainties identified are detailed
below. Additional risks and uncertainties for the Group, including
those that are not currently known or are not considered material,
may individually or cumulatively also have a material effect on the
Group's business, results of operations and/or financial
condition.
The Board has approved amendments of the Group's assessment of
principal risks since the prior year. The risk in relation to
leadership retention has been removed following approval of the
2023 Remuneration Policy at AGM. The risk in relation to input cost
inflation has been removed as the Group has not seen significant
input cost inflation; the Group continues to monitor this closely.
Other risks have been amended as appropriate based on the output of
risk management assessment.
Risk Description Management and mitigation
1. Technology security and data As a digital platform business, the The Group has a disaster recovery and
protection Group requires its technology business continuity plan which is
infrastructure to operate. regularly reviewed
Downtime of the Group's systems and tested. The Group's platforms are
resulting from a technology security cloud-based, hosted by leading
breach would cause an technology firms.
interruption to trading.
The Group's technology security team
Either a technology security breach performs regular security testing of
or a failure to appropriately process the key platform
and control the and applications and reviews internal
data that the Group's customers share processes and capabilities. The Group
(whether because of internal failures subscribes to
or a malicious bug bounty schemes that reward
attack by a third party), could friendly hackers who uncover security
result in reputational damage, loss vulnerabilities.
of customers, loss of
revenue and financial losses from Quarterly health checks are performed
litigation or regulatory action. on critical security tools to ensure
they are configured
and operating appropriately.
The Group works closely with
suppliers to ensure that they only
receive and store minimum
data for the purposes required;
security audits are performed to
confirm suppliers operate
at a high standard to protect and
manage data.
Annual GDPR training is mandatory for
all employees.
Since acquisition, significant work
has been performed to bring
Experiences within the Group's
internal control framework, including
in respect of technology security and
data protection.
-------------------------------------- --------------------------------------
2. Consumer demand The economic downturn has resulted in The UK greeting card market has
a more challenging trading historically proven
environment in the last twelve recession-resilient, demonstrating
months. Any further consistent
deterioration in the economic growth through the 2008-2009 downturn
environment could impact demand and (Source: OC&C, June 2022).
Group revenue.
Our approach at Moonpig and Greetz is
Whilst the single greeting cards focused on acquiring loyal customer
market has been stable across a cohorts that drive
long-time horizon, it is recurring revenue, which provides
possible that physical greeting cards further resilience 91% of revenue at
could become less culturally relevant these brands in H1
in the UK and FY24 was generated from existing
the Netherlands. There is no evidence customers (H1 FY23: 90%).
of this currently, either for
consumers generally or Our business model is flexible, and
for individual age cohorts. we can respond rapidly to cyclical
economic changes, for
instance with respect to pricing,
merchandise range and cost base.
We continue to invest in the
development of digital gifting
solutions and would be able to
prioritise this work if we saw
indications of changing cultural
attitudes to card giving.
-------------------------------------- --------------------------------------
3. Strategy The Group's strategy is focused on The Group monitors return on
investment in technology and data to investment for all technology
drive growth across development. The product, data
each of our businesses. There is a and technology functions are managed
risk that this strategy does not on an agile basis, facilitating rapid
deliver growth in revenue redirection of
and profit to the extent expected. resource towards those projects that
most strongly contribute to revenue
Our strategy for Experiences is to growth. Should our
transform it from an ecommerce strategy not deliver growth in
marketing operation into revenue to the extent expected, there
a technology and data-led platform. is scope to flex investment
As with any business acquisition the accordingly.
delivery of plans
carries a higher level of execution The Experiences segment has been
risk compared to segments that have integrated into the Group's business
been operated by the review framework to
Group for some time. ensure regular challenge and
discussion of performance.
Development work to deliver revenue
synergies from the Experiences
acquisition is ongoing, Moonpig
offers a digital gifting experience
on the inside of a card.
-------------------------------------- --------------------------------------
4. Changes to the universal postal Moonpig and Greetz use regulated We maintain good relationships with
service monopoly postal services for the postal service providers and there is
final leg of delivery for regular, senior-level
greeting cards sent by envelope post. communication. We will engage fully
in regulatory consultations.
Demand for single greeting cards
could be impacted by changes to the Our strategy is to grow attached
frequency, reliability gifting, which moves orders from
or affordability of postal delivery. envelope post to parcel
courier delivery for which there are
The UK regulator with responsibility multiple providers.
for the universal postal service
(Ofcom) has announced At Experiences, a significant
its intention to consult on reducing proportion of orders are fulfilled
the universal service obligation from digitally rather than physically.
six to five days We are also innovating solutions for
of delivery per week. digital delivery at Moonpig and
Greetz.
Royal Mail is consulting on plans to
cease mail flights from Jersey and Cessation of mail flights from
the Isle of Man, with Guernsey would not impact our ability
a proposal that any future similar to fulfil Moonpig greeting
change in relation to Guernsey should card orders.
not require consultation.
-------------------------------------- --------------------------------------
5. Brand strength and reputation The Group's continued success depends There is high consumer awareness of
on the strength of its market-leading the Group's brands, which is
brands: Moonpig, maintained by ongoing investment
Greetz, Red Letter Days and Buyagift. in marketing. This is further
strengthened by network effects from
Any event that damages the Group's recipients receiving cards
reputation or brands could adversely and gifts.
impact its business,
results of operations, financial Significant ongoing investment in
condition or prospects. technology, with innovations such as
video and audio messages
in greeting cards, help to
differentiate our brand from its
online and offline competitors.
Investment in data protection and
technology security helps to protect
the Group from the
adverse impact of a data breach or
cyber-attack.
-------------------------------------- --------------------------------------
6. Disruption to operations Any disruption to in-house or We operate flexible fulfilment
third-party facilities within the technology with application
Group's production and fulfilment programming interface ("API") based
network could have an adverse effect data architecture which allows the
on trading. addition of third-party suppliers to
the production and
In the UK, there was service fulfilment network with relative
disruption at Royal Mail from August speed.
to December 2022 due to
industrial action. This could recur We continued to adopt a multi-site
in future periods. approach to ensure resilience for our
UK and Dutch operations.
The Group uses select third-party The Group's new in-house facilities
suppliers for certain solutions on at Almere and Tamworth operate
its platforms and any alongside our existing
disruptions, outages or delays in Guernsey site and continued use of
these would affect the availability outsourced partners. Flowers are
of, prevent or inhibit fulfilled by a single
the ability of customers to access or supplier in both the UK and the
complete purchases on its platforms. Netherlands, however there is partial
substitutability of
demand between flowers and other
gifting product categories.
The Group carries out due diligence
on all key suppliers at the onset of
a relationship. This
includes technology and data
protection due diligence and checks
on financial viability.
-------------------------------------- --------------------------------------
Independent review report to Moonpig Group plc
Report on the Condensed Consolidated Interim Financial
Statements
Our conclusion
We have reviewed Moonpig Group plc's Condensed Consolidated
Interim Financial Statements (the "interim financial statements")
in the Half Year Results of Moonpig Group plc for the 6 month
period ended 31 October 2023 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the Condensed Consolidated Balance Sheet as at 31 October 2023;
-- the Condensed Consolidated Income Statement and Condensed
Consolidated Statement of Comprehensive Income for the period then
ended;
-- the Condensed Consolidated Statement of Changes in Equity for the period then ended;
-- the Condensed Consolidated Cash Flow Statement for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Half Year
Results of Moonpig Group plc have been prepared in accordance with
UK adopted International Accounting Standard 34, 'Interim Financial
Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom ("ISRE (UK) 2410"). A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Half Year
Results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with ISRE (UK) 2410.
However, future events or conditions may cause the group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Half Year Results, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the Half
Year Results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Half Year Results, including
the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Half Year Results based on our review.
Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
4 December 2023
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END
IR ZZMGZRDLGFZM
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