Personalised card retailer Moonpig yesterday warned sales will be lower than expected this year as cash-strapped shoppers shifted to lower-priced gifts.

It also said that Royal Mail postal strikes had hit its business.

Moonpig shares took a heavy fall on the news.

The Guardian states that the British firm said trading conditions had become progressively more challenging in October and November because of "macroeconomic uncertainty" and the run of industrial action by postal workers.

Moonpig, which trades as Greetz in the Netherlands, expects revenue for the year to April 30 to be about £320million, down from its previous forecast of £350million as it said it expected the autumn decline in gift sales to last beyond Christmas and into the spring.

Nickyl Raithatha, the chief executive, said: "We don't have a crystal ball on the macroeconomic climate, but we are expecting a similar trajectory from November (to April)."

Profits drop

Pre-tax profits more than halved to £9.1million for the six months to the end of October and revenue declined 8.1% year-on-year. That reflected a 13.3% drop in total orders - partly caused by the strike by postal workers and partly because it was compared with the previous year's highs fuelled by Covid restrictions.

Moonpig's share price closed last night down nearly 9%.

Sophie Lund-Yates, an analyst at Hargreaves Lansdown, said: "If you can't guarantee your card will make it in time, there's little motivation to pay the premium charged by online card-sellers.

"A natural solution would be to seek another distribution partner, but this is a big step. Swapping providers increases operational risk and would be a long, protracted process at the best of times.

"The other disappointing development is that customers are reducing the amount they spend on gifts. These lucrative add-ons are an important pillar for margin growth, but the sad truth is that while the cost-of-living crisis cruises on, people are simply not inclined to throw chocolates and flowers into their virtual baskets."

FTSE 100

The UK's top share index, the FTSE 100, was up eight points at 7,497 shortly after opening this morning, following yesterday's 32-point loss.

Brent crude futures picked up slightly from their recent steep falls to be up 1.3% at $78.17 a barrel. The last time they were this low was at the end of 2021.

Companies reporting today

  • Half-year results: DS Smith, Frasers Group
  • Trading updates: British American Tobacco, Balfour Beatty

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