Moonpig shares surge on £1.2 billion stock market debut

Online greetings card firm Moonpig has made a robust start to life as a listed company as shares surged in its £1.2 billion stock market debut.

The group confirmed the price of its initial public offering at 350p a share – the top end of its range – but the stock surged by more than a quarter as conditional dealings kicked off, with shares opening as high as 450p.

Unconditional trading will begin on February 5.

Moonpig placed £491.2 million of shares on the market – around 41% of the group – raising gross proceeds of £20 million.

The firm – backed by Exponent Private Equity Partners, which owns a 41.3% stake – first revealed it was considering an initial public offering (IPO) in early January as it looks to expand and capitalise on the surge in demand for online cards and gifts amid the coronavirus pandemic.

It comes amid a rush of IPOs as firms look to take advantage of stock market optimism over vaccines, with renowned footwear brand Dr Martens launching on the stock market last Friday with a £3.7 billion valuation.

Takeaway delivery firm Deliveroo is also targeting a potential stock market flotation later this year, having recently been valued at more than seven billion dollars (£5.1 billion) following a new funding round.

Moonpig is eyeing a place in London’s FTSE 250 Index with its IPO.

Nickyl Raithatha, chief executive of Moonpig Group, said: “Listing on the London Stock Exchange is an incredibly special milestone and will provide new opportunities for the business.

“As the leaders of a market undergoing an accelerating shift to online, now is the perfect time for us to bring the company to the public market and we are excited about Moonpig’s prospects for the future.”

Moonpig chairwoman and former WH Smith boss Kate Swann is helping oversee the listing as the company seeks to tap further into a cards and gifts market which is worth £24 billion across the UK, Netherlands and Ireland, and is rapidly switching online.

The firm said only around 10% of card purchases were made online in 2019, which is forecast to double to 20% by 2021.

Moonpig already has 12.2 million customers and sends 46 million cards a year but is trying to position itself as a technology business, using customer data and predictive technology.

Bosses hope harvesting customer data will help remind them of birthdays and cash in on additional gifts.

The firm recently said the sale of gifts alongside cards – such as flowers, wine and chocolates – is also “critical” to the group and is now almost half of the business.

But its IPO comes as high street rivals have suffered.

Card Factory is in crunch talks with lenders after breaking banking covenants when trading was hammered by the pandemic, and Paperchase brought in administrators last month before a rescue deal was secured.

Moonpig by comparison has benefited from the lockdown, with families and friends turning to gifts and cards to help get through long periods without contact.

The group has a 60% share of the online cards market in the UK and a 65% share in the Netherlands, where it trades as Greetz.

It made underlying earnings of £44.4 million in the year to April 30 on sales of £173.1 million, up 44% year on year.

The group, which launched 20 years ago, has a team of more than 400 staff across the UK and Netherlands, with an office in London, a technology hub in Manchester and factory in Guernsey.