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Valentine's Day greetings help Moonpig cards fly

·2-min read
Moonpig and THG (The Hut Group) logos are seen on laptop in front of displayed stock graph in this illustration taken

(Reuters) - Moonpig forecast a near doubling of its annual revenue on Thursday, after demand for the online retailer's greetings cards took off during coronavirus lockdowns, driving its shares up as much as 9%.

The retailer, which only sells cards and gifts online, expects demand to moderate when restrictions ease allowing people to shop physically.

Moonpig, which has seen its sales soar during the pandemic like many online retailers, said it recorded its best-ever trading week ahead of Valentine's Day this year.

Shares of the London-listed company, which have surged since its 350 pence per share listing on Feb. 2, climbed about 9% to 472.40 pence in early trade.

Last month, Moonpig's rival Card Factory reported a more than two-fold surge in online sales for the 11 months to December although it has warned of an annual loss as the pandemic battered sales at its 1,000-odd stores across the United Kingdom and Ireland.

"Purchase frequency remains unusually elevated due to COVID-19 related restrictions, and we are now also seeing a temporary increase in average order values, as more customers attach gifts to their orders," Moonpig said.

The retailer, which operates as Greetz in the Netherlands, said it has increased marketing activity to attract more customers and has incurred incremental costs due to higher temporary staffing levels throughout its supply chain.

Founded by Nick Jenkins 20 years ago, Moonpig's online retail space carries colourful cards, with captions like "Pandemic or not, you can lock me down forever" to attract customers during the lockdowns.

Moonpig, whose initial public offer was the second largest UK listing this year, said it expects revenue for the year ending April 30, 2021 to almost double from the 173 million pounds it posted for the previous year and the underlying core profit margin to be in line with the year-ago figures.

($1 = 0.7217 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Vinay Dwivedi and Emelia Sithole-Matarise)