Good day, ladies and gentlemen, and welcome to the Moonpig Group FY 2025 full year results Q&A session. Currently, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. If you wish to ask a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. Participants can also submit questions through the webcast page using the ask a question button. I would like to remind all participants that this call is being recorded. I will now hand over to Nickyl Raithatha, CEO, for his opening remarks.
Good morning, all, and thank you for joining. Moonpig Group has delivered another strong set of results in FY 2025, which just reflects the resilience of our model and the consistent execution of our strategy. The Moonpig brand itself delivered nearly 9% growth, which we think is a standout result in what has been a challenging consumer environment. Growth was driven by continued customer acquisition and a return to healthy momentum and gift attach. Group EBITDA margins came in at 27.6%, above the top end of our guidance, and adjusted EPS increased by 18% ahead of expectations. We're generating significant free cash flow. Leverage is now at our target levels, and we have introduced shareholder distributions, buyback, and dividend in the second half of the year, and we have continued that with a GBP 60 million buyback program this year.
That just reflects our confidence in the underlying earnings power of this business and the capital efficiency of our model. Our investment in technology and data continues to deliver tangible benefits. Moonpig Plus subscriptions grew 84% year on year, approaching 1 million subscribers, and now driving over 20% of our business. Occasion reminders space surpassed 100 million entries now, driving over 40% of our business. Gift attach rate accelerated to 70 basis points growth in the second half. These levers continue to drive increased frequency and customer lifetime value across our 12 million users. Looking at year-to-date trading, we've had a really strong start to the year. The Moonpig brand has returned to double-digit revenue growth. Greetz is now back to flat year on year, and Experiences is gaining operational momentum as we move into the final phase of our transition plan.
We've also seen good progress internationally, with continued healthy growth in Ireland, Australia, and the U.S. For the full year, we expect to grow EBITDA in the mid-single digit range and deliver EPS growth in the range of 8%-12%. As you'll also have seen this morning, I have decided to step down as CEO. After seven incredibly rewarding years, this is the right moment for me personally. I've loved leading this business, and I'm extremely proud of what we've built. The decision forms part of a longer-term planned succession process. The search for my successor is now underway, and I'll continue to work closely with the board on this. I've made this decision because the business is in such a strong position, and it gives me full confidence that this is the right time to hand over.
We're delivering consistent growth, strong margins, and cash generation, and that's enabled us to start returning capital to shareholders whilst continuing to invest for the long term. We've got strong momentum, and the medium-term opportunity remains significant. Our strategy is clear, the leadership team is exceptional, and the platform is well set for the next phase. I'm fully committed to leading the business over the next 12 months, continuing to deliver on our strategic priorities, and ensuring a smooth and effective transition to my successor. Thank you for listening, and I look forward to all of your questions.
Thank you. If you wish to ask a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. As a reminder, participants can also submit questions through the webcast page using the ask a question button. Our first question comes from Ross Broadfoot from RBC Capital. Please unmute your line.
Morning, gents. Can you hear me?
Yeah, hi, Ross.
Good, thank you.
Yeah, so three for me, please. Just firstly, on the strong customer growth, can you give any color on what's working particularly well and resonating with those customers and the degree to which you think that growth is sustainable at this kind of level? The second, how should we think about the order frequency from here? Obviously, some impact from that strong customer growth on frequency, but just thinking about that in the context of the higher frequencies from the growing Plus customer base. Number three, just on Greetz, as you mentioned, an improving trajectory, but still a bit more to do. Realize there are a number of things you're working on here, but what would you flag as the most important? Thanks very much.
Great questions. Thanks, Ross. I think on the first, I think one of the things we've done on the customer growth, there are two things. I think one is just the general brand positioning around having the world's most personalized card, I think, is really starting to sort of play through. As we sort of continue to innovate, we continue to resonate with customers. What we're seeing from customers, they understand just how different we are versus buying a regular card from the offline market. That is kind of pulling more customers online. I think in parallel with that, we've made some specific improvements to make the new customer journey easier. Last June, so it's been a year ago, we introduced social login for the first time.
You can kind of, to create an account, you can just log in with your Google or Apple credentials. It is e-commerce best practice, but we launched it then, and we saw a pretty significant step up in conversion rate at that step from customers that previously may have not wanted to create an account. We have kind of done a similar thing, actually, with kind of an ability to log back in. Kind of introducing something kind of halfway through the year called Magic Link. If you have forgotten your password, you do not need to reset it. You just kind of click on it, and from your email, you can log directly back into your account. That obviously helps massively with retention as well. Bringing customers back who may not have used the business for a while and forgotten their password.
There's been a few technical changes alongside the sort of continued brand investment, and those have just driven that continued customer growth in what is not an easy environment to acquire customers, certainly on a sort of performance marketing basis. We've been very happy with the growth there. On frequency, I think the underlying strength of our cohorts is very compelling. I think we gave some detail on this a few months ago at the Capital Markets Day. What we see is that the frequency of customers on a like-for-like basis continues to improve. That's really a direct driver of Plus customers instantly increasing their frequency. Customers that are setting reminders increase their frequency. Customers that download our app increase their frequency.
More and more now, we are seeing customers that interact with our creative features, that use our AI Stickers, that use our AI Handwriting, that use our Video Messages for that service, their frequency increases as well. We measure that by kind of how many of them come back in 30 days, 60 days, 90 days. I think what you see this year is kind of there is a sort of big mix effect, kind of holding that back with kind of a big cohort of new customers that kind of pulls down the average. If we look at kind of each cohort one by one, we are seeing kind of that continuous progression in frequency as we kind of execute on our strategy. That gives us confidence.
If you think about our medium-term guidance, we've kind of shown how much frequency should contribute to sort of growth each year. That's kind of where we remain. The last one on Greetz. Yeah, I think it's been really encouraging to sort of see the progress in Greetz and kind of great to be sort of back on sort of flat year on year in the last kind of couple of months. We're hoping that kind of is a platform on which we continue to build. I think one of the biggest unlocks here, maybe the starting point here is Greetz, the Dutch market is a much tougher consumer environment and macro environment than the U.K. even. We're kind of facing into sort of some market headwinds there. Greetz is outperforming.
I think certainly this year, we can see Greetz is outperforming the market pretty significantly. I think one of the big unlocks for us is really around getting the group tech platform to work for Greetz. It has been some time, it has been a couple of years since we migrated the Greetz business onto the new platform. I think we did think that probably the benefits of the platform, which I think Moonpig demonstrates are pretty compelling. We thought those would reach Greetz a little bit sooner than they have. We have spoken in the past about why this has taken longer. I think partly it is because there was some sort of customer reaction to the features changing, the user experience changing and getting used to that.
One of the bigger things we learned was actually the data models, which is ultimately what our platform is. It's about kind of intelligent algorithms driving the process. They took a lot longer to learn on what is a smaller data set. Actually, just kind of using the learnings from the Moonpig kind of data set did not really have that much value in the Netherlands because the customers behaved slightly differently. We kind of had to build that from scratch. Those data models are sort of gathering momentum as they kind of learn more and more each day. In parallel, we actually kind of realized that some of the data architecture was not harmonized in the same way.
The card tagging, for example, if you take an average card, was tagged manually by a designer, and they may have tagged a card that this is for women, for ladies, for mum, for girls, but they may not have tagged it for aunts or grandmas or whatever. There was just a kind of inconsistency in tagging that meant when you were searching for a card, the algorithms could not quite work out exactly how to understand the card. What we have introduced now is we have introduced AI Tagging. An AI tool basically scans the front of the card and decides who that card might be for and what that might be about, whether it is a funny card or not. That means we have got consistent tagging across all 40,000 cards on the site. That basically is a really big unlock.
When you think about AI kind of intelligence models, it's kind of you need to put high-quality data in to get high-quality outputs. Now we're kind of at that place. I think there's that. The third thing is we've built a configuration layer for the first time at Greetz. We've realized there are just going to be some areas and some parts of the experience where the Dutch consumer just is different to the U.K. consumer. We saw this pretty starkly. We released a sort of delivery selector tool to customers in the U.K. and the Netherlands on the same day, kind of a couple of months ago, which basically kind of puts up your options where you choose the date you want it delivered.
We basically say, "Here are your postage options." We say, "Look, if you want it fastest, this is your option. If you're not worried about time, this is your option." We kind of prioritize speed. What we saw was in the U.K., consumers massively kind of gravitated towards it. We saw a big surge in customers opting for that kind of best-in-class delivery. What we saw in Greetz was actually kind of NPS dropped because customers felt we were pushing them a more expensive service. What we built is a configuration layer. Now Dutch customers see the most cost-efficient product first, so kind of a stamp price, and then the fastest delivered second. Actually, just something as simple as that just massively changed the NPS and therefore the lifetime value and retention of customers.
We're kind of, I think the biggest unlock for Greetz is getting the platform to work. We've done a huge amount, we've made a huge amount of progress now. We've got all of the data architecture aligned. We've got all of the systems aligned. I think we should really see that start to come through now in the foreseeable future.
Brilliant. Thanks, Nickyl.
Our next question comes from Andrew Wade of Jefferies. Please unmute your line.
Morning, team.
Hi there.
Hi there. A couple from me. First one, just talking through the softer H2 trend, specifically in the Moonpig brand. Could you give any sort of detail on where that's been? Has it been in the new customer acquisition side, the frequency, how prices work through trading down, just what detail, if any, you can give us behind that? What levers you pulled to reaccelerate that? Obviously we've seen an acceleration in the start of FY2026. That's the first one. Do you want me to fire them off or do you want to do them in turn?
In turn is probably better.
Cool. Okay.
Let's do that. Yeah. I think we did see a step down in the sort of consumer kind of confidence in the second half compared to the first half of the year. That probably was post-Christmas, was probably when we really started to see it. I think firstly, it kind of talks to the resilience of the Moonpig model that actually that kind of was only a kind of couple of points of growth. We did see that. It kind of is across the board. We see it kind of, we see it kind of partially through customer acquisition and then partially kind of in the upsell piece as well. Whether that's customers kind of upgrading to a large card or those all kind of buying a larger bouquet of flowers, I think that's kind of where we see some of the pressure.
I think on frequency, there's a bit of a, it's a very, very small couple of basis points, but still, we see some kind of drag on frequency through that period. What we can say is we can see pretty clearly that actually in that second half, we continue to significantly outperform the market, which is obviously good. As you said, we kind of, we put in place a series of initiatives to sort of get back to the growth levels we want. In the sort of towards the end of the year and kind of what we're seeing play out now in the new year is there was kind of a bunch of initiatives that we launched, I think. Probably the main one was around our delivery service.
One of the UX changes I talked about, but we've really been pushing this kind of Moonpig exclusive guaranteed delivery service. It's kind of unique to the market. No one else is offering it. Certainly at this price with this guarantee. Customers are really starting to associate us with that offering and come to us for it. We've seen a huge growth from almost a starting point of zero 18 months ago to now more than a third of customers paying for tracked guaranteed delivery on a card. That obviously has a revenue implication. Also, I think gift attach is something we've been really kind of excited about. I think we know it's been a tough couple of years for gift attach and kind of running to standstill, whereas actually now it feels we're starting to run on that.
Even in a tougher environment in the second half, we accelerated gift attach. That has continued in the new year. That is kind of driven by two things. It is the quality of brands we are bringing on board. We have brought on board Next and The Fragrance Shop and stuff, which we are seeing really strong growth from. The algorithms are just really starting to kick in. All of those AI initiatives we spoke about previously, our ability to understand the message in the card and use that to recommend the gift, that is driving a lot more relevance in our recommendation engine. Gifting has really picked up as well.
Great. Thanks. Very clear. The second one, we sort of had revenue come in towards the bottom of the guided range, but profit dropped through, whether you look at EBITDA or PBT, was stronger. Any sort of particular, anything you can point to in terms of why that second half profit extraction was so strong? Was there any one-off element in there or it's just sort of just traded?
Oh, I'll hand over to Greetz.
Yeah. Hi, Andy. I think certainly at the operating profit level, the key driver there is the performance of gross profit at the Moonpig brand. I think now across a number of hours, we've seen sort of strong, consistent performance in terms of gross profit margin progression. That's down to the buying teams have really got the wind in their sails in terms of supply management and intake margin management. We've got a program of operational improvements at our U.K. facility, including during the year in phases, we've insourced the fulfillment of balloons. That's had a margin benefit. I suppose the good news about both of those things is they're things that are enduring. They will sort of carry forward into future periods.
We talked a bit at the half year about the fact that we are growing our sales through sources of revenue, which are 100% margin. Obviously, to the extent that we have moved our toy range across to an agency commission basis with The Entertainer and we are growing those sales and we are growing sales of gift experiences, that is the 100% margin and that is positive for gross profit margin. All of that is stuff that is enduring. I think looking forward, you can expect that the gross margin percentage will be a little bit lower year on year. That is effectively implicit in our sort of guidance for EBITDA margin growth because there are some costs coming through. Obviously, there has been an increase in national minimum wage and national insurance.
Whilst we're relatively unexposed compared to most B2C businesses, there is a little bit of cost that we'll need to absorb in gross profit. To the extent that we're seeing really good traction in terms of both growth and gift attach rate and tracked delivery penetration, those are great revenue drivers and absolutely strategically right. Obviously, they're lower than average gross margin rates. There will be a mixed impact as we move into FY2026.
Great. Very clear. Final one. Nickyl, sorry to hear you're deciding to move on, but good luck with whatever you do next. Obviously, we've got a year of you left, potentially. I'm interested as to what you would do differently if Moonpig was private. Maybe now is a good time to reflect on that, if there is indeed anything you would do different.
Yeah. I mean, great question, Andy. I mean, I think the main answer is probably not that much, right? I think we've got a great board that kind of works with us closely to sort of work out how do we create as much kind of long-term value as possible. We kind of work together to execute on that. I think there's probably, if I'm pushed, I think there's probably a little bit more permission in private markets to sort of take more risky bets. I think could we have considered a slightly different capital approach to international expansion, potentially? I think there's actually something really powerful about the sort of capital discipline that I think being public gives and the way that we are bootstrapping our way to hopefully creating some pretty exciting new market businesses, actually on balance is probably a better way to go.
Yeah, probably no major things I'd say there.
No, that's interesting. Thanks very much, guys. Appreciate your time.
Thanks, Andy.
Our next question comes from Fiyin Durajay of JP Morgan. Please unmute your line.
Hello, good morning all. Just wanted to follow up on the gift attach rate and more specifically the stronger gift attach rate increase in H2. I am just wondering how much of that is due to the business being better at sort of nailing seasonal events versus fundamental factors at play driving this growth. To follow on from that, also wondering where your gift attach rate ambitions now lie versus the current high-teen levels that we see in the year.
Thanks. Yeah, great question. I think the attach rate, it's not a peak phenomenon. I think it's kind of an all-year-round phenomenon. If you think about our attach rate on any given day, it probably mirrors the sort of average increase that we saw. The 70 basis points was probably pretty consistent through certainly the half and kind of naturally kind of accelerated through the half. Yeah, I think what we see is that when we add a new brand or kind of really step up a new category, or when we introduce a new algorithm that kind of just step changes relevance, we can kind of pretty clearly measure the impact that's having on sort of global attach rate and that kind of just keeps ticking up.
We saw a big kind of step change last year when we introduced The Entertainer doing all of our kids and baby range. We saw a big step up within the attach rate for kids and baby cards, of course. I think The Fragrance Shop and Next and Beauty were kind of two of the other bigger ones. A lot more beauty brands, there are a lot more smaller brands launching as well. We have a really exciting pipeline coming in the next few months as well of more of those. We are also trying new things.
We actually did our first sort of, for the first time, actually with Virgin Wines that manages that category for us, we did sort of some paid marketing on social, which they kind of did the marketing contribution and we kind of co-branded some marketing on paid social for that sort of to boost Virgin Wines at Moonpig. That was incredibly successful. We saw really strong growth while we were doing that on wine sales on our business. That kind of unlocks for us a new way of pushing it. We are continuing to sort of deliver better products to the customer and put them in front of the customer. That is driving attach every day.
In terms of where it goes in the long term, if you think about our medium-term guidance, we think that the average order value should sort of grow at 4%-6% a year. The primary driver of that is attach rate. When we think about kind of what that means, it means kind of we see attach rate on a kind of normal basis growing 1 % point plus a year. We see kind of no end to that runway. We know that 60% of all cards in the U.K. are given with a gift, we're at 17% or 18% today. I think our kind of sort of internal near-term focus is how do we get that to 30%. We see there's probably a 10-year runway here without really even eating into that much of the opportunity.
Kind of no end in sight. We've got a whole bunch of ways to do that, including digital gifting, digital gift cards, and yeah, just working with more kind of brand partners and brand heroes.
Perfect. Thank you so much.
Our next question comes from Adam Tomlinson of Berenberg. Please unmute your line.
Hello. Can you hear me?
Hi, Adam. Good morning.
Hi. Thanks, guys. Thanks for taking my questions. A lot of them have actually been asked, but I suppose first one for Andy, just on free cash flow, obviously stand out in today's results. If you could maybe just talk through that slight step up you've seen there. Looking forward, what we should expect, are there any big investments, I guess, coming that could depress that free cash flow level? Just a bit of commentary around that would be helpful, please. That's the first question. I suppose the second one to Nickyl, inevitably, the shares reacting today to the news of you stepping down.
I suppose what might be helpful is just to get a recap on why there is not a need for investors to worry here, why the group is so well set looking forward, and perhaps with reference to some of the operational team that you have in place. I know we met those at the Capital Markets Day, but just a reminder of that might be quite helpful.
Yeah, sure. I'll take the first question. Hi, Adam. Yeah, you're right. I mean, one of the features of the results is sort of continued strong free cash flow. So GBP 61 million last year and GBP 66 million this year. And effectively, that's inherent in the Moonpig operating model, where relatively high profitability, low capital requirement, and a negative working capital cycle. I would certainly expect that strong cash generation to be a consistent feature in future periods, and indeed to continue growing as we continue to grow our adjusted EBITDA. Looking forwards in the year ahead, you will see that it will continue to be weighted into the second half of the year.
What you'll probably see is a slight increase in net leverage in H1 of FY2026, but coming back down to the net leverage target of around one time by the end of the financial year. Probably the one thing to call out is probably slightly lower capital expenditure in the year just gone. We were at 3.8% of revenue, and our medium-term guidance is for 4%-5% as a range. Part of that is just the mix of projects in the financial year. We had some projects such as a new warehouse management system, migration of Greetz onto the Stripe payment platform, which were SaaS configuration, and you're required to expense those rather than capitalize them. That's not a cash flow impact. It's a shift between P&L and CapEx, but also within the overall CapEx envelope in the next financial year.
Actually, probably in FY2027, we'll see a higher rate of tangible CapEx investment. We've previously talked about GBP 2 million a year. In our results today, we talk about an expectation of mid-single digits, so maybe GBP 4 million-GBP 5 million. That just reflects the opportunities that we have to leverage our insource fulfillment to drive further improvements. In particular, in this year, we're looking at bringing the fabrication of giant cards, our largest card size, in-house. It's currently done by a third-party fulfillment partner, but we're going to bring that into our main operations. There's an investment in parcel sortation that we're looking to do. That's not about margin. That's actually about being able to broaden the delivery offering for our customers.
To the extent that you can sort parcels into different buckets, it's an enabler for being able to, for instance, do Track 48 as well as Track 24. Overall, expectation of continued and growing free cash flow generation, a little bit more capital expenditure compared to a relatively low base in this financial year.
Sure. Okay. Very helpful. Thanks.
Yeah. On your second point, I think from my side, I've kind of hit that seven-year mark actually just last week. As I've been thinking about this and just making what is a kind of a personal decision about just my career and just thinking that I'm kind of ready to explore what the next chapter might be, I think one thing that was really important to me was to sort of, I guess in the words that I use, it was to leave Moonpig on a high.
I feel like I'm kind of actually able to do that with confidence now because what we've got is a business where we've got great momentum in the business with Moonpig having had, I think, a very good year and currently at that double-digit growth range with operating leverage coming through. Greetz, I think we've unlocked now what we needed to unlock. On a trajectory path where it's flat now, and hopefully that continues to build. Experiences, clearly still some work to do, but we're in the final phase of our transformation plan. The operating momentum is accelerating, and I think pretty confident about what that business will do in the years. I feel like actually it's a platform where we've got strong momentum.
We've rebuilt the technology platforms across the group. We've got an extraordinary leadership team. I think my bench is very strong. Andy, obviously, you'll know and love, but I think just beyond that, whether we look across tech, across marketing, across operations, the general managers running each of the brands, I think we've got an exceptional team of capable, competent, stable, and entrepreneurial leaders that I think will continue to drive great value for the business.
From my perspective, I think I'm kind of able to sort of step away at some point in the next 12 months, but knowing that my successor will come into sort of what is a growing cash-generative platform, and will be able to build on top of that and hopefully take this business to the next level and deliver on our medium-term ambitions, which I think I'm still very, very confident about.
Great. That's really helpful. Thank you very much.
Our next question comes from Alison Lygo of Deutsche Numis. Please unmute your line.
Morning, guys. Can you hear me?
Hi, Alison. Good morning.
Yes. Good. Thank you for taking my questions, please. First one, could you talk a bit about advertising revenue that you're generating? Interested in terms of how that sort of trended through the year and what you're sort of expecting and working on for the year ahead. The second one, just interested in terms of the consumer behavior you're seeing around delivery options. Obviously, the gap between kind of a first-class price stamp and the tracked option you're offering is not huge now. Interested in terms of what you're seeing in terms of the consumer behavior between picking between those two and how that's maybe trending. The final one I had was just anything to highlight in terms of the development of that gifting range.
Thinking both in terms of new categories that you're feeling like you might want to expand into, but also how you're thinking about categories and kind of premiumizing within it. Thank you.
Great. Yeah. I mean, Andy, do you want to maybe take the ad revenue one and I'll take the other second two?
Yeah, absolutely. I mean, we do earn small amounts of revenue from suppliers and through supply marketing income and some sources of advertising income, like effectively sort of sponsoring on email CRM. It is a relatively small part of our business at the moment. The way I would think about that is as being sort of a constituent and a contributor to the sort of the gross margin progression and part of our management of supply relationships as opposed to a sort of large and distinct revenue stream. We are not, and I would not see us as being same as some other platforms where sort of display advertising across the website real estate is a significant revenue driver. It is a small but helpful and growing part of our business.
Yeah. I think on delivery, what's clear is as we've introduced this guaranteed delivery service, which is, again, it's unique to the market. One, it's a Royal Mail Track 24 service, but we're pricing it significantly below anywhere else, and we're adding the sort of the Moonpig guarantee where we will credit your account if it's not delivered the next day. That really is resonating with customers. We've seen that pretty much double this year as we've made that more prominent and customers have learned about that product. We're seeing it drive important customer satisfaction levels as well. We've got more than a third of our customer base now using that. Obviously, all of those customers have come from previously buying first-class stamps.
I think the sort of the long-term direction of first-class stamps is a little bit uncertain. I think if you look at kind of what Royal Mail has done in the last few years, they've clearly raised the price from GBP 0.80 to GBP 1.70 in, I think, two or three years. There is a very kind of clear direction from them to significantly increase the price of first-class and ideally encourage customers to move into probably second-class or into tracked. I think with some of the changes that are being proposed with Ofcom, and we'll kind of see what happens, but there is a sort of consideration that actually you kind of move to a world where first-class and tracked services kind of converge in the long term.
I think for us, what's really important is we are offering all of our customers the best kind of offering we can. We have a compelling tracked service. We continue to offer first-class stamps, but it's slightly less compelling given the reliability of that service and the price differential. We are actually going to start exploring whether there's an economy service or some version of second-class, which we can offer customers that actually are ordering cards in advance. A significant amount of our customers are now scheduling orders in advance. Those could clearly use a second-class service, which would be more economical. We will launch that in the coming months as well. I think it's a moving feast, but we feel really well positioned that we've got best-in-class options for customers.
They've always got the option of adding a gift and moving straight into the courier network where we can use Royal Mail or DPD to deliver those. As gift attach grows, that also kind of helps. When you sort of look at the attached orders plus the tracked card orders, our dependence on first-class kind of is getting less and less. I think about your question on the gifting range. We've talked about some of the categories we've launched. I think going forward, there's some pretty exciting brands lined up where we're going to be partnering with some very well-known brands on flowers to potentially launch a range of flowers, but that are kind of branded under another flower brand. We're looking at books. Can we get a range of books from one of the national bookstores? Beauty, I think there's more we can do there.
We have actually signed with probably the largest chain of kind of beauty products in the country. I think there is a lot coming there. In terms of your question on premiumization, yeah, we'd love to sort of explore that further. I think what was really interesting was we launched 15 months ago, we launched Hotel Chocolat onto our platform. It is our number one brand. It jumped straight to number one brand despite being twice the price of all our other chocolate brands. It really resonates with customers as a gift. We know we have customers that are willing to spend a little bit more for the right product. Actually, that growth is continuing. Even Hotel Chocolat saw pretty extraordinary growth even at Father's Day just two weeks ago. I think we know there is demand there for these brands.
On the alcohol side, we have those brands. On the fragrance side, we have those brands. There are a couple of partners we're trying to work to get that. I can't share names at this point. There is one brand in particular, which is kind of homeware and gifting. We're kind of in a place where even internally, their commercial team is very excited about working together, but the founder of the business is kind of considering the brand resonance, and that's something we need to just prove. I think we're going to be adding more categories, better products, better well-known brands continuously through this year. The premiumization thing is kind of a little bit of a harder fight, but we've got some great case studies, and we'll get there.
Grand. That's helpful. Thank you very much, guys.
Our next question comes from Matthew McEacharn of Singer Capital Markets. Please unmute your line.
Great. Thanks very much. Morning, guys. You sound quite optimistic, Nickyl, about the experiences and changes that you're implementing. And there's a bit of detail in terms of slides 28 to 30, but I just wondered if you could really elaborate a bit more on also the timelines for some of these changes to make a real difference. You talked about medium term, but is there a scope for this business to start pivoting back to a growth trajectory later on this financial year?
Yeah, great question. I think probably the first thing to say is the experience business is a cyclical business. I think selling a, I think the average price point is around GBP 90 for the customer. It's a more discretionary gift. It's more cyclical than certainly our card business will be. To some extent, there's a sort of market headwind or tailwind, which we're kind of at the mercy of. We've been pretty clear that we wanted to transform the business when we bought it. We're now in the final phase of that transformation. We've fully rebuilt the tech platform, every part of that. We've rebuilt the team. I think we kind of started with the tech side. We've kind of, in the last probably six to nine months, rebuilt the sort of commercial marketing retail side of the team.
We feel we've got the right people in the right seats and the right structure now. Actually, those two things then enable us to sort of move on the third pillar, which is really refreshing the range. I think one of the things we've spoken about is we spoke about it in December is we kind of accept that probably the range of products we're selling was a little bit tired. It hadn't changed that much if you kind of think back five or even 10 years. The world has moved on, and there are many experiential things that you can do that are very topical, that are very in demand. There are some restaurants that have queues outside. There are concerts that sell out. There are experiences that just completely astonish.
I think our focus now is really accelerating the sort of pipeline of bringing on board new partners and new categories, which go to where the customer is, rather than kind of getting them to come to us. Rather than continuing to say, "Buy afternoon teas and the hotel stays," which continue to sell, actually, customers are going axe throwing in the evenings. They are doing VR, virtual reality, squid game events. People are doing more at-home experiences as well. I think we need to go there. That is what we are doing. We have got a really strong pipeline now. We are kind of working through that pipeline to sort of onboard these new partners.
I think what we'll start to see is in the next one month, three months, four months, five months, we'll really start to see the range change a lot. I think some of the categories we've talked about are subscriptions. I think we've got about 40 different subscription partners that are kind of in the pipeline, and hopefully, we can build that. We've become almost the home of subscription gifting in the U.K., whether that's a beer subscription or a flower subscription or a coffee subscription. I think we want to offer those. I think those are digital. It can all be done digitally. I think for immersive experience and live experiences, I think that's really critical. We've got Squid Games experience, Traitors experience. I think those things. We've got exclusives on those.
We will be the exclusive kind of third-party reseller of those events, which we know are going to be very popular. I think there is those. Then just within Gourmet, just making sure we have all of the key brands that customers love and kind of leveraging what we have to do that. I think for us, what we are confident on is that in the next few months, the range will start to look a lot more fresh and a lot more relevant to customers. In parallel, we have a new tech platform, so we can continue to optimize how we present those products to customers, how search technology works, how we can show them to customers.
I guess my experience in my career kind of tells me that if you get those two things right, if you're offering the right products to customers, if you're offering relevant products to customers and you're doing it through a sort of seamless digital experience, that will drive customer growth, that will drive conversion rates, and that will drive NPS and frequency. I think that's the plan. We've got a clear strategy. We're executing on it. We hope that that will kind of start to drive financial kind of improvement as soon as possible. I think we're not, I don't think we're kind of committing to growth numbers in the short term.
No, sure. No, that is pretty helpful background. I mean, do you think that once you've completed or once you've got some scale in terms of the new proposition, the range, would you envisage the brands needing some additional marketing just to raise awareness? Or do you think you would just simply be trying to convert your existing traffic and spend and then reinvest some once the business is back on a positive footing, they then start reinvesting in additional marketing?
Yeah, I think probably so I don't think there's going to there won't be a sort of big brand investment. I think we're being more and more creative across the group, actually, in just how we kind of keep that drumbeat of marketing on. Actually, Greetz is a good example of this where there's just the acceleration in partnerships that we're doing, kind of leveraging other brands and just whether that's influencers, whether that's some of our suppliers and partners, or whether that's just random partnerships. In the U.S., we just did a partnership with Calm, the meditation app, and that brought a whole lot of new customers in. I think we're looking at kind of partnerships as almost a way that doesn't require paid advertising dollars, but really just means that kind of all year round, we're just constantly getting in front of the customer.
I think Experiences has a really great opportunity to do that because we work with so many partners. I think kind of really turning on partnerships, being kind of clever with the way that we do social media, which can be a lot more cost-effective, I think we can kind of create that drumbeat and build that brand momentum. One thing I would say in Greetz, as an example, we have been doing this for about six, seven months now. What we have seen is kind of the brand demand, so kind of the amount of customers searching for Greetz on any given day has gone from negative to positive in the last few months. Actually, that is growing year on year. That is kind of a result of six, seven months of reasonably low-touch investment and very hard work on the partnerships and PR side.
I think that's the strategy we'll look to replicate on the experience side. For example, we have exclusivity on the Traitors experience in London, right? We know that's going to be hugely in demand. It's going to be in vogue. It's going to be all over TikTok. There are ways to leverage that that don't require spending huge amounts of advertising dollars.
That's very helpful. Thanks very much, indeed. Cheers.
Thank you.
Our next question comes from Caroline Gulliver of Equity Development. Please unmute your line. Our next question comes from Anubhav Malhotra of Panmure Liberum. Please unmute your line.
Hi, Annabelle. I think you're still muted.
Hi. Can you hear me now?
Hi. How are you?
Hi. Very good. Very good. Thank you. I just wanted to also ask on the experiences business. I mean, do you feel comfortable with the level of earnings that you make in the experiences business? Is that a factor in giving more back to some of the new suppliers that you want to onboard onto the platform to be able to let them get in without giving up too much of their, because, obviously, I mean, some of the restaurants or the experiences businesses all over the U.K. are under pressure on their margins as well. Maybe giving up some of that would be a way of getting them in. Do you feel that's something you can do? The second one, again, on the experiences business, you have two brands there. There's Buyagift. There's Red Letter Days.
Do you think there's a need for a more clear differentiation between what each of the two brands stand for? Or do you think it is already very clear in the consumer's mind? Thank you.
Andy, do you want to take the first, and I'll take the second?
Yeah, sure. I mean, I suppose I take the point, Annabelle, that that would be one strategy. Actually, what we're finding is that we're getting really good traction with suppliers without having to do that. To the comments that Nickyl, we're just starting to see new products come through to the website, but actually, we have a really strong pipeline in the background, and that includes not just those sort of immersive experiences, but actually a significant number of conversations with people in the pub sector and casual dining and in subscriptions. Actually, I think we're in a really great place where we will be able to have a very significant impact on the product range and broaden it into categories where the experiences brands haven't historically been as strong.
We will not need to dilute the margin rate of the business in order to do that.
Yeah. I think on the brand strategy, I think there probably is more we can do to differentiate. I think what is clear is Buyagift is kind of more of a value-driven kind of brand for everyone where we kind of want the broadest range. It is almost we think about it more as the Amazon of gift experiences, whereas Red Letter Days does cater to a sort of more curated, slightly more premium offering. I think there is more we can do to probably differentiate those. I think for us, that is probably not the key priority. I think the key priority is making sure we have got great products available on both of those brands and then kind of working on the differentiation after that.
Thank you very much.
Our next question comes from Wayne Brown of Liberum. Please unmute your line.
Morning, gents. Hi. Sorry, I was a bit late at the course. If this question's been asked, humble apologies. Funky Pigeon is kind of de facto up for sale, and it's our understanding that their marketing budget has been pulled back somewhat. Can you give us some indication on two levels? One, on an organic search perspective or maybe even also paid, are you performing better now than you were historically? And maybe is there some frustration maybe that that isn't necessarily yet being seen in the underlying growth of Moonpig itself? Or am I just looking at this in the wrong way and I'm missing something? Thanks.
Yeah. If I understand your question correctly, I mean, we have not seen any change in the competitive environment. I think we have kind of always felt that Moonpig is taking share in the market and continues to do so. We have not seen a change in that trajectory. I think Funky Pigeon, they publish their results every six months. As far as we understand, their last results showed them at sort of zero growth and zero profit. It is unclear. We do not have visibility on exactly what the strategy is, but we have not seen a change in the competitive environment. I think we are seeing growth come through on the Moonpig side, right? We are seeing order growth, attached growth, customer growth, frequency growth. Yeah, I am not sure I fully understood the question.
Yeah. That's just more a relative question as to trends beforehand, but that's fine. Thank you.
Thanks.
As there are no further questions on the webinar, I will now hand over to Nickyl Raithatha for closing remarks. Please go ahead.
Yeah, look, thank you, everyone, for joining the call. Thanks for your questions. I look forward to speaking to you, hopefully, very soon. Bye-bye.