Good morning, welcome to the Moonpig Group full year results presentation. I'm Nickyl Raithatha, Chief Executive, and I'm here today with Andy Mckinlay, our CFO. First, I'd like to draw your attention to the disclaimer. Please take a moment to read it. In terms of the running order today, I'll give a quick overview, I'll turn to Andy to take us through the numbers, we'll close with a strategic update from myself. Overall, it has been a solid year, which has demonstrated the resilience and strengths of our unique business model. With the acquisition of Buyagift and Red Letter Days, we have delivered revenue growth, we've strengthened our margin, and generated strong cash flow to bring our leverage below our target levels. Despite the challenging consumer environment, it was not a year where we stood still.
The resilience and flexibility of our business model allowed us to continue investing in our strategic pillars while maintaining profitability. During the course of the year, we completed several milestone strategic projects, including the re-platforming of our technology across our card brands and building our two major operational centers in both the UK and the Netherlands. This now brings us to a period where we can refocus our attention, and in particular, our technical resource towards innovation and growth, delivering more for our customers, and we're very excited at the early progress we are making here.
We added the Buyagift and Red Letter Days brands to our group this year, and it has been a transformational year for the experience business, where we have made significant investments to unlock the full potential of the platform, and we expect the first benefits of this to start being realized in the first half of this year. With the Moonpig brand back to growth over the last few months, and our other brands expected to return to growth over the course of this year, we are excited to continue on our journey of becoming the ultimate gifting companion. With that, I'll pass on to Andy to take you through the results in more detail.
Thanks, Nickyl. Good morning, everyone. As Nickyl said, we've delivered a solid set of financial results despite the difficult market environment from October onwards. Group revenue was GBP 320 million, which was 5% up year-on-year, with our new experience segment contributing GBP 42 million, which broadly offset the estimated GBP 39 million of prior year impact from COVID lockdown. We delivered Adjusted EBITDA of GBP 84 million, up 12% year-on-year, with an increase in our Adjusted EBITDA margin rate to 26.3%, illustrating the high and sustainable profitability of our financial model. As expected, our strong operating cash flow drove rapid deleveraging. We brought pro forma net leverage down to 1.97 times at the end of the financial year, and we have significant liquidity headroom of GBP 102 million against facilities that are committed until December 2025.
At Moonpig and Greetz, we've driven an 8% year-on-year increase in average order value through price changes and more targeted use of promotional discounting, which more than offset the impact from customers trading down to lower price gifts. The year-on-year reduction in total orders primarily reflects annualization against prior year COVID impact and the economic downturn seen from October onwards, with some impact from Royal Mail strikes in the run-up to Christmas. The trend in orders is strongest for our existing customers, that reflects how we've built a business model around customer lifetime value. Existing customers account for nine-tenths of Moonpig and Greetz revenue from existing customers grew at 8% year-on-year on an underlying basis. Our investments in marketing remain significant.
However, the environment for new customer acquisition has been challenging, and we've chosen to maintain payback periods within our existing framework, which means that new customer revenue has stepped back year on year, whilst remaining ahead of pre-COVID levels. Turning now to revenue by product category. Moonpig and Greetz both operate a card-first strategy, which leverages the wider resilience of the greeting card market. More than 19 out of 20 orders of these brands contains a card. Across the year, cards revenue grew by 14% on an underlying basis. The context of gifting has been more challenging. We saw an underlying year-on-year decrease of 4% in gifting revenue at Moonpig and Greetz, driven by consumers trading down to lower price points. The experiences segment is a gift-first business, and trading has slowed.
Revenue growth decelerated from a high teens percentage in H1 to 4% in the second half of the year. Experiences will operate against challenging prior comparatives in the first half of FY24. Bringing all of that together, our two card-first brands together delivered revenue of GBP 279 million. That's underlying growth of 5% year-on-year, after stripping out prior year COVID impact. There's been an enduring step up in the scale of Moonpig and Greetz across the period of the pandemic, enabled by the loyalty of our customer cohorts and our significant ongoing investment in technology and data.
Looking at the total group, consolidated revenue was GBP 320 million, which was up 5% year-over-year, with the GBP 42 million of experiences revenue broadly offsetting the GBP 39 million estimated prior year impact of COVID on Moonpig and Greetz. The revenue trend was strongest at Moonpig. In part, this reflects the fact that Greetz had tougher prior year comparatives due to stricter lockdown measures in the Netherlands. It also reflects the fact that Moonpig has benefited from sustained investment technology over multiple years. With the re-platforming complete, we can now use data and technology to drive customer loyalty in the Netherlands in the same way as we've done in the UK.
Turning now to look at profitability, we've raised gross profit year-on-year to GBP 180 million, reflecting an increase in gross margin rate of 680 basis points, which includes the positive mix impact from the acquisition of experiences. There has been margin rate improvement at Moonpig, reflecting intake margin negotiation, card price changes, and more precise targeting of promotions, as well as the benefits from in-source gift fulfillment at Tamworth. Gross margin at Greetz was slightly lower, reflecting normalization following a period of relatively low promotional intensity last year. Across the group, we continue to see no material impact on gross margin rate from cost inflation at any of our brands. This growth in gross profit has enabled us to deliver Adjusted EBITDA of GBP 84 million, in line with expectations.
Across the last 4 years, we have raised Adjusted EBITDA margin rate from 18.9% to 26.3%, and these high and sustainable profit margins are a key characteristic of our financial model. The flexibility of that model means that we can maintain profitability at all stages of the economic cycle. We delivered this in FY23 through a combination of prioritizing resources towards higher margin cards and peak events, strengthening our gifting range at lower price points, card pricing optimization, and disciplined indirect cost management. Moving now to the bottom half of the P&L. We delivered Adjusted PBT of GBP 48 million and Adjusted Basic EPS of GBP 0.111. The amortization charge for intangibles arising on business combination increased following the acquisition of experiences. For clarity, we do not exclude this amortization from our adjusted profit measures.
There was also an increase in amortization of internally developed assets, driven by increased investment in technology, as well as additional depreciation relating to our new operational facilities. The net interest charge increased as a result of higher leverage and the increase in interest rates. Turning now to how we convert profits into cash flow, the business delivered strong operating cash conversion of 111% in the second half of the year, driving full year operating cash flow of GBP 56 million. Full year operating cash conversion of 67% was below previous trend as a result of additional tangible CapEx on new operation facilities, which is not expected to recur in future periods. We therefore expect cash generation and de-leveraging in FY24 and beyond, with a continued seasonal weighting into the second half of each year.
As expected, this strong net cash flow has driven rapid repayment of our borrowings, enabling us to bring net leverage down to below 2 times, with net debt to pro forma EBITDA of 1.97 times. Our short-term capital allocation priority remains unchanged, and it is de-leveraging. Our balance sheet is liquid, with headroom of GBP 102 million. We have significant levels of covenant headroom, and our facilities are committed until December 2025. We have also hedged floating interest rate exposure for three quarters of our expected net senior debt until November 2024. Finally, turning to outlook. Trading since the start of the year has been in line with our expectations.
In the context of the current macroeconomic environment, we expect pro forma revenue to grow at a low single-digit % rate in the first half of FY24, underpinned by the Moonpig brand, which has been in growth since March. For the full financial year, we expect consolidated revenue growth at a mid-to-high single-digit % rate, with all of our brands returning to growth in the second half. Adjusted EBITDA margin is expected to remain resilient. Now I'll hand back to Nickyl, who will talk through the strategic progress that we've made during the year.
Thank you, Andy. I'll now give an update on our strategic progress. We are operating in a challenging environment, but we have clear resilience. We're the online leaders in our core stable markets, with a card-first strategy that leverages the countercyclicality of the cards market. We have high customer retention, with over two decades of loyal customer cohorts, and we have seen no significant impact cost inflation on our gross margin rate, and have strong operating cash flow to drive further de-leveraging. When we spoke at the half year results in December, we presented a similar slide to this one, showcasing the flexibility in our business model to adapt to changing customer behaviors and needs whilst maintaining profitability.
We believe the results of the last six months are a testament to that flexibility, where we were able to shift emphasis between categories and events, to flex our cost base, to take a dynamic approach to pricing and promotions, and to adapt our gifting range and mix at short notice. That gives us even more confidence in the underlying strengths of our model than ever before. It's these aspects of our business that have meant that we could continue to make significant strategic investments throughout the year. It has been a milestone year of delivery, where we have built the foundations to drive a long-term growth roadmap. Our technology function has now scaled to 250, and we are starting to see this deliver into customer-facing features and innovations.
Our four-year platform project is now complete across both Moonpig and Greetz. This underpins the possibilities for our team to deliver. We opened two major new operational facilities, which will fulfill the majority of our orders in the U.K. and the Netherlands. We made significant strategic progress at the new experiences division, with a new leadership team in place, a new operating model, and the technology re-platforming well underway. I'll now give you some more color on each of our divisions, starting with the card brands first. Our card brands, Moonpig and Greetz, are built on a model of card-first and gift attach. We are the clear online leaders in a card market that is still in the early stages of shifting online.
We have consistently been able to acquire customers with short payback times and to drive their loyalty using the data we get from each card. We then use the data from each card purchase as an opportunity for a targeted upsell to a gift, with no associated marketing costs, delivering a highly profitable gifting revenue stream. The strongest validation of this strategy over the last years is in our market share, where despite being the leader, we have continued to take share in both the U.K. and the Netherlands over the past years. For the first time, our share of the online market in the U.K. is now 70%. With only 15% of the card market online, there is still a long runway of growth ahead of us, and this is most clearly demonstrated in the three growth levers that drive our business.
Continuing to acquire more customers, getting each of them to buy more cards per year, and getting them to add more gifts to those cards, creates a compelling and compounding long-term growth opportunity. The extraordinary loyalty shown by our customers throughout this cycle is due to the way we capture and use data to personalize their experience, and reminders are at the core of this proprietary data set. We now have over 84 million reminders set by our customers, which are driving an increasing share of our overall business. Our apps are also a critical tool to increase customer frequency and retention, and we are just at the beginning of the journey at Greetz, which now has native apps for the first time following the platform project.
We're also looking at expanding our market and looking at innovative ways of driving customer acquisition, and our revamped group cards project does both of those. In particular, as card collaborators who contribute a message to a group card discover Moonpig for the first time and can then be converted to customers themselves. As we have started to move away from re-platforming work and shifted a significant proportion of our technical resource towards customer-facing initiatives, there are several new products and features that are already live and starting to get traction. One of the most exciting levers we've recently launched is our new subscription scheme, Moonpig Plus. It's a relatively simple scheme where customers pay a fixed fee per year and get several benefits, including a discount on all cards.
We will continue to iterate the scheme and add further benefits to the program over the coming months, but we are encouraged by the early results, with tens of thousands of sign-ups in the first few weeks. We have a high degree of confidence that this will increase the frequency of our customers, having tested it extensively over the past year. We've also made progress to enhance the gifting side of the business, where despite the macro headwinds, there is still a long roadmap of improvements we can make. We introduced gift bundles for the first time, putting the card and the gift together, and it saw great take-up, particularly during our peak periods. Greetz can now benefit from the recommendation algorithms following the platform project, and those are starting to kick in.
We've added gifting options at more points in the user journey, with particular success when we embedded low price gifts directly into the basket page. We've also launched an entirely new product category, personalized balloons, which launched at Greetz, where we are the only company to offer such a product in the Dutch market, and we will bring it to the UK in the coming months. As we think about the long-term opportunity in our business, it is to continue to drive the shift of the card market online. For us to do so, it is imperative that we continue to innovate and elevate our product above that of the high street. We have begun a project to load our cards with numerous value-add features, particularly those that sit on the inside of the card, an area which has received little attention in previous years.
The first of these value-add features is video cards, which we mentioned was launched as a test in December. These have now been scaled across the range. Our customers have now sent over 75,000 video messages to their loved ones. This will continue to scale. The feedback we have from our customers is overwhelmingly positive. We have also added stickers, flexible photos, flexible text fields, and handwriting options into our card editor, giving the customer multiple ways to make the inside of the card as magical as the outside. The take-up by our customers of each of these features has been very promising. We will continue to deliver more features throughout the course of the year. Last, but by no means least, we added the capability for digital gifting, further differentiating and elevating our card proposition ahead of the rest of the market.
Moonpig is now already the largest online retail partner for Buyagift, and we remain excited to further improve the proposition, extend the range, and drive awareness of this exciting new capability. I'll now turn to our experiences business, which we acquired last July. As we said at the time, we are very excited by the long-term opportunity for the business, and that with the right level of focus and investment, and by applying the Moonpig growth playbook, we were confident to unlock that potential. Our core strategic thesis is to transition the business away from being a transactional e-commerce business towards a lifetime value business with inbuilt network effects. By fully integrating with our suppliers, we will be able to offer customers a better range of products and to offer recipients a seamless booking experience, which will turn them into customers themselves.
We've made significant progress on this strategic journey in our first year already. The leadership team has been strengthened with a new managing director, who was previously the chief product officer at Moonpig, and we've invested in talent throughout the organization, particularly in the technology function. We've unlocked significant operational efficiencies with the team moving into the Moonpig offices and factories, and customer service being outsourced to the same partner as Moonpig. Our range continues to evolve with a particular focus on our hero partner strategy, with brands such as Harrods and Harvey Nichols coming on board in recent months. We've begun a project to differentiate our two brands, which will give them a clear and distinct positioning and will give us a stronger strategic foothold in the overall gift experience market.
It is, however, the technology platform and inter-technology integrations that are the single biggest lever for unlocking the potential of this business, and we will start to see the early benefits of our investments here over the coming months. We are relaunching the front end of the website with cleaner and more intuitive designs, powered by best-in-class algorithms, to help customers navigate to the perfect product as quickly as possible. We are integrating directly with more of our partners so that more of our gift recipients can book the experience directly on our platform. We continue to see encouraging results from each integration, both in the upsell opportunities and also in the conversion of recipients to customer.
After multiple years of underinvestment, we are rebuilding the foundations of our technology and data platforms, which will increase the stability and performance of our site and also the pace of future developments. In summary, it's been a solid year, where the challenging consumer environment put us to the test, but ultimately gave us an opportunity to demonstrate the inherent resilience and flexibility of our business model and to deliver EBITDA in line with expectations. We continue to be a highly cash-generative business with leverage below our target level, and we will continue to delever. It has been a milestone year of strategic delivery, and that sets us up now for a focus on customer innovation, and we are excited to deliver a full year of growth in FY24. Thank you for listening, and see you very shortly at the question and answer session.