PhotoBox Group Accelerates Revenue Growth in the 12 Months Ended 30 April 2014

LONDON, June 17, 2014 /PRNewswire/ --

- Year-on-Year Group revenue growth accelerates to 18.8% with mobile sales a key driver - 

- Over 2 million Photobooks created and more than 12 million Moonpig cards stamped and sent - 

- £50m four year revolving credit facility secured with Barclays and RBS to help fund potential M&A -  

PhotoBox Holdco Limited (the "Group"), Europe's leading digital consumer service for personalised products and gifts and operator of the PhotoBox, Moonpig, PaperShaker and Sticky9 brands today announces financial results for the 12 months ended 30 April 2014.

The financial results reflect a confident year for the Group with both PhotoBox and Moonpig delivering another year of solid double-digit revenue growth and overall Group revenue growth accelerating to 18.8%.  This robust financial performance was driven by increases in order numbers and average order values across all four of the Group's consumer brands.  Investments made by the Group over the past twelve months in mobile sales platforms have been rewarded by enthusiastic customer take-up, with PhotoBox and Moonpig mobile orders both significantly higher year-on-year ("YoY").

    Key Financial Metrics

                             12 months ended  12 months ended          YoY Growth
                              30 April 2014    30 April 2013

    Revenue (GBPm)                175.3            147.6        +18.8% (+17.6% FX adjusted)
    Gross Profit (GBPm)            91.6             77.4        +18.4%
    Gross Margin (%)                 52%              52%
    Underlying EBITDA[1] (GBPm)    19.8             19.6           +1%

Operational Headlines 

• 18.8% YoY Group Revenue growth (+17.6% FX adjusted), up from 13.3% in FY13 (15.5% FX adjusted) proving the continued, international popularity of personalised gifting
• Strong Group Gross Margin maintained at 52%
• Underlying EBITDA marginally higher YoY in spite of increased investments in marketing, mobile sales platforms and expansion in growth markets
• Smartphone and tablet shoppers a significant contributor to growth, evidenced by a threefold increase in the proportion of orders transacted on mobile devices at PhotoBox and a 65.0% increase at Moonpig
• Deep customer loyalty, with 69.3% of PhotoBox sales and 77.2% of Moonpig sales from repeat customers
• Highly cash generative, with £21.3m of Net Cash Generated from Operating Activities^[2] in the year

Commenting on the results Stan Laurent, Group Chief Executive Officer said: 

"I am proud to report on another year of strong, even accelerated growth driven by the development of our multi-brand product offerings, our international expansion and our mobile routes to market. All three of these growth engines are firing on all cylinders and meeting with great consumer response. The £50m credit facility secured today gives us additional firepower to further accelerate our plans via targeted acquisitions. We're excited to lead the way in the increasingly mobile-centric world of online personalised products in Europe."    

Performance Review 

The key points of this year's Group financial performance can be characterised as follows:

Group revenue momentum continues to build 

Group results reflect another year of strong performance across the business.  Group revenue grew by 18.8% YoY to £175.3m, with each one of our four brands contributing to this double-digit performance.  Whilst PhotoBox and Moonpig continued to deliver consistent, confident revenue growth, this year each of our four brands delivered increases in order numbers and average order volumes while maintaining healthy levels of repeat customer revenue.  

Group Gross Margin remained high at 52%, enabled by the continued scale effects of higher order volumes and an ongoing focus on tight operational control.  Gross Profit increased by 18.4% YoY to £91.6m and Underlying EBITDA was marginally higher YoY at £19.8m, in spite of significant investments made this year in marketing activities, the development of mobile sales platforms and expansion in growth markets.

During the year a number of new sales records were set across the Group, particularly at PhotoBox which shipped 2m photobooks: the highest ever annual volume.  Seasonal events also continue to provide the Group with opportunities to drive additional growth.  During this year's Christmas season, our four brands recorded more than 100,000 orders on their peak December trading days - equivalent to more than one order per second over a 24 hour period - and shipped over 9m Christmas cards and gifts worldwide. And, as mobile platforms fuel sales growth, mobile devices themselves have opened up exciting new product opportunities, with sales of personalised tablet and smartphone covers 150% higher at Christmas 2013 compared to 2012.

Mobile platforms drive sales and loyalty 

During the year, the Group successfully launched new versions of its PhotoBox and Moonpig mobile and tablet apps in addition to the launch of a new Photobox-branded photobook app for iPad.  Both brands also revamped their websites to improve usability for tablet and mobile users. Today, the Group operates mobile apps in seven countries and intends to increase this figure further in the year ahead.

The growth potential of mobile can be clearly seen in this year's customer adoption rates.  Over the past 12 months, smartphone and tablet shoppers generated a threefold increase in the proportion of orders transacted on mobile at PhotoBox and a 65.0% increase at Moonpig.  In the final quarter of the financial year, nearly 38.0% of all Moonpig transactions were made on a mobile device, compared to 19.0% in the prior year.

Investment in market share expansion, international development and product innovation 

Today, PhotoBox Group operates in 20 markets and ships products to 120 countries. The Group increased its market share in long-standing markets such as the UK and France, and also replicated this success with growth significantly above Group average in its other European and Australian markets.

The Group also focused on broadening its market reach further through investment in its younger PaperShaker and Sticky9 brands. PaperShaker - synonymous with stylish birth announcements and invitations - expanded its range of products and designs and added to its UK launch with launches in France and in Germany.  Sticky9 - famous for its Instagram photo fridge magnets - localised its service for nine countries and expanded its product range to now include three sizes of magnets, as well as phone cases and tablet covers.

New credit facility secured 

In addition to the strong financial performance outlined today, the Group is also pleased to announce that it has secured new funding to fuel potential future M&A activity.  During the year, aided by strong operating cashflow generation, the Group completed the repayment of a £50m debt facility raised to fund the Moonpig acquisition.  Having repaid this facility in just three years, the Group is today pleased to confirm that it has secured a new, four year, £50m revolving credit facility from Barclays and RBS.  PhotoBox Group intends to use these funds for potential target M&A activity, which would support its geographic, product and mobile expansion as it continues to build on its position as the leading consumer service for personalised products in Europe.

Outlook  

The Photobox Group enters FY 15 in a confident position, bolstered by a strong FY 14 financial performance and by the Group's enhanced ability to invest in future growth opportunities.  The current financial year has started promisingly, with each of the Group's four brands delivering record Father's day sales so far.  The management team's focus will continue to rest on driving strong, profitable revenue growth from its operations, driven by product innovation, excellent service, further investment in mobile and continued international expansion.

1    Underlying EBITDA is defined as earnings before net finance costs, taxation, depreciation and amortization, excluding exceptional and non-recurring items, share option expense and foreign exchange gains/(losses)

2    Net Cash Generated from Operating Activities is defined as cash generated from operations, plus interest received, less tax paid.

About Photobox Group  

The PhotoBox Group is a leading digital consumer service for personalised products and gifts in Europe and parent of the flagship branded retail channels PhotoBox, Moonpig.com, Sticky9 and Paper-Shaker.com. From photobooks and unique artwork to the very latest personalised apparel, gifts and greeting cards, the Group's products enable customers across 20 countries to share memories, celebrate great moments and inject personal expression into their everyday lives. The Group has 700 employees across Europe and is backed by leading international private equity firms including Insight Venture Partners, Index Ventures, Highland Capital Partners, HarbourVest Partners, Quilvest Ventures and Greenspring Associates.

Contacts
FTI Consulting LLP
+44(0)20-3727-1000
Matt Dixon / Jon Snowball