£11m bonus on cards for Moonpig top team
Record sales in lockdown help bosses hit targets
MOONPig’S top brass are on course to bag bonuses worth £11m after it enjoyed a record Valentine’s Day.
Under a lucrative bonus scheme unveiled when the online cards company listed on the stock market this month, boss Nickyl raithatha and finance chief Andy MacKinnon will receive payouts worth up to £8.3m and £2.8m respectively for hitting targets.
They need to steer Moonpig to annual revenues of £275m and underlying profits of £70m to win the maximum amount.
And yesterday the firm already looked set to smash those targets, as it predicted annual sales of nearly £350m for this year.
That is after lockdown restrictions helped fuel record demand, with business getting an extra boost ‘as more customers attach gifts to their orders’.
The week before Valentine’s Day was its busiest ever. if the company manages to preserve its underlying profit margin of 26pc from last year, as has been suggested, it would easily meet the other requirement for raithatha and MacKinnon’s bonuses as well. The pair are already toasting multi-million pound payouts following the company’s float earlier this month. raithatha, 38, made £6m from selling shares and retains a stake worth another £18m, while MacKinnon, 46, sold shares worth £950,000 and retains a £2.9m holding. Chairman Kate Swann, former boss of WH Smith, also sold £3.4m worth of shares in the offering and held on to a stake worth £10.9m. However, raithatha and MacKinnon’s payouts will not be confirmed until 2023 – meaning they would need to keep the sales and profits above the required levels until then.
Analysts are split on whether socalled ‘Covid winners’ such as Moonpig will consolidate all of their gains from the pandemic, with the company itself warning that sales are expected to ‘moderate’ as restrictions ease.
The business has already doubled its half-year revenues in the six months to October 31, however, as the lockdowns drove sales of greetings cards online. And a trading update yesterday confirmed it is now on track to double its annual revenues as well after the strong Valentine’s Day showing – with Mother’s Day next month also seen as promising. it means the £173.1m in revenues Moonpig reported for the year to April 30, 2020 could jump to around £346m this year.
The company sent 46m cards and 7m gifts in the year to October 31 and claimed in its prospectus that there is still plenty of opportunity for growth, but declined to comment last night when asked about the bonus scheme.