MARKET REPORT: Moonpig Smartbox deal proves to be a gift to investors
Moonpig shares rose more than 11 per cent after the city gave the go-ahead for its £124m purchase of gift group Smartbox.
The online greeting card specialist said the deal will boost revenue to £350m next year, while improving profit margins and thus boosting earnings per share.
Smartbox’s main assets are the gift brands Buyagift and Red Letter Days. The latter is a gift experience group previously owned by former Dragons’ Den judge Rachel Elnaugh until she collapsed into management in 2005.
Liftoff: Moonpig said the acquisition of gift group Smartbox will boost revenue to £350m next year, while improving profit margins and boosting earnings per share.
Rescued by Dragon Peter Jones and Theo Paphitis, it was sold to Smartbox in 2017.
Moonpig has been “trying” to break into the gift market, with Russ Mould, chief investment officer at AJ Bell, saying the acquisition price was “not excessive” at nine times underlying earnings.
“Given the tarnished history of Red Letter Days, Moonpig shareholders will hope that this is not a doomed business and that the new owner regrets buying,” Mold added.
Moonpig shares rose 11.1 percent, or 26.2 pence, to 261.2 pence. Sticking with mid-caps, the day’s big riser was Kainos, the IT group, which reported its 12th straight year of growth.
Established in 1986 as a spin-off from Queen’s University Belfast, the company provides digital services to clients such as the NHS.
Annual revenue grew 29 per cent to nearly £303m, with Kainos chief executive Brendan Mooney providing an optimistic assessment of the outlook. The shares, which traded at an 18-month low last week, rose 19.3 percent, or 199 pence, to 1,231 pence.
Turning to the broader market, London’s major indices continued to lead where they finished last week.
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The FTSE 100 added 1.7 percent, or 123.46 points, to 7,513.44 and the FTSE 250 rose 1.6 percent, or 310.23 points, to 20,146.18.
Like Kainos, many of the top risers were coming off recent lows, with Royal Mail leading the top highs, rising 5.3 percent, or 16.6 pence, to 332 pence after sinking. recently to its lowest level since Christmas 2020.
Buyout firm Intermediate Capital and other investment groups 3i, M&G, Aviva and Abrdn were all up. Intermediate was up 4.7%, or 66p, at 1462p, 3i was up 0.7%, or 2.5p, at 351p, M&G was up 4.8%, or 9.9p, at 216.7p, Aviva was jumped 4.2 per cent, or 17.1 pence, to 429.2 pence and Abram jumped 2.8 per cent, or 1.5 pence, to 188.29 pence.
Pantheon International, the private equity investor, contributed to gains in the FTSE 250, which soared 5.7 percent, or 16 pence, to 296 pence after reporting higher monthly net asset value growth.
Among small-caps, Quantum Blockchain Technologies rose 21.6 percent, or 0.4 pence, to 2.25 pence after it said it had begun “experimental live bitcoin mining,” the final step of nearly a year of work by one of the company’s two machine learning teams. .
The collection of data from its mining activity has led to the development of its first two ‘knowledge-based algorithms’ which were implemented, with tests being carried out at the mine and by the company in the hope of filing patent applications.
Elsewhere, shares in marketing software company Pelatro rose 21.3 percent, or 4 pence, to 22.75 pence after its full-year results showed a small loss.
Futura Medical rose 10.8%, or 2.95 pence, to 30.4 pence after announcing that its topical treatment for erectile dysfunction would be distributed as an over-the-counter treatment throughout the European Union, the United Kingdom and Switzerland through through a five-year contract with a French group. Cooper Consumer Health.
There weren’t many big drops among the large caps, except for Intertek, where investors got ahead of the product test group’s trading update tomorrow. The share fell 3.9 percent, or 193 pence, to 4,706 pence.
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