Harry Fraser of Oldfield Partners presented his investment thesis on Moonpig (UK: MOON) at Wide-Moat Investing Summit 2026.

Thesis summary:

Moonpig is the dominant online personalised-cards platform in the UK, with a 70% online share that is four times its nearest rival, and in the Netherlands, where its Greetz brand holds 65%. A third leg spanning the US, Australia, and Ireland grew revenue 36% in FY25. The brands run on one technology platform serving 12m recurring customers, against 51m card-buying adults in the two core markets, most of whom have never bought a card online.

Harry frames the moat around data and habit. Over 100m saved reminders and addresses create switching costs, prompting customers to return for each occasion without checking rivals. Brand awareness is high enough that marketing runs near 8% of revenue. Roughly 90% of next year’s revenue is already known, since demand recurs regardless of GDP, leaving the business recession-resistant. Scale funds a Royal Mail next-day deal with a 10pm cut-off and personalisation now used in one of three cards.

The model is capital-light, converting ~22% EBIT margins almost entirely into FCF on negative working capital. Cards carry ~50% margins and, at half of sales, produce over 80% of gross profit; attached gifts and flowers lift average order value from £6 toward £25 and £55 without re-incurring marketing cost. Growth has two parts: structural migration online, where UK card volume online has doubled to 6% and 94% remains offline, plus self-help via Moonpig Plus subscriptions (1.02m, up from 0.75m), gift attachment (~40% of core revenue), and app orders (over 50%, from 16% five years ago).

Because growth needs little capital, Moonpig returns nearly all FCF. Buybacks step up from £25m in FY25 to £60m and £65m in FY26-27, alongside a rising dividend, together over 10% of the market cap, against a balance sheet near 1.0x net debt/EBITDA.

The shares recently traded near 218p, a ~9% FCF yield and 10x EV/EBIT, versus Etsy at 27.8x despite lower quality and more cyclical gifting. Harry’s base case of 3% order and AOV growth and £70m FCF at a 7% yield implies 302p and 40% upside; if the flywheels compound and order growth reaches 10%, £80m FCF at a 5% yield supports 480p. Including buybacks, dividends, and growth, he expects high-teens annual returns.

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About the instructor:

Harry Fraser joined Oldfield Partners in August 2011. He was previously employed by Herald Investment Management as a research analyst covering the media sector for a total of five years. He graduated from Newcastle University. He manages global smaller companies portfolios and contributes to the overall investment selection.

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