MARKET REPORT: Moonpig shares hit over Christmas delivery fears

Shares in Moonpig tumbled after strikes fuelled fears that Christmas cards and presents could be stranded in the post.

With Royal Mail staff set to strike for three more days this month, including on Christmas Eve, City analysts warned Moonpig could be hit hard by the industrial action alongside rising interest rates and falling consumer spending.

The firm allows customers to design their own cards on its website. Moonpig then sends them on behalf of the customer to the recipient, usually via Royal Mail. But its shares fell 5.8 per cent, or 6.9p, to 112.5p as investors feared the business model had ground to a halt. 

Delays: Moonpig allows customers to design their own cards on the website. It then sends the cards on behalf of the customer to the recipient, usually via Royal Mail

Jefferies cut its target price on the stock to 290p from 380p, while Davy analyst David Reynolds warned the stock could get hammered over the festive period.

He said: ‘Moonpig is undoubtedly being impacted by the Royal Mail strikes. The business model must be straining every sinew.’

Last week it slashed its revenue forecast from £350million to £320million for the end of its financial year. 

The FTSE 100 was down 0.1 per cent, or 6.96 points, to 7495.93 and the FTSE 250 fell 0.3 per cent, or 48.37 points, to 19,037.92, as inflation in the UK dipped to 10.7 per cent in November, down from 11.1 per cent in October.

The latest figures come as the Bank of England prepares to raise rates by 0.5 per cent.

AJ Bell financial analyst Danni Hewson warned that the inflation figures will do little to persuade striking workers to accept pay deals that don’t come close to covering the rising cost of living.

AstraZeneca received a dose of good news after Jefferies raised the pharma giant’s target price to 10,500p from 9800p. 

Stock Watch – Cohort

Cohort, a maker of submarine sonar and naval communication systems, celebrated its order book reaching a record high of £304.2m in the six months to October – up from £291m in April.

Revenue jumped 29pc to £77.5m, buoyed by supplying the Ministry of Defence with equipment such as armoured fighting vehicle hearing protection. Profit at £1.1m swung from a loss of £1.7m a year earlier. The interim dividend was hiked 10pc to 4.25p. Shares soared 4.9pc, or 20p, to 430p.

It inched up 0.7 per cent, or 74p, to 11,400p. As part of a plan to shake up its broadband prices, BT networking unit Openreach said it will offer cheaper rates for internet providers such as Sky and TalkTalk to win over more customers to its fibre network.

But rival Virgin Media O2 called on regulators to scrutinise the plans, with boss Lutz Schuler saying the Government and Ofcom should ‘safeguard fair competition’ and ensure that Openreach was not ‘using its market power and dominance’ to deter providers switching to other networks.

Shares in the telecoms giant rose 2.1 per cent, or 2.35p, to 116.25p.

Taylor Wimpey sank into the red after JP Morgan lowered the housebuilder’s rating to ‘neutral’ from ‘overweight’ and cut the target price to 110p from 170p.

The broker warned UK house prices could fall 10 per cent following a slowdown in demand. Shares fell 1.9 per cent, or 1.95p, to 102.25p.

Other housebuilders to fall included Barratt (down 1.3 per cent, or 5.4p, to 403.6p), Berkeley (down 0.3 per cent, or 12p, to 3814p), Vistry (down 0.9 per cent, or 5.5p, to 616p), and Redrow (down by 3.3 per cent, or 15.4p, to 457p).

The biggest faller among the second tier, travel giant Tui said it wanted to raise up to £1.3billion and repay some of the Covid bailout money received from Germany.

The Anglo-German company plans to fully repay money from Berlin’s economic stabilisation fund as well as a warrant bond.

Tui revenue surged 250 per cent to £14.2billion for the year to September – near pre-pandemic levels – while its losses narrowed to £182.5million from £2.1billion a year earlier. Shares tumbled 8 per cent, or 11.8p, to 135.85p.

There was also bad news for Watches of Switzerland despite revenue rising 31 per cent to £765million over the six months to October.

The company behind brands such as Rolex and Patek Philippe, opened 20 showrooms and refurbished seven others in the UK, US and Europe in the six months to October, at a cost of £27million.

It said there were some issues over cash flow as a result of increased investment. Its shares declined 5.3 per cent, or 51p, to 908p.