European investment plunges AO World into the red
Bolton-headquartered online electrical retailer AO World has made significant losses as a result of its investment into European expansion in the face of “challenging UK market conditions”.
The company made an adjusted EBITDA minus of £6.3m in the half year ended September 30, compared to a £1.5m in the same period last year.
However, there was continued growth of revenue which went up 13.3% to £368m from £324.7m.
Chief executive Steve Caunce said: “AO has made a good start to the year. We delivered further steady progress against our ‘4Cs strategy’ – growing revenues across all countries, maintaining high customer satisfaction levels and adding even more categories to our offer, all underpinned by our unique culture.
“We continued to improve and add to our customer journey, including the launch of our transactional app.
“We are broadly on track with our plans for the year as a whole – with the positive impact of improving sales growth through the first half of the year combined with the first half biased phasing of our marketing spend – in spite of the challenging UK market conditions.
“Our European operations continue to perform in line with the plan we’ve previously set out notwithstanding the adverse impact of foreign exchange rates on our reported performance.
“The AO culture is firmly embedding in Germany and The Netherlands and our foundations for growth are fully established.
“We are also building a number of exciting new vertically integrated capabilities under the AO banner, including our state-of-the-art recycling facility in Telford.”