Shares dip as online retailer reports £11.7m loss

Shares dipped in Bolton online retailer AO Com after the company reported losses of £11.7m.

The firm’s interim results were published yesterday and the company announced that group operating losses were £11.7m compared with £12m last year.

However, there was continued revenue growth with total revenue for the period increasing by 9.9% to £404.2m.

The growth came against a tough trading environment in UK and Europe and a declining MDA market^.

Group Adjusted EBITDA losses were reduced to £5.4m  from £6.3m in 2017.

There was also an exceptional cost of £1.4m in relation to the proposed acquisition of Mobile Phones Direct.

Customer numbers now exceeds five million in the UK and is approaching six million across all territories^.

Steve Caunce, AO chief executive, said: “This has been a half of continued delivery against our long-term strategy, thanks to a strong offer for customers.

“While our core UK and Germany MDA markets have been challenging, with the UK MDA market becoming tougher than expected, we take encouragement that we are at least maintaining market share in this core category in the UK and growing significantly in Germany.

“Elsewhere, our continued focus on growing our range of online electricals and adding new complementary ranges proved successful in the first six months of the year, with newer categories such as Audio Visual and Computing performing particularly well.

“Similarly, we are excited about further strengthening our customer offer through the acquisition of the UK’s leading online-only mobile phone retailer, Mobile Phones Direct.

“Customers continue to love AO, as demonstrated through the satisfaction metrics which remain very strong, and awareness of the AO brand has further improved through the recent launch of our ‘Delivering Tomorrow’ campaign.

“While we faced some operational challenges with our driver model in Germany which had an effect on our second quarter we expect to return to our targeted growth levels in Germany over the next few months.

“Our peak trading period began on 9 November with the launch of our biggest ever Black Friday and I remain confident of achieving long-term sustainable growth across the Group. We expect full year results to fall within the range of Board expectations, albeit more second half weighted than previously anticipated.”