AO ‘making progress’ despite missing profit goal

ONLINE white goods and TV retailer AO World, has reported a jump in revenue for the year to the end of March.

The Bolton’s company’s results though were behind City expectations, as a profit warning in February had predicted.

Revenue jumped 23.8% to £470.8m, while EBITDA fell from £11.2m 12 months ago to £8.5m after allowing for £8m of losses related to the launch of its business in Germany.

There was strong EBITDA growth of 47.3% to £16.5m in the UK though, despite what the company described as a “number of challenges encountered during the year”, most notably a slowdown in sales in the fourth quarter, which sparked the profit warning.

At the bottom line AO, which floated in early 2014 with a £1.2bn market capitilisation, pre-tax losses were £2.8m compared with £7.5m.

Founder and chief executive John Roberts said: “Our long-term plan is on track and, despite missing our financial expectations for the year, we have continued to take market share in the UK MDA (major domestic appliances) market delivering significant growth in UK sales and Adjusted EBITDA.  

“Our customer proposition remains strong – our unbeatable prices, huge range and amazing service mean our customer satisfaction levels have remained exceptional and we will continue to focus on this in the year ahead. The passion we have for our customers, staff and all other stakeholders has never been stronger and we still believe we can change the way Europe buys its electricals, simply by caring more and executing brilliantly.”

The company said that although the current trading environment in the UL “remains challenging”, it is on track with its plans “at this early stage of the new financial year.”

AO said it was encouraged by its early progress in German, six months after launch there.