AO.com raises £50m through share placing

Bolton-based online domestic appliances company AO World has raised £50m through a share placing – its first fundraising since its 2014 initial pubic offering (IPO).

The placing of around 38 million new shares represents around 9% of the company’s existing share capital.

The money raised will be used to support continued growth and increase scale, provide flexibility to react to market opportunities and changes, and strengthen its balance sheet for supplier partners, the company said.

AO World also reported that turnover is expected to be around £700m for the year to the end of March 2017, up 17% year-on-year.

Last month, founder John Roberts stepped aside as chief executive to allow its chief operating officer Steve Caunce to take over the role.

Roberts, 43, set up the £600m turnover business in 2000 and retains a 26% stake. His new role will be as founder and executive director with a focus on innovation and inspiring AO’s staff.

Both Caunce and Roberts have taken around £2m of the new shares each, while non-executive director Chris Hopkinson and chief financial offiser Mark Higgins have also bought shares.

Steve Caunce, chief executive of AO World, said: “We have seen another year of strong growth – in the UK and in Europe – as we continue to deliver on our 4C’s strategy and opened our European distribution centre in Bergheim. This was achieved in spite of the challenging dynamics in our markets.

“We remain as committed as ever to doing business the AO way and continuing to deliver for our customers, our people, our supplier partners and our investors. The strength in our UK business and our investment in mainland Europe have positioned us well for the future, and this will be further strengthened by the capital raising.”

The company has evolved from being a domestic retailer in the UK in 2014 in a single category, to operating in the UK, Germany and the Netherlands today, selling more products from widescreen TVs to fridge freezers, washing machines and fridge freezers.

Jefferies International and Numis Securities have been appointed as joint bookrunners. Rothschild is acting as financial adviser to the company.