AO World losses widen as European march continues
Bolton-based online domestic appliances company AO World has seen its operating losses widen to £12m, as it continues to invest in establishing a foothold in Europe.
Turnover increased 17% to £701.2m (2016: £599.2m) for the year to the end of March 2017, with both the UK and Europe businesses growing sales. UK sales accounted for £629.7m – up 12% on last year, while revenue from Europe increased 53% to £71.5m.
AO World’s operating loss widened to £12m (2016: £10.6m), which the group said reflected further trading losses incurred in Germany and The Netherlands.
While UK adjusted EBITDA was up 41.7% to £24.4m (2016: £17.2m), Europe’s adjusted EBITDA losses increased by 25.5% to £26.5m.
In February, company founder John Roberts stepped aside as chief executive to allow its chief operating officer Steve Caunce to take over the role.
Roberts, 43, who set up the business in 2000 and retains a 26% stake, has a new role as founder and executive director with a focus on innovation and inspiring AO’s staff.
AO World remained upbeat in its results announcement to the stock market, saying that it continues to grow market share in all categories across all countries.
However, looking ahead it said that the challenging trading environment it had seen in the UK in the second half of last year has continued into the start of the new financial year, although trading in Europe had started well.
Chief executive Steve Caunce said: “It’s been another year of great progress for AO with the UK seeing improved profitability and we have continued to build a solid platform for future growth.
“In Europe, we opened our new regional distribution centre in Bergheim which will enable us to scale our European operations profitably in the years to come and have improved our gross margin, building on our relationship with suppliers.
“We have built a state-of the art recycling facility in the UK, we have added new categories to our offering in both the UK and Europe and, in launching computing, we have developed systems and infrastructure to operate a different distribution model, which we can leverage for future category roll-out across territories.”
In March the group raised £50m through its first fundraising since its 2014 initial pubic offering.