Shares nosedive as AO World warns full year results will be hit by supply chain issues and driver shortage

Shares at AO world took another tumble as the online retailer warned a nationwide shortage of delivery drivers and the ongoing disruption in the global supply chain will impact its full year results.

The listed retailer of white goods said it now expects full year group revenues to be flat to minus 5% year on year, with group EBITDA in the range of £10m to £20m.

The group said: “As we now look to the second half, we continue to see meaningful supply chain challenges with poor availability in certain categories, particularly in our newer products where we have less scale, experience and leverage.

“In addition, shipping costs, material input prices and consumer price inflation remain challenging uncertainties.

“As a result of these factors, the all-important current peak trading period is significantly softer than we anticipated only eight weeks ago.”

Shares have dropped nearly 25% this morning to 93.30p following its profit forecast.

Over the past year shares have fallen by more than 70%, wiping £200m off the market value as supply chain problems continue to cause disruption.

Updating the market today with its interim results for the six months to 30 September 2021, AO World swung to an operating loss of £11m, down from a profit of £16m.

Revenues were up 6% to £760m compared to the same period last year but it said over a two year period group revenues had grown 67%.

During this period the group said it has recruited 500 new drivers to meet peak period demand, and easing the previously reported shortage of drivers

Five new outbases opened across UK and Germany with over 300,000 sq ft of new warehousing added.

AO World

AO’s founder and CEO John Roberts said: “We’re working hard to solve some of the current challenges that our industry is facing.

“We’ve recruited c.500 new drivers and are working closely with our manufacturer partners so that customers can get what they need.

“Our AOers continue to deliver brilliantly, and our consistently world-class Net Promoter Scores and Trustpilot ratings are evidence of that. I’d like to take this opportunity to thank them for their amazing work, and I’d also like to thank our manufacturers for their ongoing support despite facing their own challenges during the period.

“While the short-term challenges are clear, I remain hugely optimistic about AO’s long-term growth prospects.”