AO World swings back to profit thanks to reduced costs while revenue down 17 per cent
AO World swung back into profit on reduced costs and better margins as the firm said it made a 17 per cent loss in revenue in its annual results.
The white goods retailer said revenue decreased by 16.8 per cent to £1.1bn compared to £1.3bn in the same period last year ending 31 March, as the business introduced a “strategic realignment” plan to cut costs.
This included ending a trial of a store-in-store format Tesco and terminating its business in the housebuilder sector.
“While each had good long-term potential, their complexity, short and medium term cash consumption and opportunity cost meant that they were no longer compatible with the pressing priorities of 2023,” the businesses said,
AO World recently had Mike Ashely’s Frasers Group carve out a near-20 per cent stake in the business.
Thanks to the cost cutting initiatives, adjusted EBITDA rose to £45m up from £23m in line with guidance it previously set out.
“The significant improvement in our profit performance speaks for itself and has been achieved by focusing on our core strengths and simplifying our operations, while still delivering the outstanding customer service for which we’re famous,” AO’s founder and chief executive, John Roberts, said.
“Looking ahead, we intend to continue with this focus whilst also retaining the flexibility to drive growth through disciplined investment at the right pace and at the right time.
He added: “Over five million new customers experienced the AO Way over the last three years, during which time we’ve maintained our “excellent”
“Trustpilot rating from more than 400,000 Trustpilot reviews, making AO the most trusted electricals retailer in the UK.”