AO World trumps expectations with first annual results as a listed company
In its first set of full-year results as a listed company, AO World has reported that revenues jumped 40 per cent to £384.9m over the 12 months.
Analysts Numis this morning called the results “solid”, reiterating its positive outlook and buy recommendation for shares.
Earnings before interest, tax, depreciation and amortisation came in slightly above consensus: at £11.2m (consensus was £10.6m).
The online retailer, which sells all major domestic appliances, has reported an operating loss of £7.2m, but that’s only owing to the £15.4m of exceptional costs relating to its initial public offering.
Shares in Bolton-based AO fell by as much as a quarter from the 285p at which they were initially offered. But the firm’s been working successfully when it comes to growth, and upping its brand awareness, spending out £5m on TV advertising, on the back of its brand change to AO.
What's more, Numis says it’s absolutely confident that: “AO's superior customer proposition underpins a huge growth opportunity, both in the UK and Europe.”
Commenting on today's statement, John Roberts, AO chief executive officer said:
Our UK business continues to build strongly aided by a successful rebranding, introduction of same day delivery and entering the small domestic appliance and television markets.
We are making great strides in preparing for our launch into Germany as the first step to becoming a leading European online electrical retailer.
Investors have been waiting for more news on AO's European expansion, which could see it become the continent's leading white goods retailer. Although there's not a huge amount of information in the release, Numis for one says it's pleased with how both the German business and TV sales are going, with the TV launch happening well ahead of schedule.
The German appliance market is worth £6.6bn. AO says its found premises, hired staff and engaged with suppliers. It intends to start trading this financial year.
The UK’s TV market is worth around £4.2bn a year. AO’s early foray means it entered the market right on cue for this year’s World Cup in Brazil.