Profit jumps at electrical retailer AO World
Profit has risen more than twice as fast as sales and far outstripped revenue growth at online electrical retailer AO World.
The company told markets this morning that it expects retail revenue to increase by around 12 per cent in the 12 months to March 31.
It expects like-for-like revenue to increase by around seven per cent year on year to £1.1bn, reflecting “reductions in B2B and mobile as we focus on profitable growth”, AO said.
“AO is back to being a highly efficient growth machine; we are reaping the rewards from the execution of our strategy and 25 years of unwavering obsession with amazing customer service,” CEO John Roberts said.
“We’re carrying good momentum into the new financial year and are pleased to be guiding to another year of double-digit revenue growth in our B2C Retail business, and for profits to keep growing faster than sales.”
“Our strong performance shows that our model is working,” Roberts said.
“We’re cementing our position as the most trusted electrical retailer and are increasing our frequency and share of wallet with customers.”
It expects the post-acquisition performance of Musicmagpie to contribute around £30m of revenue and a “negligible loss” to the full-year results.
As well as it trading update, AO announced the appointment of Mark Higgins to Chief Operating Officer, in addition to his existing role of Chief Financial Officer.
The move reflects “the way Mark and John have been running the business together for some time”, the company said.
AO World expects to publish its full-year on June 18.