AO World surges as Ruane, Cunniff & Goldfarb takes 5% stake

Shares in AO World surged on Monday after the online electrical appliance retailer said fund manager Ruane, Cunniff & Goldfarb has taken a 5% stake in the business.

The investment firm, which runs the Sequoia Fund, took a 5.4% interest in AO last week. Late last month, AO World said it swung to an interim loss, despite posting a sharp increase in first half revenue.

In the six months to 30 September, the FTSE 250 group reported a £8.9m operating loss compared with a profit of £0.9m in the corresponding period last year, while revenue rose 21.7% year-on-year to £264.3m.

The increase in revenue was driven by a strong performance in the group’s UK division, which saw revenue grow 14.5% year-on-year, compared with the 6.5% growth it reported in the three months to 30 June.

At 1010 GMT, AO World shares were up 7.2% at 174.60p.