AO World swings to profit as revenues grow

Online electrical goods retailer AO World said it swung to a pre-tax profit in the first half as revenues in the UK and Europe grew.

In the six months to the end of September, the company swung to a pre-tax profit of £2.3m from a loss of £8m the year before, as revenue rose to £324.7m from £264.3m in the same period a year ago.

Group adjusted earnings before interest, taxes, depreciation and amortisation came in at £1.5m compared to a £4.5m loss the year before.

Website sales in the UK were up 21% to £259.4m, with total UK revenue up 19% to £295.1m.

In Europe, revenue increased 67% to €36.2m.

Chief executive officer John Roberts said: “AO has made a great start to the year, with Group revenue and profits growing well as we continue to deliver on our long-term strategy. We have made progress in our mission to become the best electrical retailer in Europe, cementing our operations in Europe with the opening of our distribution centre in Germany and launching new categories for customers in both the UK and Europe."

The company said the weakening of the pound was likely to create some pricing pressure, but its strong first half performance sets it up well for the rest of the year.

AO maintained its full-year group guidance for revenue of £700.3m to £735.9m and group adjusted EBITDA of £2.4m losses to £4.7m.

At 0900 GMT, AO World shares were down 2.3% to 164.10p.