AO World revenues jump on strong H1 performance, profit hit by German expansion

Half-year revenue jumped 25% at AO World thanks to a strong performance by own-brand website sales.

In the six months to 30 September, the domestic appliances retailer saw overall turnover climb from £173.5m to £217.1m, driven by a 38.6% jump in AO.com sales.

The FTSE 250 group said adjusted earnings before interest, tax, depreciation and amoritsation (EBITDA) more than doubled from £3.4m to £7.3m, giving an adjusted EBITDA margin of 3.4%, up from 2.0% a year earlier.

AO has been focused on expanding internationally, launching ao.de in Germany, where it has been concentrating on the major domestic appliances category as it gathers market knowledge. It has had an "extremely positive" response from customers and said it was now "in a position to accelerate the drive for sales".

John Roberts, AO's chief executive officer, said: "The UK growth was delivered at the same time as management resource was also focused on launching our proposition in Germany, which we achieved in October some six months earlier than promised. This launch has given us confidence in our ability to replicate our model overseas.

"While this accelerated investment has brought forward our associated set-up costs for the period, our focus is on the long-term as we proceed with our strategy to deliver a market-leading proposition in new categories and countries. Although Germany has only been operating a number of weeks, we are delighted with the way our culture has transferred, with the way it's operating and with the way sales are building."

Overall, the group's operating loss dropped 61% from £2.4m to £0.9m, due to the £3.3m set-up costs in German and a share-based payment charge of £1.3m.

Looking ahead, Roberts continued: "Trading for the second half of this financial year has started well. We have recently launched consumer finance in the UK allowing us to reach a wider range of customers and we continue to broaden our service proposition and product range.

"We remain confident of meeting full year expectations and are well positioned as we move into our peak trading period."