AO World FY earnings to meet consensus as revenues surge

Online electricals retailer AO World said on Thursday that full-year adjusted earnings are set to be in line with market expectations despite Covid-related costs, as revenues surged.

In an update on trading for the year to the end of March 2021, the company said group revenues rose 62% to £1.66bn, with momentum continuing in the fourth quarter. Revenues for its UK website rose 88% on the year in the fourth quarter, while its German website saw full-year revenues jump 77%.

The company said it delivered a "strong" performance across all aspects of the business in what it called "a year of outstanding financial and operational progress".

During the year, AO added more than 2m new customers and generated £60m of cash, with cash of £66.5m at the year-end versus £6.9m the year before.

As a result, group adjusted earnings before interest, tax, depreciation and amortisation are set to be in line with market consensus of around £66m at between £63m and £72m, up from £19.6m the year before.

Founder and chief executive John Roberts said: "We were brave and bold in our capacity and infrastructure investments early in the year and now look forward to building on that scale advantage.

"I believe that these market dynamics will stick and, whilst there is inevitable uncertainty, the direction of travel is firmly with AO and the business model we have spent more than 20 years building. I expect that we will continue to be a double-digit growth business in the year ahead, even now as we lap the tough comparatives from last year with physical stores open. I look forward to providing more detail at our full year results in June."