AO World revenue climbs, remains cautious about economic outlook

AO World’s third quarter revenue climbed but the European online electrical retailer remained cautious about the final quarter given the uncertain economic outlook in the UK.

For the quarter ended 31 December, revenue surged 12.3% year-on-year as it expects its full year results to fall within expectations, but is cautious about the final quarter due to the uncertain UK economic outlook, currency impacts on supplier pricing and the possible effect on consumer demand.

The company expects full year revenue to be between £700.3m-£735.9m with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £2.4m and losses of £4.7m.

Meanwhile, revenue from ao.com increased by 10.3% year-on-year and overall UK revenue rose 8.9%, against “tough comparators” from the same period last year.

In Europe revenue surged 28.4% year-on-year on a constant currency basis, as the company built its logistics capabilities and capacity for the business.

Chief executive John Roberts, said: "AO continues to make progress on its long term plan, delivering sales growth across all categories and territories, and convincing more customers to experience the AO Way.

"We performed well over our peak period, particularly through Black Friday.”

During the period the company launched computing in the UK, and audio-visual in Germany, and Roberts said that “early trading in computing has been encouraging and sales are building” as AO World invests in attracting traffic to the category on ao.com, while both the businesses in Europe continue to gain traction.

He added: “We have three months left of the current financial year and are mindful of the uncertain economic outlook. However, we remain confident that our market leading proposition will continue to drive customers to experience the AO Way and enter the New Year excited by the opportunities ahead."

Shares in AO World fell 6.46% to 172.40p at 0833 GMT.