AO World sees FY results in line with market views

Online electrical retailer AO World said on Tuesday that it had grown market share during the coronavirus lockdown, with full-year results set to meet market expectations.

AO said that for the year to the end of March 2020, excluding operations in the Netherlands, revenue and adjusted earnings before interest, tax, depreciation and amortisation pre IFRS16 will fall be within the range of analyst expectations, which are for revenue of £1.02bn to £1.09bn and EBITDA of £5m to £11.6m.

"Historically, a large proportion of sales of electricals have been made through bricks and mortar stores," the company said. "With the implementation of lockdown measures, overnight 100% of the market moved online. As we move towards a new normal, we would expect the online market in electricals to maintain a higher share than prior to Covid-19.

"Despite a decline in the overall market of the categories in which we operate, AO has grown market share and seen increased demand and sales across all categories since the lockdown measures came into force."

AO also said that its £60m revolving credit facility and £20m term loan, which were due to run until June 2021, have been consolidated into a new £80m RCF maturing in April 2023.

At 0905 BST, the shares were down 1.4% at 84.40p.

Independent retail analyst Nick Bubb said: "Astonishingly, this is the first comment that AO.com has given on the impact of the pandemic and it doesn’t exactly give much detail, apart from confirming that the y/e March results will be in line with expectations and that it has grown market share recently."

Broker Shore Capital said the update was "reassuring" and highlights that the company, as a pure-play electrical retailer, has benefited from the closure of electrical stores in its home markets of the UK and Germany.

It also noted AO’s "substantial" liquidity.