AO World revenues rise 57% after strong second quarter
Online electrical retailer AO World said it expected half-year revenue to rise by more than half driven by strong demand in the UK and Germany.
The company said it expected group revenue to rise by 57% year on year for the six months to September 30. UK revenue increased by 54% and German sales rose 83% on a constant currency basis.
Sales momentum in the second quarter continued from the previous three months despite the reopening of competitor bricks and mortar stores, as customers preferred to buy goods online even after the easing of Covid-19 restrictions.
“We believe we have seen a lasting step change in online penetration,” AO World said on Thursday.
However, the company noted a "change in the behaviour" in some of its mobile phone customers with gross margins hit by increased cashback redemption rates and cancellation of contracts with networks.
"We have changed the mix of our customer proposition to minimise this risk in future,” it added.
It added that the loss-making German business also continued to perform strongly which reflected the result of the changes made over the last 18 months as well as the impact of Covid-19 on demand for online shopping.
“We are confident that this business will achieve profitability on an adjusted EBITDA monthly basis as we trade through our peak period and will be profitable in full-year 2022 and thereafter.”
"The last six months of trading have been like no other during my two decades in the business. AO was in good shape coming into this financial year and the global, structural shift in customer behaviour to online, accelerated by Covid, emphasised our strengths,” said AO founder and chief executive John Roberts.
"Whilst we remain mindful of the uncertain economic climate caused by the pandemic and Brexit, we are on track with plans and well set for our biggest ever peak trading period in the UK and Germany."