26th Jun 2024 09:20
(Alliance News) - AO World PLC shone during the pandemic, struggled thereafter, but is celebrating a return to form now.
The electricals retailer reported a profit beat. Pretax profit in the year ended March 31 jumped to GBP34.3 million, from GBP7.6 million the year prior. Adjusted pretax profit also amounted to GBP34.3 million, surging from GBP12.0 million, and beating its guidance range of GBP28 million to GBP33 million.
Revenue, meanwhile, fell 8.8% to GBP1.04 billion from GBP1.14 billion. It said the revenue outturn was expected, after it removed "non-core channels and loss-making sales". AO World noted revenue returned to growth in the fourth-quarter, meanwhile.
Looking ahead, it said: "Despite the ongoing macro-economic challenges our objectives remain unchanged and we are confident in our ability to deliver on our ambition for double digit revenue growth in FY25."
It targets adjusted pretax profit of GBP36 million to GBP41 million, at best a 20% rise on-year.
It believes it can be a "double digit revenue growth business in the year ahead".
Profit cautions, tumbling consumer confidence, inflationary pressures, a Germany exit and credit cover worries at suppliers meant post-pandemic life for the company got off to a difficult start.
AO turned to self-help measures. In a set of annual results issued back in 2022, it planned a "period of realignment for the business", focusing on cash a profit generation.
Since then, it has issued a number of guidance lifts, and market confidence in the stock has returned.
Hargreaves Lansdown analyst Susannah Streeter commented: "White goods electrical supplier AO World has seen a spark in sales with annual profit of GBP34 million beating forecasts. It's also maintained its medium-term outlook and says its confident it will see double-digit revenue growth in 2025.
"It's been a volatile ride for the company and its shareholders over the past few years, after lockdowns saw demand surge for electrical goods and then pull back as it became clear that many customers had simply brought forward purchases. It's also been hit by the cost-of-living crisis with shoppers spending more cautiously. It's now back at a more even keel, with more promising growth prospects ahead, helped by its razor -sharp focus on keeping high levels of customer satisfaction, particularly through its one-stop delivery and installation services. It'll be very much reliant on the recovery in UK economic growth and consumer confidence."
AO World shares were 2.5% higher at 115.80 pence each in London on Wednesday morning.
By Eric Cunha, Alliance News news editor
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