21st Nov 2023 10:57
(Alliance News) - AO World PLC on Tuesday reported a first-half revenue decline, but a swing to a profit, with the electricals retailer's "strategic pivot" paying off.
AO World said revenue in the six months to September 30 declined 12% on-year to GBP481.7 million, from GBP546.3 million. However, it swung to a pretax profit of GBP13 million, from a loss of GBP12 million.
"I am very pleased with the clear progress that we are making as a result of our strategic pivot to focusing on profit and cash. We have generated more profit in the first half of this year than we did in the whole of last year," Chief Executive John Roberts said.
Administrative expenses declined 16% year-on-year to GBP98.9 million from GBP118.0 million. AO World's gross margin expanded to 23.5% from 19.5% a year prior.
The company, based in Bolton in the north-west of England, said it removed "unprofitable sales" and introduced charges for all deliveries.
CEO Roberts added: "As we anticipated, sales have reduced year on year as we continue to annualise the actions that we've taken to remove non-core channels and unprofitable sales from the business. However, we expect to end the year having returned to run rate revenue growth.
"Our core fundamentals are in great shape and our service to customers has never been better. Our Trustpilot scores continue to be the best in the market, our spontaneous brand awareness is at record levels, and our transacted customer base now stands at 11.6 million people."
Looking ahead, AO World now expects pretax profit between GBP28 million and GBP33 million, which would be a surge from GBP8 million in financial 2023. AO World had previously predicted an annual profit of GBP28 million. It expects revenue to decline 10% from the GBP1.14 billion achieved in the prior financial year.
Shares in the company traded 3.9% higher at 86.30 pence each in London on Tuesday morning.
By Eric Cunha, Alliance News news editor
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