1st Jul 2021 11:34
(Alliance News) - AO World PLC on Thursday said revenue for its online business was boosted by Covid-related retail closures, causing profit to soar in its most recent financial year.
The online electrical retailer saw pretax profit shoot up to GBP20.2 million in the financial year that ended March 31 from only GBP600,000 the previous year, on revenue of GBP1.66 billion, up 62% from GBP1.02 billion.
The Bolton, England-based company, which operates electrical goods websites in the UK and Germany, benefited from the accelerated shift towards online retail through successive lockdowns in both countries.
Revenue for the company's UK business rose 59% to GBP1.43 billion in financial 2021, up from GBP901.2 million, boosted by high demand for home appliances, particularly larger fridges and chest freezers. Small domestic appliances and home entertainment goods were popular.
Meanwhile, its smaller German business saw an even steeper rise in revenue, up 81% to GBP226 million from GBP125 million.
Success in financial 2021, allowed AO World to reduce net debt by 71% to GBP28.2 million from GBP99.1 million a year before.
AO World said it was confident that the trend towards online retail will continue, as indicated by its investment in expanded warehousing capacity, vehicles and related employees to meet growing demand.
In the coming financial year, AO World plans to grow its customer base with incremental investment of GBP30 million in marketing and digital content. Plus another GBP30 million of investment to upgrade the company's support systems as a foundation for future growth.
AO World noted: "Our markets remain robust and attractive; however, we are conscious that forecasting the next 18 months will remain difficult. We have started the new financial year well and remain prudently optimistic that we will be able to deliver double digit growth as we lap the strong Covid performance comparatives. The choices we make in future will create incredible long-term value for our shareholders, our people and our partners."
AO World shares were trading up 0.2% at 253.60 pence each in London on Thursday morning.
By Scarlett Butler; [email protected]
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