5th Jun 2014 08:11
LONDON (Alliance News) - Online domestic appliance retailer AO World PLC Thursday said it swung to a loss in its recent financial year, on the back of costs associated with its recent stock market flotation in London, even as revenues surged on strong volume growth in domestic appliances.
The group, which is set to join the FTSE 250 index on June 23, said the current financial year has started well, and trading has been in line with its expectations, while its plans to broaden its product range in the UK are being implemented ahead of schedule, and its European strategy is progressing well.
"Our UK business continues to build strongly, aided by a successful rebranding, introduction of same-day delivery, and entering the small domestic appliance and television markets," said Chief Executive John Roberts in a statement.
"We are making great strides in preparing for our launch into Germany as the first step to becoming a leading European online electrical retailer."
AO World said it swung to a pretax loss of GBP7.6 million in the year ended March 31, from a pretax profit of GBP8.1 million a year earlier.
It also said that profit margins were hit by higher marketing and advertising expenses as a result of re-branding and of television advertising campaigns.
The group said it booked GBP15.4 million in exceptional costs relating to its recent IPO earlier this year.
Revenue for the year was up 40% to GBP384.9 million from GBP274.9 million a year earlier, driven by increased order volumes at slightly higher average order values to the previous year.
Revenue growth in the year was primarily from the AO branded website, which now accounts for around 75% of group revenues, with sales growth of 45%. Third-party website sales and third-party logistics services also reported strong growth, up 29% and 17%, respectively.
AO started out selling domestic appliances, so-called "white goods", including washing machines, dishwashers and refrigerators, but said it has now moved into the television and audio-video market. It announced last month that it had launched the new products on its website ahead of the upcoming football World Cup, in the hope of customers upgrading their TV packages for larger screens in high-definition quality to watch the football.
During the year the group said its spend GBP7.5 million on capital expenditure, compared with only GBP3.3 million the prior year, some of which it said it spent on its new headquarters in Bolton.
AO World shares were down 2.4% at 255.00 pence Thursday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Ao World