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Annual Results

AO.'s revenues

08 June 2016 07:21

Online electrical retailer AO World's total revenue for the period increased by 25.7% to £599.2m (2015: £476.7m) as UK growth continued and the German business gained traction with customers.

AO website sales for the UK were up 27.7% to £487.1m (2015: £381.5m), with total UK revenue up 18.6% to £558.5m (2015: £470.8m); a further gain in market share. Europe revenue for the year was £40.7m/€55.6m (2015: £5.9m/€7.7m).

The group posts an operating loss of £10.6m (2015: £2.2m) as previously guided reflecting investment and trading losses incurred in Germany and start-up costs in other European territories of £2.3m (2015: £4.3m).

Other highlights:

- UK Adjusted EBITDA of £17.2m (2015: £16.5m), with UK Adjusted EBITDA margin of 3.1% (2015: 3.5%) due to investment in marketing to increase brand awareness and investment in overheads to drive further margin growth in the medium term.

- Europe Adjusted EBITDA losses of £21.1m (2015: £8.0m) representing trading losses in our European territories from launch bringing Group Adjusted EBITDA losses to £3.9m (2015: £8.5m EBITDA). The Group was profitable on an Adjusted EBITDA basis in the second half of the year.

Chief executive John Roberts said: "It's been another year of great progress for AO. We have continued on our journey to become the best electrical retailer in Europe, having grown our market share in all our categories and expanded the AO brand into our next country, the Netherlands.

"We are growing the business as fast as we can safely; expanding in our chosen categories and countries, whilst keeping a tight grip on our culture. Improving our brand awareness has been a key focus over the last year and this has increased significantly following successful investment in marketing; helping us attract new customers and improving repeat business metrics. Our customer proposition remains strong - our unbeatable prices, huge range and amazing service mean our customer satisfaction levels remain exceptional and we will continue to focus on this as we broaden into new categories.

"Our launch into computing this year will bring AO's amazing customer service to even more people and you'll see us take a different approach to the traditional 'feature-led' way of selling this category, to the benefit of all customers. Computing is a natural extension of our current categories and there is good potential for cross-selling to our existing customer base, making it an exciting opportunity for the business.

"Online shopping seems now to be widely accepted, driven by technological advances, improving connectivity and cultural generational change. AO offers a simply better customer journey, executed brilliantly by a brand and team that customers and suppliers trust and, as a result, we are well placed to deliver sustainable long-term growth."

The group also announced the appointment of Geoff Cooper as chairman, to succeed Richard Rose, who after eight successful years in the role, will step down at the company's AGM in July.

Cooper will be appointed as a non-executive director of the company with effect from 1 July.

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