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Annual Results

AO World revenues up as it continues to gain market share

06 June 2017 07:21

Online electrical retailer AO World's total revenue increased by 17.0% in the year to the end of March to £701.2m with both the UK and Europe businesses growing sales.

AO website sales for the UK were up 14.5% at £557.9m, with total UK revenue up 12.7% to £629.7m as the group made further market share gains.

The group said Europe revenue for the year was £71.5m/€84.7m (2016: £40.7m/€55.6m), up 52.3% in constant currency, as 'The AO Way' gained excellent traction with customer and reflecting a full year of trading in The Netherlands.

AO said that UK profitability improved significantly, contributing to group adjusted EBITDA losses reducing by 46.2% to £2.1m from losses of £3.9m.

UK Adjusted EBITDA was up 41.7% to £24.4m (2016: £17.2m), with UK adjusted EBITDA margin of 3.9% (2016: 3.1%) due to increased sales and improvements in gross margin.

It said the Europe adjusted EBITDA losses increased by 25.5% to £26.5m/€31.5 (2016: £21.1m/€30.4) reflecting losses in The Netherlands over its first full year of trading and further trading losses in Germany as it built scale.

Group operating loss of £12.0m (2016: £10.6m) reflected further trading losses incurred in Germany and The Netherlands with operating profit for the UK up 25.9% to £15.6m (2016: £12.4m) and operating losses for Europe increasing to £27.6m (2016: £23.0m).

Chief executive Steve Caunce said: "It's been another year of great progress for AO with the UK seeing improved profitability and we have continued to build a solid platform for future growth.

"In Europe, we opened our new regional distribution centre in Bergheim which will enable us to scale our European operations profitably in the years to come and have improved our gross margin, building on our relationship with suppliers.

"We have built a state-of the art recycling facility in the UK, we have added new categories to our offering in both the UK and Europe and, in launching computing, we have developed systems and infrastructure to operate a different distribution model, which we can leverage for future category roll-out across territories. "Our customer service metrics remain exceptional across all of the countries in which we operate because we make it our mission to care more and we continue to innovate to create the best customer experience for tomorrow.

"This has helped us to continue to gain market share in our categories and countries, notwithstanding the challenging trading environment in the UK."

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