AO World backs FY expectations as H1 profit, revenue rise

(Sharecast News) - AO World backed its full-year expectations on Thursday as the online electricals retailer reported a rise in first-half profit and revenue. In a pre-close trading statement for the period from 1 April to 30 September, the company said year-on-year revenue is expected to be up 5.5%, while pre-tax profit is set to be more than 20% higher at around £21.5m.

"This reflects the underlying strength of the business, with operational improvements in our Mobile and musicMagpie businesses," it said. "Whilst this performance represents a strong first half of the year, our full year profit expectations remain unchanged, reflecting both planned strategic investments, including our ERP programme, and a more challenging comparative environment in the second half."

AO expects to end the period with more than £200m of liquidity headroom after the £10m dividend paid in June and the completion of half of the ongoing £10m share buyback programme. "This underlines the strength of our cash generation and our commitment to disciplined capital allocation," it said.

The company also said it has completed its acquisition of photography retailer Jessops from Peter Jones.

Founder and chief executive John Roberts said: "We've carried our momentum into the new financial year with continued growth against a sluggish backdrop in the wider UK retail sector."

Roberts said AO is "firmly" on its path to over 5% pre-tax profit margin as its next milestone and has "clear growth and efficiency initiatives to make that happen".

He added: "There continues to be a lot of uncertainty in the world but we look forward to heading into peak trading with confidence and momentum behind us."

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