AO hails ‘outstanding progress’ as sales and profits soar

No comments

AO.com has reported strong sales and expects profits for the year to be in line with market consensus after capitalising on “the challenges and opportunities” presented by the pandemic.

The pureplay electrical specialist said in a trading update for the financial year ending March 31, 2020, that group sales for the period were up 68% to £1.66bn and it expects full-year profits to be between £63m and £72m.

The retailer’s UK website increased year-on-year revenue by 88% in the fourth quarter, while its German website grew revenues 77%.

AO also reported that its German business had a profitable run rate in the third quarter and is expected to generate profits in the current financial year.

The company said it added over 2 million new customers during the period and customer satisfaction was over 80%.

The group generated £60m of cash over the year, with cash of £66.5m at the year-end, and said it either repaid or did not claim government support during the pandemics that it was entitled to, which did not affect profitability.

Founder and chief executive John Roberts said: “I am delighted to report a year of outstanding financial, operational and strategic progress. The last 12 months have been like no other and we have been very proud to rise to the challenges for our customers – keeping their lives powering on with essential electrical and technology products. Serving customers in the AO way and treating every customer like our own gran, irrespective of cost, has enabled us to impress millions of customers with a better way to shop electricals.

“We were brave and bold in our capacity and infrastructure investments early in the year and now look forward to building on that scale advantage.

“I believe these market dynamics will stick and, whilst there is inevitable uncertainty, the direction of travel is firmly with AO and the business model we have spent more than 20 years building. I expect that we will continue to be a double-digit growth business in the year ahead, even now as we lap the tough comparatives from last year with physical stores open. I look forward to providing more detail with our full-year results in June.

“I would like to thank all AOers for living our values through this year and our trading partners who have been with us shoulder to shoulder as we have shown millions of customers a better way to shop electricals.”

The takeaway and grocery delivery app said group orders in the first quarter of the financial year were up 114% year on year to 71 million and transactions on its platform were up 130% year-on-year to £1.65bn.