AO upgrades profit guidance as it continues to deliver ‘profit and cash generation’

In the six months to September 30, AO recorded profit before tax of £13m compared to a loss of £12m in the same period last year, which the group said was helped by “removing unprofitable sales” and introducing delivery charges on all deliveries.

Adjusted EBITDA increased to £27m up from £9m last year, but revenue decreased 12% to £482m which the group said was “expected” as it annualises “the actions taken to remove non-core channels and unprofitable sales, and increase gross margins”.

Product revenue decreased 14.4% to £370.3m while service revenue rose 30.5% to £30.4m.

After posting a profit, AO has upgraded its profit before tax guidance for FY24 to be between £28-33m, up from the £28m forecast in July.

AO founder and chief executive John Roberts said:  “I am very pleased with the clear progress that we are making as a result of our strategic pivot to focusing on profit and cash. We have generated more profit in the first half of this year than we did in the whole of last year, and are also upgrading our profit expectations for the remainder of FY24.   

“As we anticipated, sales have reduced year on year as we continue to annualise the actions that we’ve taken to remove non-core channels and unprofitable sales from the business. However, we expect to end the year having returned to run rate revenue growth.  

“Our core fundamentals are in great shape and our service to customers has never been better. Our Trustpilot scores continue to be the best in the market, our spontaneous brand awareness is at record levels, and our transacted customer base now stands at 11.6 million people.

“As ever, I’m grateful to our manufacturer partners for their continued support and of course to the fantastic AO team who continue to be magical in the moments that matter for customers while maintaining the discipline and focus needed to deliver our plan.

“We look forward with cautious optimism, given the macro challenges, as we turn our attention back to delivering profitable revenue growth to drive our operational gearing.”