AO.com back in the black as Covid drives soaring sales and profits

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Pureplay electricals specialist AO.com has reported a return to operating profit driven by a surge in sales and EBITDA.

In its final results for the financial year ending March 31, 2021, AO.com reported a 62% increase in group revenues to £1.6bn, with UK sales soaring 59% to top £1bn for the period.

The brand’s once struggling international business also performed strongly with German sales jumping 81% to £226m.

The retailer also reported a group operating profit of £30m, recovering from a £4m loss for the same period last year.

Group-adjusted EBITDA soared to £64m from £22m the previous year, while profit before tax jumped to £20m – up from just £1m for the same period last year.

AO.com said that in the UK consumer demand for major domestic appliances – such as larger fridges, chest freezers and other home appliances – jumped 61%, while demand for smaller appliances, home entertainment and gaming all soared.

The retailer said it added more than 2 million new AO.com customers during the period and created more than 1,200 new roles across the business.

AO founder and chief executive John Roberts said: “It’s been a step-change year for AO in which we’ve achieved significant strategic, operational and financial progress. The early and bold investments we made in capacity, infrastructure and people returned increased revenues by 62% and grew adjusted EBITDA by 191% across the group.

“Most importantly, we rose to the challenge for the people who matter most, our customers, and we relished the opportunity to impress 2 million more of them in the period.

“Delivering brilliantly for customers is at the heart of our mission to become the global destination for electricals. We firmly believe that once people experience a better way to buy electricals, they are unlikely to return to old ways of shopping.

“Our vertically integrated business model offers substantial operational leverage, which means all incremental growth feeds our flywheel, generating cash to invest back into our business for customers.

“Coming out of the pandemic, the direction of travel is firmly with AO, and our proven ability to build scale and drive growth gives us confidence to look towards further European expansion over the next five years. We’ll continue to make choices that create long-term value for our share-owners, as well as make our mums proud.

“I would like to thank all our AOers for living the AO Way during the year and our trading partners, who shared our desire to use these testing times as a chance to deepen relationships.”