AO.com shrinks losses and smart home drives sales

The electricals etailer reported reduced EBITDA losses of £5.4m from £6.3m the previous year in the six months to September 30, bolstered by a 10% increase in total revenue to £404.2m.

The retailer’s UK division delivered a 4.2% sales uplift to £294.3m driven by its newer categories including smart home devices, gaming consoles and mobile phones and cameras. The etailer said its sale of major domestic appliances in the UK was particularly challenging due to a wider market slowdown.

AO.com, which acquired online phone retailer Mobile Phones Direct for £32.5m earlier this month, delivered a 35% increase in revenue across its German division to €78.4m (£69.4m). However, the retailer said sales were constrained by changes to its delivery driver operating model.

The retailer’s customer numbers surpassed five million in the UK during the period, with nearly six million customers overall.

Chief executive Steve Caunce said: “This has been a half of continued delivery against our long-term strategy, thanks to a strong offer for customers.

“While our core UK and Germany major domestic appliance markets have been challenging, with the UK major domestic appliance market becoming tougher than expected, we take encouragement that we are at least maintaining market share in this core category in the UK and growing significantly in Germany.

“Elsewhere, our continued focus on growing our range of online electricals and adding new complementary ranges proved successful in the first six months of the year, with newer categories such as audio visual and computing performing particularly well.

“Similarly, we are excited about further strengthening our customer offer through the acquisition of the UK’s leading online-only mobile phone retailer, Mobile Phones Direct.

“Our peak trading period began on 9 November with the launch of our biggest-ever Black Friday and I remain confident of achieving long-term sustainable growth across the group. We expect full-year results to fall within the range of board expectations, albeit more second half weighted than previously anticipated.”