AO has revised its full-year forecast upward, attributed to a robust increase in profit and sales in the year’s first half.
- The company projects adjusted profit before tax between £39m and £44m, with expected group revenues of £1.13bn.
- AO’s adjusted profit rose by 30% to £17m, while overall revenues increased by 6% reaching £512m.
- Business to consumer (B2C) retail revenues grew by 13%, amounting to £382m in total.
- Post-UK Budget, AO anticipates an additional £12m in direct and indirect costs annually.
AO has adjusted its financial expectations for the year upward, thanks to a notable boost in both sales and profits during the first half. This positivity is reflected in their forecast, projecting an adjusted profit before tax of between £39 million and £44 million, alongside anticipated group revenues reaching £1.13 billion. Investment is anticipated to be around £11 million for capital expenditures.
In the first six months of the fiscal year, ending on September 30, 2024, AO’s financial figures showed a 30% rise in adjusted profit before tax, bringing it to £17 million. This was accompanied by a 6% increase in total revenues, which totalled £512 million. A significant part of this growth can be attributed to the 13% rise in business to consumer retail revenues, which reached £382 million. The operating profit also saw a healthy rise of 11%.
A strategic facet of AO’s growth has been their focus on efficiency and cost management, allowing them to increase profits at a rate faster than revenues. Key operational achievements included expanding the Five Star membership and launching a third-party warehousing solution for small products in April. The acquisition of musicMagpie further consolidated their market position.
John Roberts, AO’s founder and chief executive, expressed satisfaction with the company’s performance, noting the company’s focus beyond its main market, major domestic appliances (MDA). He remarked that the team effectively managed sales despite the unusual summer weather affecting the product mix, thus achieving a “satisfying score draw”. Elaborating on customer service achievements, AO.com surpassed 600,000 Trustpilot reviews with a score of 4.8 out of 5.
The recent UK Budget has implications for AO, with expectations of an additional £4 million in direct costs and £8 million in indirect costs annually. Despite these challenges, AO continues to make strides in enhancing customer value and expanding its service offerings.
AO’s strategic focus and operational efficiency have led to substantial growth, overcoming adversities effectively.
