Electrical retailer AO World has reported robust double-digit growth in both retail revenue and operating profit, attributing its success to a "laser focus" on cost and efficiency.
The company's business-to-consumer retail revenue surged by 13% year-on-year in the six months ending 30 September, climbing from £339m to £382m, as disclosed to the markets this morning, as reported by .
AO World's operating profit saw an 11% increase year-on-year to £16m, while its adjusted profit before tax soared by 30%, rising from £13m to £17m.
Following these positive results, AO World has revised its expected profit before tax for the year to fall between £39m and £44m, with anticipated group revenue ranging from £1.09bn to £1.13bn.
Retail customer sales are projected to rise by 10% for the year overall.
The Bolton-based company also experienced an 18% hike in basic earnings per share, which went up from 1.64p to 1.94p. AO credits its impressive margin growth of 24.4% to efficiency savings, which have reportedly more than compensated for inflationary pressures and the impact of reduced basket value in the retail business due to lower market product pricing.
John Roberts, AO World’s chief executive, expressed his satisfaction with the company's performance: "I’m delighted to report another successful six months for AO. We’ve had a Morecambe and Wise summer sales period; all the right volumes just not in the right categories. The wet summer weather meant we sold fewer fridges and air conditioning units and more tumble driers than we had planned. Overall, our team did a fantastic job to play this out as a satisfying score draw."
"We also made good progress beyond our core MDA [major domestic appliance] category, and I’m very encouraged with how our customers and members are responding to our improved range and value proposition in newer categories."
"Our laser focus on costs and efficiency remains which ensures, as planned, that profit grew faster than sales on the growth we’ve delivered. We’re now well into peak trading with customers responding positively to the thousands of unbeatable deals we’re offering for the Black Friday period".
AO World is poised to acquire London-listed online retailer Musicmagpie in a £10m deal, which AO claims will "augment our capability and value capture in the mobile and consumer technology categories as well as improve our ESG credentials."
The acquisition remains subject to certain conditions, including court approval, with a hearing scheduled for 10 December 2024.
