AO World posts full year revenue drop
AO World saw its revenue decline by 6% to £1.56 billion in the 12 months to 31 March against strong prior year comparatives when the company was boosted by more people buying online during the Covid-19 pandemic
On a two-year basis, group revenues increased by 52%.
During the year, the electrical appliance retailer attracted 1.5 million new customers and saw an uplift in post-Covid repeat purchase rates.
It said UK revenues were resilient in the first half of the period, despite the constraints of driver challenges and ongoing supply chain issues. However, customer demand progressively weakened in the second half which meant that revenues were down 5% year-on-year, but up 52% on a two-year basis.
In Germany, revenue was constrained by post-Covid shifts in consumer behaviour and an increase in online competition as customers returned to stores more than expected. AO’s revenues in the country declined by 12% year-on-year, but grew by 54% on pre-Covid levels two years ago.
AO said group adjusted EBITDA is expected to be around £8 million for the year. The company said it was informed in March of higher warranty cancellations than in previous years as customers responded to the rising cost of living.
AO added: “While the picture has subsequently improved, data received subsequent to this trading update and prior to the full year results announcement scheduled for later this summer could result in a reassessment of the carrying value of the contract asset, which could lead to a material impact on FY22 profits.”
The company is remaining cautious on its revenue and profit outlook in the near term due to volatile market conditions, cost pressures, supply chain issues and the rising cost of living. As a result, it will be focusing on cash generation and optimising its cost base in the coming year.
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