AO’s losses widen as cost-of-living crisis impacts sales
Online appliance retailer AO has seen its losses widen after the cost-of-living crisis led to reduced consumer demand in the electricals market.
In the six months to 30 September, AO’s revenue declined to £546 million from £661 million at the same time last year while its loss increased to £12 million from £4 million.
In a bid to cut costs, AO has closed its loss-making German operations and simplified its UK business by focusing on more profitable lines that fit its core model.
AO’s founder and chief executive John Roberts said: “During the first six months of the year, we‘ve made good progress with our strategic realignment as we focus on profitability and cash generation, all of which is yielding the results we expected.
“We‘ve now closed the loss making and cash consumptive parts of our operations meaning the remaining UK business is cash generative and are successfully closing our German business with a minimal cash impact to the wider group.
“I‘m pleased with this progress, particularly against the backdrop of an extraordinarily difficult macro-economic climate.”
Looking ahead, the company said the cash generation and profitability strategy set out in its full year results remains on track but warned that it expects the impact of a slowdown in consumer spending and ongoing supply chain issues to continue.
Roberts said: “Over the last 22 years, the team has built and nurtured trusted relationships with some of the world’s leading electrical manufacturers and I’m also grateful to them for their continued support.
While the short-term outlook remains challenging, I‘m confident that our strategy is the right one, and as we position ourselves to be the UK‘s most trusted electrical retailer we look to the future with cautious optimism.“
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