AO World issues profit warning
Online appliance retailer AO World has warned that its full year results are likely to be below market expectations after the company experienced tougher than expected trading conditions.
AO, which made its debut on the London Stock Exchange last year, said it had difficulty in achieving the expected sales growth in the fourth quarter of its financial year which had negatively affected adjusted EBITDA.
It added: “It is now apparent that some of the revenue growth in the second half of FY14 and going into FY15 was due to the extra publicity surrounding the company at that time. This impacted the year-on-year growth rate.”
The company explained that at the time of its third quarter trading statement, it expected to meet the market's expectations for both revenue and adjusted EBITDA in the UK, even taking into account the loss of a logistics contract, the cost impact of driver legislation changes and the adverse effects of Black Friday, which did not produce incremental sales, but condensed sales into a shorter time period.
AO now expects revenue and adjusted EBITDA for it UK operations to be around £470 million to £475 million and circa £16.5 million, respectively.
AO chief executive John Roberts said: "While we are disappointed that sales and profits are going to come in slightly below expectations, we remain committed to our market-leading, customer-focused business model.
“Having delivered on all our strategic objectives through this financial year, we are confident of our ability to continue to deliver for our customers and to further drive the success of AO in the interest of all stakeholders."
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