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Electrical

AO World hit by ‘challenging’ supply chain issues in H1

In the UK market, revenues rose by only 6%, with growth largely impacted by the nationwide shortage of delivery drivers

AO World has warned that growth in the first half of 2021 has been impacted by the ongoing shortage of delivery drivers and supply chain issues affecting markets across the globe. 

The online electrical retailer reported a revenue growth of just 5% for the six months ended 30 September 2021, as it noted that “challenging” market dynamics resulted in lower than expected volumes, consequently affecting operational leverage.

In the UK market, revenues rose by only 6%, with growth largely impacted by the nationwide shortage of delivery drivers.

In light of the “exceptional” operating environment over the past 18 months due to the pandemic, AO said its performance over the comparable period in H120 provides a “more meaningful” overview of performance than a comparison with H121.  

Therefore, on a two-year like-for-like basis, revenues increased by 66%, with its UK business growing 63% overall. 

Looking ahead, the group now expects revenue growth in the second half of the year to record a similar growth rate to the first half of this year, and anticipate that EBITDA for the full-year will be between £35m and £50m.

It added that profits will be more heavily weighted than usual towards the second half of the year, driven by the peak trading period in the run-up to Christmas.

In a statement, the retailer said: “Whilst we continue to see industry-wide issues relating to ongoing supply chain disruption, we have implemented measures to help mitigate these challenges in our logistics operations.  

“Whilst the macro-outlook remains uncertain, we have confidence in the proven resilience of our business model and are well placed to meet customer demand in our peak third quarter sales period.” 

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