AO World ups guidance as profits hit £13m

AO World has upped its profit guidance after it posted profit before tax of £13m, up from a loss of £12m, for the six months ended 30 September.

As a result the company now expects to end the financial year with a profit before tax of between £28m and £33m.

Alongside this the company posted an EBITDA of £27m up from £9m in the same period last year.

Despite this, the group’s revenue actually dropped from £546m last year to £482m this year.

AO stated that it managed this by removing unprofitable sales and adding delivery fees to all deliveries.

Alongside this, its warehousing costs fell to £25.5m compared with £31.3m last year, which is equivalent to 5.3% of sales, down from 5.7% last year.

The company’s other admin costs have decreased by £9.4m to £56m as it held tight control over its ongoing spend.

John Roberts, founder and chief executive, said: “I am very pleased with the clear progress that we are making as a result of our strategic pivot to focusing on profit and cash. We have generated more profit in the first half of this year than we did in the whole of last year, and are also upgrading our profit expectations for the remainder of FY24.

“As we anticipated, sales have reduced year on year as we continue to annualise the actions that we’ve taken to remove non-core channels and unprofitable sales from the business. However, we expect to end the year having returned to run rate revenue growth.”

He added: “Our core fundamentals are in great shape and our service to customers has never been better. Our Trustpilot scores continue to be the best in the market, our spontaneous brand awareness is at record levels, and our transacted customer base now stands at 11.6m people.

“As ever, I’m grateful to our manufacturer partners for their continued support and of course to the fantastic AO team who continue to be magical in the moments that matter for customers while maintaining the discipline and focus needed to deliver our plan.”