By Shanima A
(Reuters) -Britain’s largest online electricals retailer AO World on Friday issued its third profit warning in six months, sending its shares tumbling more than 19%.
The company, which sells laptops, washing machines, mobile phones and printers, cited weaker consumer demand and higher costs and said that near-term revenue and profit could be hit by rising inflation, supply chain problems and belt-tightening by customers.
British retailers are facing a tough backdrop as they grapple with supply chain disruption while households contend with the biggest cost-of-living squeeze since records began in the 1950s.
AO World said it registered higher warranty cancellations in March as customers responded to the escalating cost of living.
For the year to March 31, the Bolton-based company forecast adjusted core earnings of 8 million pounds ($10 million) compared with previously downgraded guidance of 10 million to 20 million pounds in November.
Shares in the company, which have lost 69% of their value in the past 12 months, were down 18.8% at 0750 GMT.
London-listed AO World said liquidity of 50 million pounds at March 31 has since reduced because of rising costs, though that should improve in the second quarter, “driven by a range of actions”, it said without elaborating.
Customer demand in the UK weakened across the sector during the second half of the year, it said, dented by global supply chain disruptions that hit product availability in some categories.
Rival Currys in January trimmed full-year profit guidance by 3%, warning that it was facing uncertain demand and more supply chain disruption in 2022.
AO World, which started reviewing options for its German business in January, said the process is ongoing with a number of possibilities under consideration.
($1 = 0.7987 pounds)
(Reporting by Shanima A in BengaluruEditing by Sherry Jacob-Phillips and David Goodman)
