By Sarah Young
LONDON (Reuters) -AO World said it was confident on delivering profit and sales growth in the current financial year, as the British online electricals retailer benefits from customer loyalty and booming demand for tumble driers and TVs.
The company, founded in 2000 by CEO John Roberts after a bet with a friend, forecast adjusted pretax profit for the year to the end of March up at least 6% to between 36 million pounds to 41 million pounds ($45.58-$51.91 million), on revenue which will show double digit growth.
At AO, sales growth this year has been driven by strong demand for tumble driers after a long period of particularly wet weather in Britain, and most recently from the Euro soccer tournament, which has pushed up TV sales in June by 54%.
Roberts told Reuters on Wednesday that he was confident on delivering sales growth despite macro-economic challenges.
“It’s more new customers and more repeat customers. We’re at record levels of repeat business,” Roberts told Reuters on Wednesday.
Several British retailers reported that discretionary spending was under pressure earlier this year, however average wages are now rising faster than inflation and consumer sentiment has recovered to its highest since November 2021.
Shares traded up 2.5% to 116 pence in morning deals, and have risen 25% since the beginning of the year, but remain well down on a high of 433 pence reached in January 2021 as consumers spent on products during pandemic lockdowns.
AO, which has a 15% market share of the domestic appliance market in the UK, exited the German market in 2022 and has over the last year cut costs, removed lower value products from its range and introduced delivery charges as part of a plan to improve profitability.
That helped it post adjusted pretax profit of 34 million pounds in its last financial year, beating guidance for it to come in at the top end of a 28-33 million pound range.
($1 = 0.7885 pounds)
($1 = 0.7898 pounds)
(Reporting by Sarah Young; Editing by Kate Holton and Louise Heavens)
