AO Posts Record Profits; Announces Special Dividend

• Revenue growth of 11.4%, with adjusted PBT up 16.1% to a record £50.5m
• Proposed £20m shareholder return via dividend and share buyback

AO World plc ("AO" or "the Group"), the UK's most trusted electrical retailer, today announces its audited financial results for the financial year ended 31 March 2026 ("FY26"). 

Financial highlights 

• Total revenue (including the full year impact of musicMagpie) grew 11.4%, to £1.267bn. Revenue in our core B2C Retail business grew 9.5% to £911m, underpinned by market share⁶ gains across all key categories in which we operate.
  
  
• As planned, adjusted PBT grew faster than revenue - up 16.1% to a record £50.5m - with adjusted PBT margin of c.4%, making good progress towards our medium-term target of 5%.
  
  
• £201.3m of total liquidity at the period end. Profit converting to cash with free cash flow of £66.4m (2025: £26.3m) driven by strong operating performance and efficient working capital management.
  
  
• Ended the year with net funds of £16.4m after funding the EBT with £4.2m to purchase shares to satisfy share schemes and funding the £10m share buyback programme which completed in March 2026.
  
  
• In line with our disciplined capital allocation framework and reflecting our strong cash generation in FY26, we intend to return a further £20m to shareholders via a special dividend of £10m and a new share buyback programme of £10m, expected to commence following circulation of our FY26 annual report and accounts to shareholders. 

Operational highlights

• The first retailer globally to exceed 1 million Trustpilot⁸ reviews with a 4.9 out of 5 rating, further cementing AO's position as the UK's most trusted electrical retailer.
  
  
• Continued investment in our AO membership proposition, with our guarantee that 'members always pay less'. All metrics across renewal rates, member spend and share of wallet improved in the period.
  
  
• Attracted over 720,000 new customers⁷ during the year, which is fuel for our flywheel in the future.
  
  
• Switch24 launched a first-to-market proposition on the latest Apple handsets exclusively for AO members; an iPhone 17 from only £17 a month, upgraded every two years to the latest model.
  
  
• Launched AO Mobile post year end, starting with friendly user trials, which will be expanded in further phases, with full launch expected within the first quarter of FY27. We look forward to combining this with our Switch24 product and expect the proposition to reflect customer demand for simple, low monthly pricing, providing access to the latest iPhone alongside a SIM-only plan.
  
  
• Successfully executed our offshoring programme, delivering a lower cost base and greater operational flexibility without compromising service standards.
  
  
• The post-pay mobile business is now profitable with improved commercial terms agreed in principle with the networks.
  
  
• Continued progress in recommerce and recycling, strengthening our circular economy proposition through musicMagpie and our in-house recycling capabilities, supporting both customer value and long-term sustainability.  musicMagpie is now run rate profitable on an annualised basis, benefiting from operational restructuring and improved sourcing through the launch of a successful collaboration with Timpson.
  
  
• Ongoing investment in automation, data and AI, supporting efficiency and cost discipline.
  
  
• Strong culture and engagement, with an Employee Engagement score of 80.

Outlook and FY27 Priorities

Looking ahead, the external environment remains uncertain, with ongoing geopolitical volatility and continued inflationary pressures impacting both consumers and input costs across the economy. Notwithstanding these challenges, the strength of our value proposition, the non-discretionary element of much of our product range, our disciplined cost management and our continued investment in technology give us confidence in our ability to deliver FY27 PBT in line with current market expectations⁹. We remain confident in achieving our medium-term objective to deliver a 5% PBT margin.

Shareholder Returns

In line with our disciplined capital allocation framework, and reflecting our strong cash generation, we intend to return a further £20m to shareholders via a special dividend of £10m and a new share buyback of £10m expected to commence following circulation of our FY26 annual report and accounts to shareholders. 

AO's Founder and Chief Executive, John Roberts, said: 

"These results represent an incredible team effort with revenue up 11% to £1.27 billion, profit up 16% to a record £50.5 million, and the strongest balance sheet in our history. And all delivered against a backdrop of rising costs.

"We've also become the first retailer in the world to exceed one million Trustpilot reviews at an overall rating of 4.9 out of 5. In a category as demanding as ours, that trust is hard-won and almost impossible to copy. It sits nowhere on our balance sheet, yet it's among the most valuable things we own.

"AO Membership continues to go from strength to strength and there's more to come with the launch of Switch24 and AO Mobile, which combined, are the best way to get the latest iPhone paired with an all-you-can-eat SIM at a market-leading price. It's scaled economies shared and is exactly what our members want at a time when every pound counts.

"We've also announced today our intention to return a further £20 million to our shareholders, which is a reflection of the cash this business now generates and the discipline with which we allocate it.

"None of this is the work of one person. It's down to every AOer and every partner who shares our obsession with looking after customers. I started AO 26 years ago with a small team and a big idea and I'm as excited about the next 26 as I've ever been."

FY26 was a standout year for AO. We achieved sales of £1.27 billion and delivered record profit before tax of £50.5 million, reflecting our structural cost advantage, the resilience and attractiveness of our model, the benefits of our scale and our ability to adapt quickly as conditions change.

Strategic Review

Our balance sheet has never been stronger, supported by continued strong cash generation and providing significant flexibility for future investment. 

Our strategy is clear: to create sustainable value by being the most trusted electrical retailer, built on brilliant retail basics, a structurally low cost model and a scaled economies shared approach that aligns the interests of customers and shareholders. 

Our continued focus on delivering an exceptional customer experience and value proposition alongside disciplined financial management has driven market share growth across all categories, strengthening our position in an uncertain external environment. AO is now the first retailer globally to exceed one million Trustpilot reviews with a 4.9 out of 5 rating, reflecting our deeply ingrained obsession with customer service delivered every day.

Central to this is our scaled economies shared model. We create value through structural cost advantages and obsessing about world-class service quality; in return customers give us a greater share of their electricals spend, further driving growth and operational gearing.

Our AO membership proposition continues to deepen engagement, drive loyalty and reinforce trust, and remains central to our successful customer engagement strategy, with all key metrics improving and supporting increasing customer engagement and long-term value creation. Through propositions such as AO Mobile and Switch24, our membership model drives "sticky" customer behaviour by increasing transaction frequency, familiarity and loyalty, encouraging customers to give us a greater share of their electricals spend over time. 

As a result of the acquisition and integration of musicMagpie, we have continued to develop our ecosystem, strengthening the link between retail, trade-in and second-life channels. Our recommerce business is now profitable on an annualised basis and is enhancing our customer proposition while supporting sustainability and affordability. 

Our culture continues to thrive, with engaged employees delivering exceptional customer service, reflected in an Employee Engagement score of 80. 

While the external environment remains uncertain, including geopolitical volatility, cost inflation, shifts in consumer demand and rapid technological change, we remain confident in our ability to grow revenue, improve profitability and generate cash, supported by disciplined cost management and continued investment in technology, automation and our operating model.

Financial performance 

Revenue 

For the 12 months ended 31 March 2026, total revenue increased by 11.4% to £1,266.6m (2025: £1,137.5m).

B2C Retail revenue

Revenue in our core B2C Retail business has increased 9.5% year on year. This increase is driven by growth in product, service, delivery and product protection plan sales. Product revenue and associated revenue is generated from ao.com, marketplaces and third-party websites.

This performance comes as a result of our increased drive to grow not only our MDA market share, where our share of the total market grew over 1% to 17.1% but also in other key categories including SDA and AV where we also made market share gains year on year.

There was an increase in service revenue, which includes membership income, fees for delivery, recycling, installation and related services mainly driven by the increase in product revenue.

B2B Retail revenue

Revenue has decreased by 11.9% year on year in B2B, as expected, in line with the Group's focus on optimising for profitability.  We expect a small single digit decline in revenue in FY27, but the reset of B2B has been materially completed.

Mobile revenue

Mobile revenue decreased by 18.4% year on year, reflecting the shift in focus towards profit generation. As we prioritised margin optimisation and tighter acquisition cost disciplines, connection volumes reduced as a consequence. This, alongside a softer market for new mobile contracts, resulted in lower overall commission income from network partners.

Recommerce revenue

Recommerce revenue is generated from product sales through musicMagpie and ElekDirect, as well as reworked recycled products through AO Recycling. Revenue grew year on year by 180.5% to £119.5m (2025: £42.6m), with the majority of the increase attributable to a full year of musicMagpie consolidation.

Third-party logistics revenue

Third‑party logistics revenue increased by 9.2% year on year to £33.3m (2025: £30.5m), driven by demand for our market‑leading expertise in complex two‑person delivery. We provide delivery and related services for a number of third‑party clients in the UK, including Hisense and Simba. This activity generates incremental profitability by leveraging existing infrastructure and operational capacity. The Group will continue to optimise this opportunity to benefit from operational gearing, while maintaining focus on the core retail business.

Recycling revenue

Recycling revenues increased by 6.8% during the year, representing a resilient performance given the wider trading environment. Higher major domestic appliance sales and increased customer uptake of our recycling services drove year on year growth in processed volumes, supported by the introduction of palletised plastic processing. This increase in volumes was partly offset by a reduction in output prices for recycled materials, reflecting broader market conditions.

Source : AO plc

Image : AO plc

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