AO World Notes Full-Year Profit Boost

• Record £45m LFL adjusted PBT, ahead of original guidance
• 12% sales growth in core B2C retail business 

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 2025 ("FY25"). 

Our core B2C Retail business saw strong growth in the year, in line with our expectation of delivering double-digit growth. As planned, adjusted profits on a like-for-like (LFL¹) basis grew faster than revenues at 32% despite macroeconomic headwinds, with LFL adjusted profit before tax above the top end of our previously upgraded range of £39 to £44m.

Financial highlights 

• LFL Group revenue grew 7%, to £1.108bn with core B2C Retail revenue up 12% to £832m. Growth was driven by the expansion of our Five Star membership offering as well as the broadening of our product range to c9,000 products. musicMagpie contributed an additional £30m revenue to the Group for the period.

• As planned, LFL adjusted profit before tax grew faster than revenue - up 32% to £45m -with LFL adjusted PBT margin of 4.1%, making good progress towards our medium-term target of 5%. 

• Free cashflow of £23m (2024: £21m) driven by strong operating performance and efficient working capital management. The Group ended the year with net funds of £23m after the c.£35m cash costs relating to the musicMagpie acquisition and the funding of the EBT to purchase shares to satisfy share schemes.

• The Revolving Credit Facility was increased and extended with the total facility increasing from £80m to £120m which remains undrawn and now expiring in October 2028. 

Operational highlights

• Successful acquisition of musicMagpie, enabling further vertical integration and enhancement of our customer offering in the electricals market.

• Five Star membership momentum continues to be strong with growth in membership numbers, renewal rates and share of wallet.

• Implementing our third-party warehousing solution for small products in the year has improved the unit economics enabling the profitable expansion of our range and therefore giving customers, particularly Five Star members, even more reasons to buy from us.

• Repeat customers accounted for over 60% of orders and are cheaper to acquire, give us better share of wallet and buy across more categories. We expect this trend to continue to improve over time as the proposition and awareness of it across categories grows.

• Over 650,000 new customers⁶ chose to buy from us for the first time during the year, which is fuel for our flywheel in the future.

• Cemented our position as the UK's most trusted electrical retailer in the year - increasing our Trustpilot⁶ score to a globally leading 4.9/5 on over 750,000 reviews.

• Extension to December 2033 of our arrangement with Domestic and General in relation to the sale and promotion of the "AO Care" product protection plans.

• Extension of NewDay arrangement to August 2033, with a rebase of commercial terms and a roadmap for future growth.

• Our culture is thriving, with happy, committed and engaged employees delivering exceptional customer service. AO was named as a top 200 UK best employer following a survey carried out by the Financial Times and Statista.

• Performance in the Mobile business has been materially behind our expectations and a drag on profits as the post-pay connection market has declined further, and customer preference has shifted towards disaggregation of mobile contracts. We continue to review our strategy in this area and will not continue to fund material losses going forward.

• Recycled or refurbished our eight millionth appliance at our AO Recycling facility.  Further capex investment in the facility included the addition of an extruder to the plastics plant which increases our capability to refine plastic output and is critical to our ambition of creating new fridges from old fridges.

Outlook

As we look to FY26 we have a number of initiatives in the pipeline which we expect to give customers more opportunities to buy from us, and more reasons to keep coming back to us. Despite the wider macroeconomic challenges, particularly employment cost increases, our objectives remain unchanged and we are confident in our ability to continue to grow revenue, alongside Group adjusted PBT of £40m to £50m.

Looking to the medium term, we reiterate our ambition of delivering a PBT margin of over 5%. And in the longer term, we are confident in our ability to take advantage of the c. £28bn total addressable market that we have in front of us. 

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

"Our 25th year in business has been our best yet. We've delivered a record¹⁰ profit before tax performance, significantly grown our sales, and continued to delight our ever-growing customer base with trusted, outstanding service. 

"One of the key drivers of this performance is our Five Star membership programme, which is giving our customers even more reasons to keep coming back to us. We're also broadening our product range beyond the Major Domestic Appliance category that we're best known for. We added over 1,500 new products during the year, which means that categories such as fitness, drones, cameras and health and beauty are all now available at fantastic prices through AO. 

"And the really great news is that there's so much more for us to go after, with a total addressable market of over £28bn. Given the size of that prize, the fantastic momentum that we're seeing across the business, and our awesome team of AOers, I couldn't be more excited about the next 25 years. In many ways, we're only just getting started."

Source : AO

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