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AO World Raises Profit Guidance

AO New van in street

AO World plc ("the Company" or "AO"), a leading online electrical retailer, today issues the following trading update for the 12 months to 31 March 2023.

Consistent with the themes set out in the trading statement issued on 28 February 20231, we continue to see positive traction from our initiatives to reduce costs and improve margins. The potential adverse effects from trading risks, continuing macroeconomic uncertainty and tough consumer environment that we anticipated at 28 February have not materialised to the extent envisaged and as such we are updating our profit guidance to around the top end of profit guidance issued at that date.

Estimated UK revenues2 for the full year to 31 March 2023 are expected to be £1.13bn, in line with our plans.  AO's resulting online UK MDA market share is 32.1%3.

The Company's £80m revolving credit facility has been renewed with HSBC, NatWest, and Barclays, extending to April 2026.  At the period end we expect to be holding a modest net funds position on a pre IFRS16 basis, reflecting an improvement of circa £20m from our interim position at September 2022.

John Roberts, CEO and Founder, commented:

"We are encouraged by the work undertaken to pivot the business during the financial year 2023. AO enters the new financial year with net funds on the balance sheet, a robust trajectory, and full confidence in our ability to deliver on our medium-term profit guidance of 5% adjusted EBITDA4. We anticipate that our progress in improving both operational cost efficiencies and margin in FY23 will continue through the next 12 months and beyond."

AO expects to publish its Full Year Results to 31 March 2023 on 5 July 2023.

1 In our trading update announcement on 28 February 2023 we guided to a range of £37.5m to £45m adjusted EBITDA.

2 Based on unaudited management accounts. AO World's financial year FY23 runs from 1 April 2022 to 31 March 2023.

3 Based on GfK data reflecting market share data as at February 2023 vs February 2022.

4 Adjusted EBITDA is defined a profit/(loss) before tax, depreciation, amortisation, net of finance costs, profit/(loss) on disposal of fixed assets, and other adjusting items (including restructuring costs). 

Source : AO World PLC

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14 April 2023

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