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AO World Upgrades Profit Guidance

AO New van in street
  • Strategic pivot progress continues and profit guidance upgraded 

AO World PLC ("the Group" or "AO"), the UK's most trusted electrical retailer, today announces its unaudited financial results1 for the six months ended 30 September 2023 ("HY24").

The first six months to September 2023 saw the continued delivery of profit and cash generation. As a result, we are upgrading our profit before tax guidance for FY24 to between £28-33m. 









Adjusted EBITDA2




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  • Step change in profitability year-on-year as we continue to deliver on our strategic pivot to profit and cash

  • Statutory profit before tax of £13m (HY23: £(12)m). Gross margin has improved to 23.5% (HY23: 19.5%) as a result of decisive action:

o  Removing unprofitable sales as well as the introduction of delivery charges on all deliveries.

o  Advertising and Marketing costs have been tightly controlled with a change in focus of spending from acquisition to brand investment.

o  Warehousing costs have fallen to £25.5m (HY23: £31.3m) or to 5.3% of sales (HY23: 5.7%). Operational efficiencies and annualisation of property rationalisation, offset by inflationary increases in wages.

o  Other admin costs have decreased by £9.4m to £56m. Tight control over ongoing spend has helped offset inflationary pressures.

o  The overall mobile market has declined in the year, which has negatively impacted the Group's ability to hit network volume targets set for the calendar year 2023. This will have an overall single digit millions profit drag in FY24 and this is absorbed within the upgrade today.

  • Adjusted EBITDA of £27m (HY23: £9m), achieving an adjusted EBITDA margin of 5.6% (HY23: 1.6%)

  • Improved cash generation in the period leading to overall liquidity3 of £99m (31 March 2023: £89m: 30 September 2022): £68m and net funds4 of £16m (31 March 2023: £4m: 30 September 2022: net debt £19m)

  • Revenue decreased by 12% as expected as we continue to annualise the actions taken to remove non-core channels and unprofitable sales, and increase gross margins.

  • Over 290,000 new customers5 experienced the AO Way during the period with an increase in the repeat customer purchase percentage rate.

  • Customer satisfaction scores remain outstanding: Trustpilot reviews have grown to over 440,000 averaging 4.7 out of 5 stars - continuing to position AO as the UK's most trusted electrical retailer.

  • Focus on branded advertising has increased spontaneous brand awareness by about 10% YoY.


Our previous FY24 guidance in July was for PBT around £28m9. Whilst mindful of the ongoing cost of living crisis and geopolitical events that give rise to uncertainty and volatility, we continue to optimise for profit outturn and are increasing our profit before tax expectations to between £28m and £33m for the full year. We now expect FY24 revenue to be around -10% YOY.

We will continue to invest prudently in the business and seize the significant market opportunities that we see in front of us, with our growing and loyal customer base.

Our medium-term ambitions remain unchanged:

  • Annual revenue growth in a corridor of 10 -20%
  • PBT margin 3 - 5%
  • Profit converting to cash

Longer-term, our addressable market in the UK is significant as it currently stands at c£27.6bn6, and in order to take advantage of this we will look to deepen our presence in categories such as televisions, laptops, audio visual and small domestic appliances ("SDA").  The online segment of the market in those categories remains a key opportunity for us as the long-term structural migration to online retailing continues.

AO's Founder and Chief Executive, John Roberts, said: "I am very pleased with the clear progress that we are making as a result of our strategic pivot to focusing on profit and cash. We have generated more profit in the first half of this year than we did in the whole of last year, and are also upgrading our profit expectations for the remainder of FY24.   

"As we anticipated, sales have reduced year on year as we continue to annualise the actions that we've taken to remove non-core channels and unprofitable sales from the business. However, we expect to end the year having returned to run rate revenue growth.  

"Our core fundamentals are in great shape and our service to customers has never been better. Our Trustpilot scores continue to be the best in the market, our spontaneous brand awareness is at record levels, and our transacted customer base now stands at 11.6m people.

"As ever, I'm grateful to our manufacturer partners for their continued support and of course to the fantastic AO team who continue to be magical in the moments that matter for customers while maintaining the discipline and focus needed to deliver our plan.

"We look forward with cautious optimism, given the macro challenges, as we turn our attention back to delivering profitable revenue growth to drive our operational gearing."

Source : AO World PLC

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22 November 2023

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