AO World has said profits will come in at the top end of expectations after a strong year of sales growth, despite mounting pressure on household finances and rising operating costs.
The white goods retailer told shareholders that revenues are expected to rise by about 11% for the year to March 31, driven by a 9.5% increase in its core consumer business and market share gains across key product categories.
Adjusted pre-tax profits are now forecast to come in at the upper end of its £45m to £50m guidance range, representing roughly 15% year-on-year growth. The company had already upgraded its outlook last September following a strong first half.
The performance comes as retailers across the UK grapple with higher energy costs and fragile consumer demand, both of which are exacerbated by geopolitical tensions in the Middle East.
AO World said it had taken steps to protect itself from volatility, with hedging arrangements covering around 80% of its expected fuel use and 100% of electricity consumption for the coming financial year.
The group also expects to maintain a robust financial position, with approximately £200m in liquidity and £65m in free cash flow over the past year, providing flexibility to navigate an uncertain economic environment.
The update suggests that demand for big-ticket household appliances has stayed resilient, even as consumers face higher borrowing costs and persistent inflation.
However, analysts warn that the outlook for retailers remains finely balanced, as energy prices and supply chain pressures continue to pose risks in the months ahead.
AO’s founder and chief executive John Roberts said: “The numbers speak for themselves again and I am delighted to keep doing our talking on the pitch.
“Our shared economics strategy and membership model, built on the foundations of brilliant retail basics, continues to deliver results.
“We continue to build momentum and all key metrics continue to improve, with an exciting pipeline of new initiatives ahead.”
Leave a Comment