AO World revenue surges on demand for electrical goods over Christmas
AO World reported significant revenue growth in the third quarter after strong demand for electrical goods in the run-up to Christmas.
The online electrical retailer reported UK revenue growth of 67.2 per cent to £457.3m, while German sales jumped 77.4 per cent to €73.6m.
The company, which sells washing machines, fridges, TVs and laptops, has benefited from a closure of physical stores due to lockdown restrictions as they are not deemed essential retailers.
“I believe we’ve seen ten years of change in ten months, and experienced our strongest ever peak trading period… We look forward to the last quarter and the next financial year with confidence as the structural shift to online is cemented in consumers’ minds” founder and chief executive John Roberts said.
“Now that customers have experienced a better, digital-first way to shop for electricals, I believe the majority will never look back,” he added.
Despite higher sales AO World noted it had upped infrastructure investment and incurred higher operating costs including warehousing, vehicles and drivers.
The retailer also warned there had been a slight increase in the cancellation of mobile contracts and warranties “driven by Covid impacts on customers behaviour”.
FY2021 has been a great year for the company with the sales momentum and structural shift online but also increased operating costs too,” said Shore Capital analysts.
“Germany is scaling nicely and will be Ebitda profitable during FY2022. For now, we reiterate our Hold rating and believe that the next catalyst could be the Q1 growth rate later in the Spring.”
In spite of the upbeat trading statement AO’s share price dipped nearly eight per cent in early trading.