AO World's share price slid this morning after the online electricals retailer announced an operating loss.
AO World's total revenue for the year ending 31 March increased 17 per cent, growing from £599.2m to £701.2m. UK website sales increased 14.5 per cent to £557.9m. European revenue was up 52.3 per cent on a constant currency basis to £71.5m.
Read more: AO World has raised £50m in a share placing
However, the group made an operating loss of £12m, which it said was due to trading losses in Germany and the Netherlands. Operating losses in AO World's European business widened from £23m to £27.6m.
At time of writing, AO World's share price was down 6.48 per cent at 135p. The shares have fallen by two-thirds since it floated in 2014.
Why it's interesting
AO World has been expanding into Europe, and the firm's management told City A.M. this morning that more losses were expected as the business sets up on the continent, but that the company was "delighted" about the progress it was making.
"What we're trying to create over there is huge," said Steve Caunce, chief executive of AO World. "We're doing pretty much everything ourselves."
George Salmon, equity analyst at Hargreaves Lansdown, said: "Despite making continued market share gains in the UK and Europe, the over-riding feeling in AO World's results is 'more of the same'.
"The news that investment in the European expansion has been higher than anticipated isn't helping the cause either."