Electrical retailer AO World today warned investors it expects to take a £2.5m hit this year as it shakes up its management team in the wake of John Roberts’ return as chief executive.
The exceptional costs for the 12 months to the end of March will also include charges for a loss-making contract in Germany, it said in a trading update today.
The online business also revealed it has spent £15m on Brexit stockpiling as it “increased our usual core fast moving inventory levels” such as washing machines and ovens sourced from outside the UK.
“This will help ensure we can continue to deliver our market-leading proposition to our customers,” AO World said.
AO expects to net around £900m in group revenue, 13 per cent up on the year before, with UK revenue up almost 10 per cent to £748m.
However, earnings before interest, tax, depreciation and amortisation will fall to the lower end of expectations.
Full year performance for FY19 is expected to fall within the range of current market forecasts.2
Founder and chief executive Roberts said his firm has undergone a “mindset shift” to aim for higher sales “with pace and energy”.
“We have already announced that we are testing a genuinely disruptive rental proposition. We have also expanded categories further into garden and DIY ready for the season and we are accelerating AO Mobile to launch later this year in readiness for peak trading,” he said.
Roberts returned at the end of January to replace Steve Caunce, who stepped down to take on “a less demanding business role”.
“I am delighted to once again have the privilege to lead the business and excited by the scale of value creation that lies ahead of us for the benefit of all stakeholders,” Roberts said.
“I look forward to updating more fully in early June on how we are accelerating our plans to grow while leveraging the infrastructure we have invested in.”
AO World reported a first-half loss in November and slower sales growth after suffering in the UK’s slowdown in consumer spending slowdown.