Shares in AO World plunged this morning after the online electrical retailer reported an operating loss of £11m in the six months to 30 September 2021, as a shortage of drivers and global supply chain issues stalled growth in the UK.
The disappointing results come a year after the UK-based company recorded an operating profit of £16m for the same period.
The company, which sells dishwashers, laptops and TVs, warned the shortages of products over the Christmas period will hit its profits this year.
The continued shortage of drivers saw the business recruit 500 new drivers in a bid to meet demand but AO World said it still expected “meaningful supply chain challenges with poor availability in certain categories” to continue into the second half of the Group’s financial year, with additional challenges around the uncertainty of shipping costs, material prices and consumer price inflation.
AO World is only the latest victim of the twin crises, of driver shortages and the global supply chain crisis, hitting businesses as they prepare for one of the busiest periods of the year.
According to data published by the Office for National Statistics (ONS) last week, multipack crisps were the trickiest item to get hold of in the country.
Unfortunately, for both consumers and businesses, the delays are likely to continue well into next year, with some predicting even further ahead. Earlier this month the UK’s biggest port operator, Associated British Ports, warned that that supply chain crisis could last up until 2023.
As a result of the “substantial amount of short-term uncertainty,” AO World downgraded its revenue projections for the full year to minus five per cent year on year.
Meanwhile the appliance retailer saw its shares plunge at the open by as much as 24 per cent following the announcement of its results, before recovering somewhat in afternoon trade.
The half-year results marks a downward shift for the the online seller of appliances and gadgets, which saw a surge of online shopping amid the pandemic push its revenues to surge 59 per cent in the year to 31 March.
Founder and chief executive of AO John Roberts said: “We’re working hard to solve some of the current challenges that our industry is facing. We’ve recruited c.500 new drivers and are working closely with our manufacturer partners so that customers can get what they need.”
Total group revenue remained strong at £760, up 6 per cent compared to last year and 67 per cent pre-pandemic in 2019.