Lockdown tech and shift to online lifts AO World’s revenues and profits
The surge of online shopping amid the pandemic pushed revenues at online electrical retailer AO World to surge 59 per cent, the retailer said in a statement this morning.
The switch to online helped AO wire in around £1.4bn in UK revenue in the year to 31 March, while revenue across the group entirely lifted 62 per cent to £1.6bn.
The group broke even last year with a profit before tax of £1m, which swelled to £20m this year.
“It’s been a step-change year for AO in which we’ve achieved significant strategic, operational and financial progress. The early and bold investments we made in capacity, infrastructure and people returned increased revenues by 62 per cent,” AO founder and chief executive, John Roberts, said.
Shares opened lower this morning, but steadied in the afternoon with a slight 0.1 per cent lift, taking its price to 253.4p per share.
Basic earnings per share rocketed amid the surge of tech spending in the UK, soaring 1,676 per cent – taking earnings from 0.21p to 3.7p per share over the six months.
Demand ‘is unlikely to wane’
In the UK, major domestic appliances like fridges and freezers grew 61 per cent, as three national lockdowns pushed consumers to evaluate their living spaces.
Demand for smaller domestic appliances rocketed 103 per cent. However, still lagged behind customers desire for electronic and gaming tech which grew 126 per cent and 127 per cent respectively.
Senior investment and markets analyst at Hargreaves Lansdown, Susannah Streeter, said: “The company recognises that it can’t rest on its laurels in an increasingly saturated UK electricals market. It has big ambitions for global expansion, and with the world consumer turning digital, it is well placed to capitalise on this trend with its well-established online platform and supplier network.
“Demand for digital and electrical goods is unlikely to wane as working from home becomes the norm for at least part of the week, in many parts of the globe.”