AO World, a British online consumer electrical retailer, has raised its expectations for the full year after returning to profit in the first half. Despite a fall in sales and challenging market conditions, the company was able to offset this with reduced costs and improved margins. Inflation is falling in the UK while borrowing costs are high, and there is pressure on big-ticket expenditure in the housing market.
Despite a 12% drop in revenue to £482 million pounds in the six months to Sept. 30, AO reported a pretax profit of £13 million pounds compared to a loss of £12 million pounds in the same period last year. For the full 2023/24 year, the company forecasts a pretax profit of between £28 million pounds and £33 million pounds, an increase from previous guidance of around £28 million pounds. It also expects full-year revenue to decrease by approximately 10%.
AO World expressed its intention to continue investing prudently in its business and seize significant market opportunities. In June, the company formed a strategic partnership with Mike Ashley’s Frasers sportswear and fashion group, making Frasers its biggest shareholder with a 22.1% ownership stake. The shares of AO have increased by 60% year-to-date.
Overall, AO World has been successful in taking measures to offset declining sales, resulting in a return to profitability in the first half of the year. The company remains optimistic about its future prospects and is raising its full-year expectations while continuing to invest prudently and seize market opportunities as they arise.