AO has once again revised its full-year forecast upwards, showcasing strong financial health with notable profit and sales growth in H1 2024.
- The company anticipates an adjusted profit before tax between £39m and £44m, with total revenues estimated to hit £1.13bn.
- During the half-year ending 30 September 2024, profits surged 30% while revenues saw a 6% uplift to £512m.
- Operational highlights include a 13% boost in B2C retail revenue and strategic expansions such as launching a third-party warehousing solution.
- The adverse weather played a role in shifting sales patterns, impacting categories like fridges and air conditioners.
AO has reported positive financial results leading to an upward revision of its full-year forecast, reflecting strong performance in the initial six months of 2024. The company now projects an adjusted profit before tax in the range of £39m to £44m and expects group revenues to reach £1.13bn. Capital expenditure is anticipated to be around £11m, demonstrating AO’s robust financial health.
For the half-year period ending 30 September 2024, AO witnessed a 30% increase in adjusted profit before tax, climbing to £17m, while total revenues rose by 6% to £512m. Operating profits exhibited an 11% growth, signifying effective cost management and operational efficiency.
B2C retail revenues experienced a significant 13% rise, amounting to £382m. AO’s strategic initiatives during this period included expanding its Five Star membership and launching a third-party warehousing solution for small products in April, as well as acquiring musicMagpie. These developments illustrate AO’s commitment to broadening its market influence and enhancing service offerings.
The forecast adjustments align with AO’s strategic targets, where profits and shareholder earnings have outpaced revenue growth. Following the UK Budget, AO forecasts an additional £4m in direct annual costs and £8m in indirect costs, impacting future financial planning. Despite these challenges, AO has maintained a focus on cost efficiency and margin improvements.
John Roberts, AO’s founder and CEO, expressed satisfaction with the company’s performance, highlighting that their main B2C Retail business has returned to double-digit growth. He noted the ‘Morecambe and Wise summer’ as a period with unexpected sales dynamics due to weather conditions, affecting categories like fridges and air conditioning units. Nevertheless, alternative products like tumble dryers saw increased demand.
Roberts also emphasized AO’s progress beyond its core major domestic appliances (MDA) category, indicating a positive customer response to new ranges and value propositions. AO’s high standards in customer service are evident from its Trustpilot reviews, surpassing 600,000 with an average rating of 4.8 out of 5.
Overall, AO’s strategic focus on expanding service offerings, coupled with effective cost management, has resulted in promising growth, positioning the company well for future opportunities amidst market challenges.
AO’s strategic initiatives and robust performance in early 2024 support its optimistic forecast, solidifying its position for continued growth.
