REG - AO World plc - Trading Statement

AO WorldAnnouncement

25/03/2025 07:15

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RNS Number : 9593B  AO World plc  25 March 2025

This announcement may contain inside information for the purposes of Article
7 of the Market Abuse Regulation (EU) 596/2014 as it forms part
of UK domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR"), and is disclosed in accordance with the Company's obligations under
Article 17 of MAR. Upon the publication of this announcement via the
Regulatory Information Service, any inside information will be considered to
be in the public domain.

25 March 2025

AO WORLD PLC

Full Year Pre-Close Trading Update for FY25

Profit(1)up c30% and around the top end of guidance range

Double digit B2C Retail revenue growth forecast again for the year ahead

 

AO World plc ("the Company" or "AO"), the UK's most trusted electricals
retailer, today issues the following update for the 12 months to 31 March
2025.

 

B2C Retail revenues are expected to increase by c12% YoY, with estimated LFL
Group revenues(2) expected to increase c7% YoY to £1.1bn, reflecting
reductions in B2B and mobile as we focus on profitable growth as set out in
the half year results in November.

 

Adjusted profit before tax(1) has grown faster than sales, in the region of
30%, and is expected to be around the top end of our previously upgraded
guidance range of £39m to £44m.

 

At the period end we expect to have net funds on a pre IFRS16 basis of around
£20m, after the outflow of c£25m for the acquisition of musicMagpie plc
("musicMagpie"). The Company extended its revolving credit facility in the
period from £80m to £120m to October 2028 on more favourable terms, and it
remains undrawn.

 

On 12 December 2024, the Company successfully completed the acquisition of
musicMagpie. The post-acquisition performance of musicMagpie is expected to
contribute around £30m of revenue and a negligible loss to the FY25 results.

 

Looking ahead to FY26, our current momentum means we expect our B2C Retail
business will deliver another year of double-digit revenue growth and our
other revenue categories to be broadly flat. Despite the wider economic
uncertainty and cost headwinds from the Government's budget we again expect
adjusted PBT to continue to grow faster than sales.

 

We are pleased today to also announce that we have appointed Mark Higgins to
Chief Operating Officer (in addition to his existing role of Chief Financial
Officer), reflecting the way Mark and John have been running the business
together for some time.

 

John Roberts, AO's CEO and Founder, commented:

 

"Our strong performance shows that our model is working. With a globally
leading Trustpilot score of 4.9 from almost 750,000 reviews, and AO Five Star
membership continuing to grow strongly, we're cementing our position as the
most trusted electrical retailer and are increasing our frequency and share of
wallet with customers.

 

"AO is back to being a highly efficient growth machine; we are reaping the
rewards from the execution of our strategy and 25 years of unwavering
obsession with amazing customer service.

 

"We're carrying good momentum into the new financial year and are pleased to
be guiding to another year of double-digit revenue growth in our B2C Retail
business, and for profits to keep growing faster than sales."

 

AO expects to publish its Full Year Results to 31 March 2025 on 18 June 2025.

 Enquiries
 AO World plc

 John Roberts, Founder and Chief Executive                         IR@AO.com (mailto:IR@AO.com)
 Mark Higgins, Group CFO & COO

 Sodali & Co                                                       Tel: +44 (0)20 7250 1446

                                                                   ao@sodali.com (mailto:ao@sodali.com)

 Rob Greening

 Russ Lynch

 

(1) Adjusted PBT is defined as a profit/(loss) before tax, adjusted for any
non-recurring items as defined by the Board. Specifically this will include
two adjusting items, firstly the expenses surrounding the acquisition of Music
Magpie of £3.3m. Secondly the market has continued to deteriorate for post
pay mobile connections, and as highlighted in the interim results a worsening
of this position would likely result in an impairment of goodwill and
intangible fixed assets in our Mobile Cash Generating Unit. We will continue
to work with our auditor, KPMG to finalise this in our financial statements
but the potential impairment charge could be up to the full £22m of goodwill
and intangibles held on the balance sheet.

 

(2) Based on unaudited management accounts. AO World's financial year FY25
runs from 1 April 2024 to 31 March 2025 and LFL excludes the impact of
musicMagpie.

 

 

 

 About AO

 AO World PLC, headquartered in Bolton and listed on the London Stock Exchange,
 is the UK's most trusted major electricals retailer, with a mission to be the
 destination for electricals. Our strategy is to create value by offering our
 customers brilliant customer service and making AO the destination for
 everything they need, in the simplest and easiest way, when buying
 electricals.  We offer major and small domestic appliances and a growing
 range of mobile phones, AV, consumer electricals and laptops. We also provide
 ancillary services such as the installation of new and collection of old
 products and offer product protection plans and customer finance. AO Business
 serves the B2B market in the UK, providing electricals and installation
 services at scale. AO also has a WEEE processing facility, ensuring customers'
 electronic waste is dealt with responsibly.

 Cautionary statement

 This announcement contains certain forward-looking statements (including
 beliefs or opinions) with respect to the operations, performance and financial
 condition of the Group. These statements are made in good faith and are based
 on current expectations or beliefs, as well as assumptions about future
 events. By their nature, future events and circumstances can cause results and
 developments to differ materially from those anticipated. Except as is
 required by the Listing Rules, Disclosure Guidance and Transparency Rules and
 applicable laws, no undertaking is given to update the forward-looking
 statements contained in this document, whether as a result of new information,
 future events or otherwise. Nothing in this document should be construed as a
 profit forecast or an invitation to deal in the securities of the Company.
 This announcement has been prepared for the Group as a whole and therefore
 gives greater emphasis to those matters which are significant to AO World plc
 and its subsidiary undertakings when viewed as a whole.

 

 

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