AO has raised its full-year forecast, reflecting strong performance in profits and sales.
- The company expects adjusted profit before tax between £39m and £44m, driven by a 30% rise in the first half.
- Total revenues increased by 6% to £512m, highlighting robust business dynamics.
- Key developments include expanding its membership base and launching new solutions.
- Anticipates £12m in additional costs due to recent UK Budget measures.
AO has reported optimistic projections for the full financial year, underpinning its performance through a notable increase in both profits and sales. The company’s adjusted profit before tax is now foreseen to be in the range of £39 million to £44 million. This revision comes on the heels of a 30% increase in adjusted profit before tax for the first half of the year, culminating at £17 million.
Total revenues for the six months ending 30 September 2024 have grown by 6%, amounting to £512 million in total. This growth is attributed to strong operational achievements and strategic initiatives. Among these, the business-to-consumer (B2C) retail revenues rose by 13%, reaching £382 million, suggesting effective consumer engagement and market strategies.
Significant strides were also made in operational capability. AO expanded its Five Star membership, offering more value to its consumers, and it launched a third-party warehousing solution tailored for small products in April. Moreover, the acquisition of musicMagpie added to its strategic portfolio, enhancing growth prospects beyond traditional categories.
Despite this success, AO acknowledges the impact of external economic variables. Following the recent UK Budget announcements, the company anticipates an additional £4 million in direct costs annually, alongside £8 million in indirect costs. This adjustment outlines the financial landscape within which AO is navigating its expansion efforts.
John Roberts, AO’s founder and chief executive, expressed satisfaction with the six-month performance and reiterated a commitment to achieving a profit-before-tax margin of over 5% as a medium-term objective. While acknowledging a shift in product sales due to unseasonable weather, Roberts praised the team’s ability to adapt to these changes, balancing category demands.
Looking forward, AO is well-positioned to capitalise on its strong market position, despite anticipated financial challenges.
