AO World swings to a profit as demand for electrical appliances online soars

Online electrical retailer AO World has swung to a profit after a surge in domestic appliance sales during the pandemic helped revenue rocket more than 50 per cent.

AO's plant in Telford
AO's plant in Telford

The company, which has a major recycling centre in Telford and recently opened a new warehouse in Stafford, said sales in the six months to September 30 jumped 53.2 per cent to £717 million – up from £468 million in the same period last year.

Pre-tax profit swelled to £18.3 million, pushing the company into the black from a loss of £5.9 million last year.

The FTSE 250-listed company saw online demand catapult as high street retailers remained shuttered during two nationwide lockdowns during the pandemic.

Chief executive John Roberts said: “This has been a half year like no other. I believe our market has changed as a result, forever. Online is now the dominant retail channel for customers and manufacturers alike.”

The group noted that the coronavirus crisis had accelerated a “step change” in the market, with the brand taking pains to cement its reputation as a leader in the sector.

AO said it has taken advantage of cheaper advertising slots and returned to TV via a targeted advertising campaign.

The group last month launched its first trial store within a Tesco Extra store “with the aim of growing AO brand awareness”, as well as signing a five-year deal to be the headline sponsor of the Manchester Arena, which has been officially renamed the AO Arena.

AO said its main focus in the six months to September 30 was on fulfilling increased customer demand in the core retail channel, which forced it to delay the full launch of AO Mobile which is now planned for 2021.

“The shift to online is not just a UK phenomenon; it is across the world. European online electrical markets are less mature than the UK therefore presenting us with a significant opportunity on which to capitalise,” the group said.

“Still, there are headwinds, not least in the macroeconomic climate, including the threat of Covid-19-related recessionary behaviour and Brexit from January 2021,” added Mr Roberts.

“We have grown share across all categories and the results we’re announcing today give huge confidence that our business is well set for the future to cement the changes.”

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