Published on June 7th, 2018 | by The GC Team0
AO “on track” as losses widen
AO World has reported continued revenue growth in both the UK and Europe for the year ended 31st March 2018, with total revenue up 13.6% to £796.8m. Group Adjusted EBITDA losses for the period rose from £2.1m in 2017 to £3.4m.
Total UK revenue increased 8.1% to £680.8m, with AO website sales in the region up 8.7% to £606.6m. The company said this growth was achieved despite the core UK MDA market experiencing overall lower volumes year-on-year, set against an environment of lower consumer confidence associated with the Brexit process.
UK Adjusted EBITDA fell from £24.4m last year to £22.6m in the year to March 2018, impacted mainly by higher marketing costs in the first half and a consistently competitive pricing environment.
Revenue in Europe for the period increased 54.8% on a constant currency basis to €131.2m, despite minimal traditional marketing activity, the company said.
Adjusted EBITDA losses for the region fell to €29.6m from €31.5m in 2017 with continued investment in European expansion.
The Group recorded an operating loss of £16.2m (2017: £12.0m loss), reflecting further trading losses incurred in Europe.
Operating profit for the UK fell 25.4% to £11.6m, while operating losses for Europe remained broadly the same in sterling at £27.8m.
Steve Caunce, AO Chief Executive Officer, said: “The new financial year has started well in both the UK and Europe, with UK revenue growth returning to double-digit levels against prior year.
“Whilst we remain cautious on outlook given economic and competitive pressures on the UK electricals market we are confident of achieving our stated goals of future growth in the years ahead.”