Published on November 20th, 2018 | by The GC Team0
AO World fights tough trading environment
AO World has reported revenue for the six months ended 30th September up 9.9% to £404.2m against a “continuingly tough macro trading environment in UK and Europe” and a declining UK MDA market. Group adjusted EBITDA losses were reduced to £5.4m from £6.3m in 2017.
Total UK revenue rose 5.7% to £334.8m. AO website sales for the UK increased 4.2% to £294.3m, with growth coming from newer categories such as AV, computing and cameras. Adjusted EBITDA of £6.9m was affected by lower than anticipated MDA sales and the expected dilutive gross margin percentage impact of growth in newer categories.
Revenue in Europe increased 35.0% to €78.4m. Adjusted EBITDA losses were reduced to €13.8m, from €15.6m in 2017, as a result of improvements in product margin and leverage in logistics and overheads.
Group operating losses were reduced to £11.7m, from £12.0m in 2017, and included exceptional costs of £1.4m incurred in relation to the proposed acquisition of Mobile Phones Direct Ltd.
Steve Caunce, AO Chief Executive Officer, commented: “This has been a half of continued delivery against our long‐term strategy, thanks to a strong offer for customers.
“While our core UK and Germany MDA markets have been challenging, with the UK MDA market becoming tougher than expected, we take encouragement that we are at least maintaining market share in this core category in the UK and growing significantly in Germany.
“Elsewhere, our continued focus on growing our range of online electricals and adding new complementary ranges proved successful in the first six months of the year, with newer categories such as Audio Visual and Computing performing particularly well.
“Similarly, we are excited about further strengthening our customer offer through the acquisition of the UK’s leading online‐only mobile phone retailer, Mobile Phones Direct.
“Our peak trading period began on 9 November with the launch of our biggest ever Black Friday and I remain confident of achieving long‐term sustainable growth across the Group. “We expect full year results to fall within the range of Board expectations, albeit more second half weighted than previously anticipated.”