Trading Statement

RNS Number : 7801F

AO World plc

25 February 2015

 



AO World plc

("AO" or "the Company")

25 February 2015

Trading Statement

AO World plc, the UK's leading online retailer of major domestic appliances, provides the following update on trading ahead of its year end on 31 March 2015.

The Group continues to show strong revenue growth year on year.  However, the Company expects growth in revenue and adjusted EBITDA for the UK business for the current quarter to be lower than anticipated. As a consequence, the Company expects the results for the financial year ending 31 March 2015 will fall slightly below market expectations.

AO has found achieving expected sales growth to date in Q4 FY15 difficult and this has negatively affected adjusted EBITDA.  It is now apparent that some of the revenue growth in the second half of FY14 and going into FY15 was due to the extra publicity surrounding the Company at that time.  This impacted the year-on-year growth rate. 

At the time of the Q3 trading statement, the Company expected to meet the market's expectations for both revenue and adjusted EBITDA in the UK, even taking into account the loss of a logistics contract, the cost impact of driver legislation changes and the adverse effects of Black Friday, which did not produce incremental sales, but condensed sales into a shorter time period.

These combined factors are likely to result in revenue and adjusted EBITDA for the UK operations of c.£470m-£475m and c.£16.5m, respectively. These factors are also expected to impact the performance of the Company in the next financial year.

The Board of AO is confident that the Company's fundamental business model remains strong and AO is continuing to deliver on its strategic objectives: trading in Germany, the new market entered six months ahead of plan, is advancing well and other territories are continuing to be assessed for further international expansion, while the introduction of the AV category in the UK is developing well.

John Roberts, Chief Executive Officer, said:

"AO has experienced tougher than expected trading conditions in the final quarter of the year, as compared to Q4 in FY2014. While we are disappointed that sales and profits are going to come in slightly below expectations, we remain committed to our market-leading, customer-focused business model. We continue to redefine retailing in our chosen categories with unbeatable prices, huge range and availability, complemented by amazing service. Having delivered on all our strategic objectives through this financial year, we are confident of our ability to continue to deliver for our customers and to further drive the success of AO in the interest of all stakeholders."

For further information, please contact:

AO World plc [phone]

John Roberts

Steve Caunce

Tulchan Communications [phone]

Susanna Voyle

Michelle Clarke

 

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