Electrical supplier AO World sees profit skyrocket

Shares in AO World have jumped after the white goods electrical supplier revealed its profit had surged during its latest financial year.

The Bolton-headquartered group has posted a pre-tax profit of £36.4m, up from £7.6m, surpassing forecasts.

However, AO reported in its annual results to March 31, 2024, that its revenue had fallen from £1.1bn to £1bn.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, stated that it had been “a volatile ride for the company and its shareholders over the past few years”, after lockdowns saw demand surge for electrical goods and then pull back as it became clear that many customers had simply brought forward purchases.

The group’s stock price rose 4.5 per cent this morning on the results, and is up over 38 per cent in the last year.

AO World also said it was confident in its ability to reach double digit revenue growth next year, while pushing up profit before tax to between £36m and £41m, despite the ongoing macroeconomic challenges.

The company has a strong focus on keeping high levels of customer satisfaction, particularly through its one-stop delivery and installation services.

Streeter added that the firm’s future growth will be “very much reliant on the recovery in UK economic growth and consumer confidence”.

AO’s founder and chief exec John Roberts praised the group’s strategic pivot away from its non-core channels and loss-making sales.

“We have made good progress on our profit performance in FY24, which is a testament to the success of our strategic pivot to focusing on profit and cash generation,” he said.

“We are now a much simpler, more efficient business and are performing better than ever for customers, with excellent and sustainable unit economics.

“Our focus now is on delivering profitable top line growth with an ambition for double digit revenue growth in full year 2025.”