AO World, a British online consumer electrical retailer, has raised its expectations for the full year after returning to profit in the first half. Despite a challenging market for discretionary spending, reduced costs and improved margins offset a fall in sales. Inflation is falling while borrowing costs are high, the housing market is slowing, and there is pressure on big-ticket expenditure in the UK.
AO, a seller of household appliances and electronics, reported a pretax profit of 13 million pounds in the six months to Sept. 30, compared to a loss of 12 million pounds in the same period last year. This was despite a 12% fall in revenue to 482 million pounds. For the full 2023/24 year, the company forecasts a pretax profit of 28 million pounds to 33 million pounds. This is up from previous guidance of around 28 million pounds. It also expects full-year revenue to decrease by around 10%.
The company expressed its intention to continue investing prudently in the business and seize significant market opportunities. In June, AO formed a strategic partnership with Mike Ashley’s Frasers sportswear and fashion group, making Frasers its biggest shareholder with a 22.1% ownership stake. AO shares have increased by an impressive 60% year-to-date.
Overall, AO World has been able to take measures to offset a decline in sales and return to profitability during the first half of the year. The company remains optimistic about its future prospects and plans to continue investing in its business while seizing significant market opportunities ahead.