AO World returns to profit after operational changes
Electrical retailer AO World has recorded a return to profitability for the 2023 financial year, as a number of operational changes appear to pay off.
For the year ending 31 March 2023, the retailer recorded a statutory profit before tax of £7.6m, compared to a loss of £10.5m in 2022.
However, AO recorded a fall in revenue of 17%, down from £1.37bn in 2022 to £1.14bn.
The retailer credited its performance to the delivery of its “strategic pivot”, having exited some business lines and delivering “operational efficiencies and overhead reductions” ahead of its original timeline.
AO said it had simplified its UK operations, focusing on more profitable lines of business that fit its core model.
The retailer also completed its exit from Germany with a “minimal cash impact”.
AO said it remains a market leader in major domestic appliances, with a 16% market share and a 30% online share. It added that over 800,000 new customers had used AO during the 2023 financial year.
Looking at the current financial year, the retailer said it is confident to deliver on its earnings targets in the short term and return to top line growth in the medium term.
AO said its strategy is now to invest “prudently” in the business, seize “significant market opportunities”, and leverage its growing customer base.
AO’s founder and chief executive, John Roberts, said: “We are delighted with the demonstrable progress that we’ve made with the strategic realignment of AO towards profitability and cash generation. The significant improvement in our profit performance speaks for itself and has been achieved by focusing on our core strengths and simplifying our operations, while still delivering the outstanding customer service for which we’re famous.
“Looking ahead, we intend to continue with this focus whilst also retaining the flexibility to drive growth through disciplined investment at the right pace and at the right time.”