AO sees greater losses as cost-of-living crisis hurts sales
Online electrical retailer AO has posted its interim results revealing an operating loss of £9m, over three times as much as this time last year.
The results, which encompass the six months up to September 2022, exposed the impact the cost-of-living crisis is having on consumer spending power.
Revenue was down £115m from 2021, while loss before tax saw an increase of 168% to £12m.
AO cited a reduction in the electrical market, as well as actions taken to remove loss-making sales and non-core channels, as reasons behind a year-on-year revenue decline of 17%.
The retailer is planning to end its operations in Germany, although it now expects this process will cost the company “around zero”, down from its previous estimation of £15m.
John Roberts, AO’s founder and chief executive, highlighted an “extraordinarily difficult macro-economic state”.
However, AO was pleased to state that it had welcomed over 410,000 new customers, and saw an increase in repeat customer purchase rates.
It also said that its customer satisfaction scores remained outstanding, with over 370,000 Trustpilot reviews averaging over 4.6 out of 5 stars.
AO has an 18% market share in major domestic appliances and holds a 34% overall market share.
Roberts added: “During the first six months of the year, we’ve made good progress with our strategic realignment as we focus on profitability and cash generation, all of which is yielding the results we expected.
“We’ve now closed the loss making and cash consumptive parts of our operations meaning that remaining UK business is cash generative”.
“While the short-term outlook remains challenging, I’m confident that our strategy is the right one, as position ourselves to be the UK’s most trusted electrical retailer we look to the future with cautious optimism”, he added.