AO World has managed to defy analysts and stem the tide of losses thanks to strong UK sales.
In the year to March 30, the electricals retailer posted a revenue boost of 17.0 per cent to £701.2 million.
This was driven by a jump in UK sales of 12.7 per cent to £629.7 million and healthy online sales growth of 14.5 per cent to £557.9 million.
Sales in Europe also saw healthy growth of 52.3 per cent on a constant currency basis to £71.5 million.
Despite these promising sales figures, the group’s profitability still struggled, leading analysts and the stock market to express little faith in the retailer.
The group’s adjusted EBITDA losses were reduced by 46.2 per cent to £2.1 million.
Although UK profitability significantly improved with UK adjusted EBITDA up 41.7 per cent, this was offset by poor European performance.
Dwindling sales in Germany and The Netherlands saw EBITDA losses increase by 25.5 per cent to £26.5 million.
The retailer also saw its operating losses increase from £10.6 million to £12 million over the year, which it further attributed to poor EU performance.
AO stated that its outlook for the coming year was in line with market expectations, despite predictions that the growth rate would slow “significantly”.
Despite continued losses chief executive Steve Caunce remained positive about AO‘s performance.
“It‘s been another year of great progress for AO with the UK seeing improved profitability and we have continued to build a solid platform for future growth,” he said.
“Our customer service metrics remain exceptional across all of the countries in which we operate because we make it our mission to care more and we continue to innovate to create the best customer experience for tomorrow.
“This has helped us to continue to gain market share in our categories and countries, notwithstanding the challenging trading environment in the UK.
“We remain as committed as ever to doing business ‘The AO Way’ and continuing to deliver outstanding results for our customers, our people, our supplier partners and our investors.”