AO World has revealed that its loss nearly doubled during its financial year ending March 31, as earnings in its core UK market fell while its loss in Europe widened.
Despite this, the online electricals retailer booked a double-digit rise in revenue and said it was on track to make that business profitable by 2021.
Pre-tax loss came in at £13.5 million pounds for the retailer’s financial year, a steeper loss compared to the £7 million loss booked the prior year.
On an adjusted EBITDA basis, AO World recorded a £3.4 million loss, also wider than the £2.1 million recorded last year and better than analysts’ average forecast of a £4 million loss.
Meanwhile, adjusted UK earnings dropped 7.4 per cent to £22.6 million, which the retailer attributed to higher marketing costs and competitive pricing.
For its European markets – Germany and The Netherlands – AO World’s adjusted EBITDA loss improved by being narrowed to €29.6 million (£25.99 million), compared to €31.5 million the previous year, as the retailer continued to invest in its European expansion.
Overall, revenue rose 14 per cent to £796.8 million, thanks to an 8.1 per cent rise in UK revenue £680.8 million and a 55 surge in Europe revenue on a constant-currency basis.
“The new financial year has started well in both the UK and Europe, with UK revenue growth returning to double-digit levels against prior year,” chief executive Steve Caunce said.
“Whilst we remain cautious on outlook given economic and competitive pressures on the UK electricals market we are confident of achieving our stated goals of future growth in the years ahead.”