// AO World remains in the red with half-year pre-tax losses of £5.9m, although this is better than last year’s £10.9m loss
// AO World plans to shut its Netherlands arm and focus efforts on turning around its German business
// Meanwhile, there were “green shoots of profitable growth” in the UK, with like-for-likes up 4.5%
AO World has hailed “green shoots of profitable growth” in its UK business, but revealed plans to scale back its European arm amid widening losses in the division.
It comes as the online electricals retailer’s half-year report for the period ending September 30 indicated it was still in the red, with overall group-wide underlying losses widening to £6.2 million compared to £5.4 million a year ago.
Statutory pre-tax losses stood at £5.9 million, although this marked an improvement on the £10.9 million posted a year earlier.
READ MORE:
- AO World losses widen to £18.9m
- AO World founder: No-deal Brexit planning a “waste of money”
- AO World trials rental service, mulls expansion to in-home services
AO World’s half-year results also showed European underlying losses had widened to €15.9 million (£13.6 million) from €13.8 million (£11.8 million) a year earlier, after sales fell 3.4 per cent.
As a result, the retailer said it planned to shut its Netherlands arm by the end of March and focus efforts on turning around its German business following a review of its European division.
The move will see AO World pull out of The Netherlands less than four years after launching in the country.
However, in the UK, like-for-like sales rose 4.5 per cent, helping underlying interim earnings increase to £7.8 million from £6.9 million.
“There are encouraging green shoots of profitable growth across our UK business, including within our core MDA (major domestic appliances) offer and we will continue to invest to drive this further,” AO founder and chief executive John Roberts said.
On the closure and withdrawal from The Netherlands, he added: “This will enable us to concentrate on the transformation of our German business, where we have increased confidence in, and visibility of, the three core drivers of the business model that will put us on the path to profitability.”
AO World recently overhauled the management team in Europe, parachuting in staff from the UK operations to help turn trading around in the division.
It said the decision to close The Netherlands was likely to cost it around €3 million (£2.6 million).
Click here to sign up to Retail Gazette‘s free daily email newsletter
