// AO raises profit guidance despite 17.2% sales drop at core UK business
// The retailer said revenues were lower than last year but in line with expectations
AO has increased profit expectations, despite a 17.2% decline in sales at its core UK business in the third quarter.
The electricals retailer said this was in line with management expectations.
AO also said its turnaround strategy is off to a strong start after lifting guidance for the year to March.
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The turnaround plan was revealed in November to reduce costs and improve margins and this was gaining traction, which meant that earnings would be in the range of £30 million to £40 million rather than the previous estimate of less than £30 million.
AO said revenues were 17% lower than last year but in line with expectations.
“We remain cautiously optimistic and yet mindful of the continuing macroeconomic uncertainty and tough consumer environment,” AO said.
The update comes after AO warned on the continued impact of the cost-of-living crisis.
Despite this, the retailer said in November that it will focus on profitability over growth.
AO made a statutory pre-tax loss of £12 million during the six months to September 30, widening from £4 million during the same period a year ago. Its operating loss trebled to £9 million.
It remained in the black on adjusted EBITA basis although that slipped 11% to £9 million.
