Bolton-based retailer AO has returned to the black, despite a drop in sales, thanks to its cost-cutting efforts under its turnaround plan.
The online electricals retailer posted a pre-tax profit of £7.6m in the year to 31 March 2023, up from a £10.5m loss the year before.
However, sales plummetted 17% from £1.37bn to £1.14bn over the period due to weaker consumer sentiment and as the retailer pulled back on non-core channels and loss-making sales.
“Our strategy now is to invest prudently in the business, seize the significant market opportunities that we see in front of us, leveraging our growing and loyal customer base,” it said.
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The retailer, which made an EBITDA margin of 4%, is confident of delivering on its 5% EBITDA margin ambition in the short term and returning to top line growth in the medium term.
Chief executive John Roberts said: “We are delighted with the demonstrable progress that we’ve made with the strategic realignment of AO towards profitability and cash generation.
“The significant improvement in our profit performance speaks for itself and has been achieved by focusing on our core strengths and simplifying our operations, while still delivering the outstanding customer service for which we’re famous.
“Looking ahead, we intend to continue with this focus whilst also retaining the flexibility to drive growth through disciplined investment at the right pace and at the right time.”
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