AO: First Half Growth Impacted By Supply Chain Disruption

AO World PLC, a leading European online electrical retailer, has published a post-close trading update for the six months ended 30th September 2021, advising of continued growth in a challenging operating environment. 

On a one-year like-for-like basis, Group revenues for the first half increased c.5% against strong comparatives during the initial Covid lockdown.  In the UK, revenues over the period increased c.6%, with growth impacted by the nationwide shortage of delivery drivers and ongoing disruption in the global supply chain. In Germany, revenues in local currency rose c.3% despite the competitive online market.  The challenging market dynamics in both the UK and Germany resulted in lower volumes than expected which affected operational leverage, particularly in the second quarter. 

Given the exceptional operating environment over the past 18 months, our performance over the comparable period in H120² provides a more meaningful overview of our business performance than a comparison with H121².  Therefore, on a two-year like-for-like basis,  Group revenues grew c.66%, with our UK business growing c.63%.  Like-for-like revenues in Germany grew c.84% over the same period.

Whilst we continue to see industrywide issues relating to ongoing supply chain disruption, we have implemented measures to help mitigate these challenges in our logistics operations.  We expect revenue growth in the second half of the year to record a similar growth rate to the first half of this year and anticipate that Group Adjusted EBITDA³ for the full year to be between £35m and £50m, with profits more heavily weighted than usual towards the second half of the year driven by the peak trading period.

Whilst the macro-outlook remains uncertain, we have confidence in the proven resilience of our business model and are well placed to meet customer demand in our peak third quarter sales period. 

AO World will announce its interim results for the half year on Tuesday, 23 November 2021.⁵

Source : AO World PLC

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