AO sales momentum continues into new financial year

Online electricals retailer has said that its trading momentum at the end of its last financial year has carried on into the new fiscal period.

Reporting a trading update for the four months ended 31 July 2020, the business said it recorded strong year-on-year revenue growth in the UK of 58.9% to £401.3 millon. There was also a 91.5% jump in sales in Germany to €74.3 million – but this does not include figures related to its recently disbanded operation in the Netherlands.

In a preliminary results announcement in July, AO reported revenue growth of 15.9% for the year ending 31 March, which helped drive profit up by 53.6% to £19.6 million. It said at the time that it had performed well during the pandemic, when physical shops of its rivals in the sector were temporarily closed for normal trade.

Dixons Carphone – which runs fellow electricals business Currys PC World – reported significant growth in online sales during the early part of the lockdown period, with eCommerce said to have recovered two-thirds of the lost store sales it encountered due to temporary closures.

“The demand for AO's products and services has been sustained since competitor stores started to reopen at the beginning of July,” AO said in today’s statement.

“This reaffirms our belief that this is a structural shift in demand where customers have found a better way to shop the electricals category. We are investing in our capacity and capability to serve customers ever more in the AO way.”

The retailer said it remained mindful of the “significant level of economic and customer uncertainty driven by both Covid-19 and the prospect of Brexit in December” and the potential impact this will have on big ticket items such as electricals.

Interim results are currently scheduled for release in November, when further updates on the company’s performance will be revealed.