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AO World points to challenging markets as losses narrow

AO World has reported group EBITDA of £6.9 million down from £7.4 million last year. The online electrical retailer revealed its financial results for the six months ending 30 September this morning, posting increased revenue of 9.9% to £404.2 million. UK sales were up 5.7%, while European revenue increased 35%, impacted by changes to its German operating model.

Group operating losses narrowed to £11.7 million (down from a loss of £12 million in 2017), while its total number of customers is close to six million across all territories.

“This has been a half of continued delivery against our long-term strategy, thanks to a strong offer for customers. While our core UK and Germany MDA markets have been challenging, with the UK MDA market becoming tougher than expected, we take encouragement that we are at least maintaining market share in this core category in the UK and growing significantly in Germany,” said AO CEO Steve Caunce.

“While we faced some operational challenges with our driver model in Germany which had an effect on our second quarter we expect to return to our targeted growth levels in Germany over the next few months,” he continued. “Our peak trading period began on 9 November with the launch of our biggest ever Black Friday and I remain confident of achieving long-term sustainable growth across the Group. We expect full year results to fall within the range of Board expectations, albeit more second half weighted than previously anticipated.”

Earlier this month, AO announced its acquisition of Mobile Phones Direct (MPD) for £32.5 million. Following the deal, AO expects its mobile proposition to significantly increase in “scale and sophistication”, elevating it from the handsets-only business it currently operates as part of its wider consumer electrical range.

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