Losses rise at AO World in competitive UK market

ONLINE ELECTRICALS retailer AO World has seen annual losses nearly double amid competitive trading in the UK and after hefty investment in European expansion.

The firm reported group-wide pre-tax losses of £13.5 million for the year to March 31 against losses of £7 million the previous year. It said operating losses widened to £16.2 million from £12 million previously, with earnings in the UK plunging 25.4 per cent to £11.6 million after it ramped up spending on marketing and due to a “consistently competitive pricing environment”.

It remained deep in the red across Europe, where it has been expanding rapidly, although losses narrowed slightly to £26 million from £26.5 million and it saw revenues in the region surge 54.8 per cent to £116 million. AO World also enjoyed an 8.1 per cent jump in UK revenues to £680.8 million, with website sales up 8.7 per cent to £606.6 million.

The group added it remained on track to make its European business profitable by 2021.

Chief executive Steve Caunce said: “The new financial year has started well in both the UK and Europe, with UK revenue growth returning to double-digit levels against the prior year.

“Whilst we remain cautious on outlook given economic and competitive pressures on the UK electricals market, we are confident of achieving our stated goals of future growth in the years ahead.”

The group said it had reined in marketing spending across the UK over the second half.