Cost-cutting starts to deliver dividends for AO World

AO World has reported higher than expected profits for last year after a successful cost-cutting campaign caused the online electrical retailer to exceed expectations.

The Bolton-based company implemented a raft of rationalisations after reporting a loss of £37m last March, ending its loss-making liaison with Tesco, as well as shuttering its German division and laying off a slew of senior and middle management. The moves were expected to save up to £30m a year by 2024.

The retailer saw sales drop 17.2pc over the three months to Dec 31, compared a year earlier, which the company had forecast. AO now expects to deliver adjusted earnings of over £30m as it benefits from reduced costs.