AO swings back into black as profit focus pays off

AO reported full-year profit before tax of £7.6m versus a loss of £10.5m the previous year, on sales down 17% to £1.14bn.

The pureplay retailer said the performance showed “excellent progress against the plan to pivot the business to focus on profit and cash generation”.

AO, in which tycoon Mike Ashley’s Frasers is now the biggest investor, said it had delivered a “strategic pivot” as it pulled out of some activities, and achieved operational efficiencies and overhead reductions ahead of its original plans. 

The retailer said it was confident of delivering 5% EBITDA in the “short term” and returning to top-line growth in the “medium term”.

AO founder and chief executive John Roberts said: “We are delighted with the demonstrable progress that we’ve made with the strategic realignment of AO towards profitability and cash generation.

“The significant improvement in our profit performance speaks for itself and has been achieved by focusing on our core strengths and simplifying our operations, while still delivering the outstanding customer service for which we’re famous.

“Looking ahead, we intend to continue with this focus whilst also retaining the flexibility to drive growth through disciplined investment at the right pace and at the right time.

“Over five million new customers experienced the AO Way over the last three years, during which time we’ve maintained our ’excellent’ Trustpilot rating, making AO the most trusted electricals retailer in the UK.”