AO World said sales and margins improved in its last full year, driven by strong trading at its fledgling European business and reduced advertising spend.  

The electricals specialist said in a post-close update that total sales would be up around 14% year on year to ÂŁ796m in the 12 months to March 31 – slightly above the mid-point of analysts’ expectations. 

UK revenue for the year is expected to be 8% higher than last year, reaching ÂŁ680m.

It said group adjusted EBITDA loss is expected to come in around the middle of the range.

At the interim mark, AO reported operating losses of ÂŁ12m, compared with ÂŁ2.8m the previous year, which it put down to UK marketing spend and European expansion investments.

The retailer said growth was achieved in its fourth quarter, “in what remains a competitive market”. 

It said: “When compared to this period in the previous year we have undertaken relatively less promotional activity which has supported gross margin.”

The group’s European operations generated sales growth of 55% during the period.

Commenting on this, the etailer said: “As a result of our strong momentum we have now reached an inflection point in the financial performance in these existing Europe operations and expect to see further progress as we move forward.”

AO is expected to report preliminary results on June 5.

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