Exchange rates hit AO World’s European business as revenues continue to climb

Online electrical retailer AO World plc has posted a EBITDA loss for the six months to September 30 2017, despite seeing an uptick in overall revenues and website sales.

The Bolton-headquartered firm grew its total revenues year on year by 13.3% to £368m in its latest half-year results. Website sales in the UK rose 9.9% to £282.5m.

The firm’s groupwide adjusted EBITDA came in at a loss of £6.3m, compared to a £1.5m profit in 2016.

In the UK, AO World’s adjusted EBITDA for the period was £7.4m, down from £13.1m and impacted mainly by increased marketing expenditure, the company said.

However in Europe, adjusted EBITDA was a loss of £13.7m. In 2016, it was a £11.6m loss. Foreign exchange rates were reported to have had a negative impact.

Groupwide, the firm recorded an operating loss of £12m. The figure, AO World said, was due to increased brand expenditure in the UK and investment in Europe, in line with its ongoing strategy.

As of September 30, group cash stood at £72.3m.

The CEO of AO World plc, Steve Caunce, said: “Our European operations continue to perform in line with the plan we’ve previously set out notwithstanding the adverse impact of foreign exchange rates on our reported performance.

“The AO culture is firmly embedding in Germany and The Netherlands and our foundations for growth are fully established.”

He added: “We are also building a number of exciting new vertically integrated capabilities under the AO banner, including our state-of-the-art recycling facility in Telford.”

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