AO World, which operates AO.com [IRDX RAOC] and sister websites in Germany and Holland, today reported strong sales in the UK and in its European business in the first quarter of its financial year. The company said its expectations for full-year sales had not changed as a result of the vote to leave the European Union.
Chairman Richard Rose said: “We are mindful of recent economic uncertainty following Brexit and its potential effect on consumer confidence and the foreign exchange exposure of our suppliers but, despite this, our expectations for the UK business, over the whole financial year, remain unchanged.”
UK sales on AO.com grew by 29% between April 1 and June 30, while overall UK revenues, which also include white label sites operated on behalf of third parties, grew by 25% – with sales continuing to grow after the end of the quarter. European revenues grew by 101%.
The pureplay electricals retailer started by selling white goods online and has since added audio visual equipment in the UK, while launching white goods sales in Germany. Now it is expanding its range in both countries, adding computers in the UK and audio visual goods in Germany.
Today the company said that its roll-out into the Dutch market continued, with deliveries now underway from its regional distribution centre in Bergheim.
“We expect our operations to be fully up and running from there by the end of our second quarter, and we look forward to accelerating growth over the second half of the year as a result,” said Rose. “Our expectations for the European business, over the whole financial year, remain in line with our previous guidance.”
Connor Campbell, senior market analyst at www.spreadex.com, said the retailer had reassured investors that it was on track to meet full-year targets despite the impact of Brexit.
“While rivals like Dixons Carphone and the Sainsbury’s-bound Home Retail Group struggle with their bricks and mortar operations the online-only AO World is thriving,” he said.
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AO.com (formerly Appliances Online) was the first website of parent group DRL Limited who also sell kitchen appliances through partnerships with Boots, Next, House of Fraser, B&Q and Iceland. In 2009 ao.com acquired distribution company Expert Logistics enabling it to deliver its own products. (more…)