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AO World unveils 22% sales growth and unveils plans to launch in the Netherlands

AO World says its plans are on track despite pre-tax losses

AO World says its plans are on track despite pre-tax losses

The company behind ao.com today unveiled sales up by more than a fifth, and said it plans to launch in the Netherlands next spring. But at the bottom line, it reported losses of £8.9m.

AO World, which also operates ao.de in Germany, said that total revenue grew to £264.3m in the six months to September 15, 21.7% higher than at the same time last year. In the UK, ao.com website sales stood at £214.8m, 23.7% up on the same time last year. Total UK revenue, which also includes a number of white label sites, was 14.5% higher than last time at £248.6m. In Germany, sales came to €21.7m in the first half. While the UK operation was in profit to the tune of £1.3m at the operating profit level, European operations reported losses of £10.2m. Bottom-line pre-tax profits of £8m were down from a pre-tax profit of £0.8m at the same time last year.

The company said the second half had started well, and that the UK business, where net promoter scores (NPS) reached more than 80, was on track. During the first half it gave the customer the ability to track their orders and manage their account online. It has also invested in content and has added 3D animation product reviews. “Our aim,” it said in its statement, “is to become the destination for information; helping the customer decide what they need and also offering suppliers an innovative platform to display and differentiate their technologies; all of which is underpinned by a market-leading delivery service.”

During the half-year it also added new ‘outbases’, where smaller amounts of stock are held locally for fast delivery, in Basildon and Heywood, Manchester, to its UK logistics network.

In Germany, where NPS is still higher than in the UK, the company says early success has given it confidence to invest in marketing to drive sales. Now the company says it will start trading in the Netherlands in the spring, and will start setting up in this financial year. There it will run a small call centre and outbase, but stock, warehousing and the ecommerce operations will be dealt with from a regional office in Bergheim, Germany.

John Roberts, chief executive, said AO World had delivered on its long-term strategy in the first half of the year – and he said that as a pureplay, AO was benefitting from market dynamics as “customers move rapidly online”. “We have continued our mission to redefine retailing in our chosen categories and we are winning market share in all those categories. The AO branded UK retail business has increased revenue by 23.7%, showing a marked improvement in the second quarter of the year compared to the first.

“Our brand awareness has increased significantly following successful investment in marketing, bringing in new customers and helping us to improve repeat business metrics.”

Image: © Mark Waugh / markwaugh.net

 

 

 

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