AO World increases profit outlook for fourth time after cutting costs

AO World has lifted its profit outlook again as it continued to benefit from recent cost-cutting efforts.

The online white goods retailer saw shares lift by more than a tenth in early trading after the fourth upgrade since last summer.

However, the recent improvements in outlook followed a sharp slump in its share price from the start of 2021 as pandemic-boosted growth slowed down.

The retailer added that worries over a negative effect from continued global economic uncertainty and the tough consumer backdrop “have not materialised to the extent envisaged”.

As a result, the group now expects to reach the top end of previous profit guidance, while revenues are due to have hit £1.13 billion for the year to March.

John Roberts, chief executive officer and founder, said: “We are encouraged by the work undertaken to pivot the business during the financial year 2023.

“AO enters the new financial year with net funds on the balance sheet, a robust trajectory, and full confidence in our ability to deliver on our medium-term profit guidance of 5% adjusted EBITDA (earnings before interest tax, depreciation and amortisation).

“We anticipate that our progress in improving both operational cost efficiencies and margin in full-year 2023 will continue through the next 12 months and beyond.”

The group’s shares were up 11.4% at 75.4p on Friday morning.