AO.com posts operating loss of £9 million but remains bullish about European prospects

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Online major domestic appliances retailer AO World plc has announced its unaudited financial results for the six months ended September 30 2015.

While total revenue for the period increased by 21.7% to £264.3m (2014: £217.1m), website sales for the UK rose 23.7% to £214.8m and total UK revenue went up 14.5% to £248.6m, the Group posted an operating loss of £8.9m.

AO.com says this reflects its ongoing investment in German operations and start-up costs in further European territories, investment in marketing to increase brand awareness and investment in overheads to drive margin and ensure resilience across the business.

John Roberts

The company added that it is pleased with progress in the audio visual and small domestic appliances categories in the UK, and UK repeat business metrics have improved during the period, and that the business is ‘on track’ with progress against its long term strategic goals.

Chief executive officer John Roberts (pictured) commented: “AO World has made good progress in the first half, continuing to deliver on our long-term strategy. 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 improve repeat business metrics.

“Our customer proposition remains strong – our unbeatable prices, huge range and amazing service mean our customer satisfaction levels have remained exceptional and we will continue to focus on this. In Germany, our first international market, we are continuing to build scale and remain confident that our business model and customer proposition are working as well on Mainland Europe as they have in the UK. Our confidence means that we are now ready to move into the Netherlands, helping to leverage our German asset, and we continue to review other adjacent markets.”

He continued: “Looking ahead, it is clear that the momentum we built in the second quarter has set us up well for the full year. We remain as confident as ever that the market dynamics are moving in our favour as a pure-play digital operator in a market where customers continue to move rapidly online and our excellent service will only accelerate this. Against that backdrop we are well placed to deliver sustainable long-term growth.”

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