Shares in AO World (AO.) lost one-third of their value after the online white goods merchant announced a bizarre profit warning on the back of lacklustre fourth quarter trading.
Chief executive John Roberts said the final quarter had, thus far, been tougher than expected in the UK and the company's full-year results would therefore fall short of market expectations. Mr Roberts appeared to suggest that management's original forecasts had been too high because of the "extra publicity" surrounding AO World when it listed around this time last year, which artificially inflated the topline. When sales then tapered off, this hit the year-on-year growth rate.
Sales in the UK are now expected to range between £470m and £475m, down from estimates of £486m, while cash profits will be around the £16.5m mark, compared with analysts forecasts around £18.6m. Furthermore, management said the loss of revenue, combined with the loss of a logistics contract and the cost of driver legislation changes will dampen the company's performance into the next financial year.
