A shoddy set of full-year results shouldn't surprise shareholders in white goods e-tailer AO World (AO.). The group issued a profit warning in February after a bout of poor trading, guiding analysts to expect UK sales of £470m to £475m for the year to March, compared with the previous consensus of £486m. Sure enough, the group reported UK sales of £471m last year, while adjusted operating profits came in at £12.7m (from £8.4m in 2014).
But AO World's domestic performance looked positively robust compared with that of the new European business. The group launched its first German website last October and reported initial revenues of £5.8m by the end of the financial year. But £4.2m in set-up costs and escalating trading losses led to an overall deficit of £12.3m on the continent. That doesn't seem to have deterred AO's bosses, who hinted at another European launch during the first half of 2016.
Overall, the group turned in adjusted operating losses of £2.2m, compared with a profit of £8.2m for the year to March 2014. The reported figures for the prior year are skewed by £15.4m of IPO costs. Broker Numis Securities expects losses of £4.7m for the current financial year, compared with adjusted pre-tax profits of £1.6m for full-year 2015.
| AO WORLD (AO.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 169p | MARKET VALUE: | £712m | |
| TOUCH: | 169-170p | 12-MONTH HIGH: | 336p | LOW: 150p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 14p* | NET CASH: | £38m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 164 | 3.7 | na | na |
| 2012 | 209 | -1.7 | na | na |
| 2013 | 275 | 8.2 | 1.6 | na |
| 2014 | 385 | -7.6 | -2.4 | nil |
| 2015 | 477 | -2.9 | -0.6 | nil |
| % change | +24 | +62 | +75 | - |
*Includes intangible assets of £14.3m, or 3.4p a share | ||||
