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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  AO World plc    AO.   GB00BJTNFH41

AO WORLD PLC

(AO.)
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AO World : Anticipating Brexit disruption, AO World doubles warehouse capacity

11/24/2020 | 05:30am EST
AO distribution centre in Crewe, Cheshire

LONDON (Reuters) - British online electricals retailer AO World, whose sales have soared during the pandemic, has doubled its warehouse capacity to cope with any supply chain disruption at the end of Britain's Brexit transition period with the European Union on Dec. 31.

AO sells washing machines, fridges, cookers and televisions, as well as mobile phones and printers.

Its founder and chief executive John Roberts said the main challenge for the group from Brexit was supply chain disruption rather than overall market demand.

"We've about doubled our warehousing capacity and we've placed orders to hopefully fill that capacity, to insulate customers from that disruption," he told Reuters on Tuesday. "But we can't give any guarantees on that."

AO was already seeing some supply chain disruption at ports such as Felixstowe in eastern England, he said.

Britain is 37 days away from the end of a Brexit transition period, after which EU rules that ensure free movement of goods between Britain and the EU will cease to apply.

Talks on how to replace EU rules and keep goods flowing freely have yet to reach agreement.

Roberts said disruption from Jan. 1 was unlikely to be for just a few days. "Supply chains tend to take a bit of time to work through," he said.

SALES SOAR

AO, which operates in Britain and Germany, swung to a first-half profit after a 53.2% jump in revenue.

The group has benefited from people working from home during the crisis, which has driven demand for electrical appliances and home office products.

AO has also benefited from store-based rivals being closed during national lockdowns.

Its shares, which have more than quadrupled in value this year, were down 4.8% at 0951 GMT.

Pretax profit was 18.3 million pounds ($24.5 million) in the six months to Sept. 30 versus a loss of 5.9 million pounds a year earlier.

Revenue was 717 million pounds, and growth rates have increased in the third quarter.

"This has been a half year like no other. I believe our market has changed as a result, forever. Online is now the dominant retail channel for customers and manufacturers alike," said Roberts.

He forecast a record Black Friday (Nov. 27) performance from AO and for the overall electricals market.

He also said AO's German business was on track to achieve monthly profitability on a core earnings basis during the peak trading period, and was expected to be profitable from full year 2022.

($1 = 0.7476 pounds)

(Reporting by James Davey; Editing by Kate Holton, Keith Weir and Jan Harvey)

By James Davey


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AO WORLD PLC -3.87% 347.5 Delayed Quote.-12.04%
EURO / BRITISH POUND (EUR/GBP) -0.35% 0.8866 Delayed Quote.-0.46%
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Financials
Sales 2021 1 593 M 2 174 M 2 174 M
Net income 2021 - - -
Net cash 2021 64,3 M 87,7 M 87,7 M
P/E ratio 2021 -
Yield 2021 -
Capitalization 1 641 M 2 239 M 2 239 M
EV / Sales 2021 0,99x
EV / Sales 2022 0,87x
Nbr of Employees 3 000
Free-Float 60,1%
Chart AO WORLD PLC
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Technical analysis trends AO WORLD PLC
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 4
Average target price 401,25 GBX
Last Close Price 361,50 GBX
Spread / Highest target 46,6%
Spread / Average Target 11,0%
Spread / Lowest Target -37,8%
Managers and Directors
NameTitle
John Charles Roberts Chief Executive Officer & Executive Director
Geoffery Ian Cooper Non-Executive Chairman
Jonathan Mark Stephen Higgins Chief Financial Officer & Executive Director
Christopher John Hopkinson Non-Executive Director
Marisa-Luisa Cassoni Senior Independent Non-Executive Director
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