AO World plc Trading Statement (9522A)
30 March 2017 - 5:01PM
UK Regulatory
TIDMAO.
RNS Number : 9522A
AO World plc
30 March 2017
AO World plc
PRE-CLOSE STATEMENT
30 March 2017
AO World plc ("the Company" or "AO"), a leading online retailer
of electricals in the UK, today gives a pre-close trading update
for its full financial year; the 12 months to 31 March 2017
("FY2017").
Full year trading for FY2017 is expected to be in line with our
range of expectations, with Group revenue expected to be c.GBP700m,
up c.17% year-on-year. Our existing Adjusted EBITDA guidance range
is tightened to GBP-2.4 to GBP0m and Group cash as at 31 March 2017
is expected to be at least GBP27m.
UK
In our UK business, revenue is expected to be c.GBP629m, with
expected own-brand revenue growth of c.16% year on year, with
own-brand revenue growth of 10% in Q3 and expected growth of c.13%
in Q4 (as against the same quarter in the prior year). Brand
awareness has continued to improve, and we believe this will be
further underpinned by becoming headline sponsor to ITV's
"Britain's Got Talent" 2017. We also launched into a new category,
computing, which has started to trade well. We have also
successfully started recycling Waste Electrical and Electronic
Equipment (WEEE) through our facility in Telford.
Europe
In our Europe business, revenue is expected to be c.GBP71m, with
expected Q4 growth of c.58% in local currency. During H1, we
consolidated our operations in Bergheim which has given us a solid
base for the business to grow, and allowed the anticipated
acceleration of growth during H2. During the period, we have
successfully launched the audio visual category in Germany and in
March 2016, we started trading in the Netherlands.
Outlook
The Board broadly expects the patterns of trading seen in the
second half of FY2017 to continue into the year ahead, with UK
business profits largely being reinvested in our European
operations.
The UK business will continue to benefit from positive
operational leverage as we scale and grow, increase brand awareness
and deliver our 4C's strategy. The Board continues to be cautious
given the uncertain UK economic outlook, currency impacts on
supplier pricing and the possible effect on consumer demand.
In our Europe business, we are on track to achieve a positive
Adjusted EBITDA run-rate* and revenue run-rate* of c.EUR250m by
FY2021 (in existing territories of Germany and Netherlands) with
operational leverage, which is expected to be generated largely
from warehousing and delivery, weighted largely to the latter
period. We expect limited further capex to realise plans in
existing territories.
AO has today separately announced a placing of up to 9.99% of
its share capital.
Our next update to the market will be our preliminary statement
on 6 June 2017.
* Adjusted EBITDA is defined by the Group as profit/(loss)
before tax, depreciation, amortisation, net finance income and
"adjustments"
- Adjustments is defined by the Group as set up costs relating
to overseas expansion and share-based payment charges / credits
attributable to exceptional LTIP awards which the Board consider
one-off in nature
- Run-rate means one month's figures annualised
For further information, please contact:
AO World plc +44 (0)1204 672400
Mark Higgins ir@ao.com
Chief Financial Officer
Tulchan Communications +44(0) 20 7353 4200
Susanna Voyle ao@tulchangroup.com
Michelle Clarke
This information is provided by RNS
The company news service from the London Stock Exchange
END
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