AO World posts sales lift but warns of slow summer trading
The e-commerce business has been expanding in Europe.
Online retailer AO World has posted a bump in sales, but warned that demand had fallen heading into the summer.
AO World delivered UK revenue growth of 8.0% in the period from April 1 to June 30. In Europe, sales were up 46.2% in constant currencies.
However, the e-commerce retailer said that it had experienced a slowdown in sales during June due to weaker demand.
The retailer has also suffered a kick-back from its investors over pay.
Results from AO World’s annual general meeting showed 13% of shareholders voted against its remuneration policy, and 13% voted against its share incentive plan.
Following the results update, AO World’s shares were up 2.5% or 3.6p to 148p.
Analysts at Jefferies said: “The group confirmed today that it remains on track to deliver both against its long-term strategic plan and its expectations for the current year.
“With UK wage growth improving but still failing to impact in any major way consumer confidence, we still don’t see an inflection in consumers’ propensity to spend.”
In June, AO World reported that its annual losses had nearly doubled due to its investment into its European expansion.
The firm reported group-wide pre-tax losses of £13.5 million for the year to March 31 against losses of £7 million the previous year.
Neil Wilson said the AO World investors would be watching the European arm of the business closely
“In such a highly commoditised sector margins are thin and the European business is haemorrhaging cash,” he said.
“June’s full-year results showed losses widened despite strong revenue growth.
“Profits at the UK division also fell as it invests heavily in marketing.
“Revenue growth alone is not enough but management’s confidence should reassure investors for the time being.”