Electricals retailer AO World has revealed plans to ditch its Dutch business to focus on the UK and Germany after suffering widening losses in the European division.
Shares surged 15% as the group said it would shut its Netherlands arm by the end of next March and prioritise efforts in Europe on turning around its German business.
The move will see it pull out of the Netherlands less than four years after launching in the country.
There are encouraging green shoots of profitable growth across our UK businessJohn Roberts, AO World founder
Half-year results showed European underlying losses widened to 15.9 million euros (£13.6 million) from 13.8 million euros (£11.8 million) a year earlier after sales fell 3.4%.
But AO World hailed “green shoots” in the UK as like-for-like sales rose 4.5%, helping underlying interim earnings in the division lift to £7.8 million from £6.9 million.
The European woes saw overall group-wide underlying losses widen to £6.2 million for the six months to September 30, against £5.4 million a year ago.
Statutory pre-tax losses stood at £5.9 million, which marked an improvement on the £10.9 million posted a year earlier.
AO founder and chief executive John Roberts said: “There are encouraging green shoots of profitable growth across our UK business, including within our core MDA (major domestic appliances) offer and we will continue to invest to drive this further.”
On the Netherlands closure, he added: “This will enable us to concentrate on the transformation of our German business, where we have increased confidence in, and visibility of, the three core drivers of the business model that will put us on the path to profitability.”
AO World recently overhauled the management team in Europe, parachuting in staff from the UK operations to help turn trading around in the division.
It said the decision to close the Netherlands was likely to cost it around three million euros (£2.6 million).