Half-year revenues at online electricals retailer AO have increased by more than 50 per cent, as it sees a ‘lasting shift’ of people shopping online.
Bolton-headquartered AO expects revenues for the period to be around £715m, an increase of around 57 per cent year-on-year.
AO said they have “seen a lasting step change in online penetration” as sales in Q2 maintained the ‘momentum’ in Q1, despite the rivals reopening bricks-and-mortar stores after lockdown restrictions were lifted.
In a trading update for the six months to September 30, the retailer said UK revenue rose by around 54 per cent in the period, while Germany revenue grew by some 83 per cent.
AO founder and group chief executive John Roberts said: “The last six months of trading have been like no other during my two decades in the business.
“AO was in good shape coming into this financial year and the global, structural shift in customer behaviour to online, accelerated by Covid, emphasised our strengths.
“The progress that we’ve made in Germany gives us the platform and confidence to grow. We remain excited by the opportunities ahead and ambitious to realise them.”
He added: “While we remain mindful of the uncertain economic climate caused by the pandemic and Brexit, we are on track with plans and well set for our biggest ever peak trading period in the UK and Germany.”
The group said its German business performance reflects the changes it made over the last 18 months, as well as the impact of Covid-19 on shopping habits.
The group is due to announce its half-year results on November 24.
Russ Mould, investment director at AJ Bell, said AO has delivered "what many people thought was unachievable".
“The first quarter benefitted from the first wave of lockdown, shifting people’s buying habits online. Being at home for a long period drove increased interest in the types of products sold by AO such as fridge-freezers and washing machines.
“The second quarter saw competitors reopen stores and consumers return to physical shops, therefore testing AO’s ability to sustain its positive sales momentum seen in the previous three months."
He continued: “A year ago, few people would have bet on AO being one of the big retail success stories in 2020 but the lucky few that did back this horse would now be minted. Its share price is now up 300 per cent in the past 12 months.
“Ongoing lockdown restrictions provide the tailwind that AO needs as it continues its path towards making a profit. And herein lies a big issue – everything to date has been about driving sales growth but the business hasn’t really made any proper money. That could soon change.
“Results for the year to 31 March 2020 saw a tiny pre-tax profit of £1.5m which was the first proper earnings breakthrough for the business. Analysts now expect pre-tax profit to start motoring ahead, with £36.6m forecast in the current financial year and £43.6m in 2022.”
