Online electricals retailer AO World has notched up record annual profits as it cheered the success of its membership scheme and surging sales.
The group reported a better-than-expected 32% rise in underlying pre-tax profits to £45 million for the year to March 31.
Including its recently acquired Music Magpie business, underlying profits rose 27% to £44 million.
The group saw like-for-like sales lift 7% to £1.11 billion and said it was “confident” of another sales rise in the new financial year.
Sales were boosted by the deal to buy Music Magpie last October for around £10 million, with AO World saying this added £30 million to revenues.
It also hailed its membership scheme for helping drive sales, as well as moves to broaden its product range to about 9,000 items.
But the group is facing a higher staff bill from the Government’s move to increase national insurance contributions and the recent minimum wage hike, revealing recently it expects about £8 million in extra costs.
AO World said: “Despite the wider macroeconomic challenges, particularly employment cost increases, our objectives remain unchanged and we are confident in our ability to continue to grow revenue, alongside group adjusted pre-tax profit of £40 million to £50 million.”
