What is the financial and operational progress made by AO World during FY21?

Source:ANDRANIK HAKOBYAN, Shutterstock

Summary

  • AO World PLC had achieved remarkable revenue growth of around 62% during FY21 ended on 31 March 2021.
  • The Company had added more than 2 million new customers during the year.
  • had adequate liquidity of £142.6 million as of 31 March 2021.

AO World PLC (LON: AO.) is the LSE listed consumer stock. AO.’s shares have generated a return of approximately 441.55% in the last 12 months. It is listed on the FTSE 250 Index.

On 16 June 2021, the Company will announce full-year FY21 results ending 31 March 2021.

Business Model

AO World PLC is the FTSE 250 listed electrical retailer engaged in the sale of domestic appliances and consumer electronics in the UK, Germany, and the Netherland. The Company has two reportable business segments –

  • Online retailing of appliances to UK customers
  • Online retailing of appliances to customers across Europe

(Source: Company presentation)

Pre-closing FY21 Trading Update (for the twelve months ended 31 March 2021, as of 15 April 2021)

  • The Company had achieved significant growth of around 62% to £1.66 billion during FY21 as it carried the positive momentum in the final quarter of FY21 as well.
  • The UK website had shown an 88% year-on-year jump in revenue during Q4 FY21.
  • Moreover, the German website had demonstrated revenue growth of around 77% during FY21.
  • The Company had added more than 2 million new customers during the year.
  • As evaluated by Net Promoter Score, the customer service rating of the Company was ranked amongst world-leading consumer companies.
  • The Company had reported £66.5 million of cash balance as of 31 March 2021, while the net cash stood at £57.0 million as of 31 March 2021.
  • On the liquidity front, the Company had a financial headroom of £142.6 million as of 31 March 2021.

Financial Summary (for six months period ended 30 September 2020, as of 24 November 2020)

(Source: Company result)

  • The total revenue had increased around 57.6% to £717.0 million during H1 FY21 due to robust demand across the UK and Germany.
  • The Company had generated £78.4 million of cash during H1 FY21, while it had utilized £5.3 million of cash for the comparative period of the prior year.
  • Moreover, the Company had reported a profit before tax of £18.3 million during H1 FY21.
  • The basic earnings per share stood at 3.45 pence during the period.

Share Price Performance Analysis of AO World PLC

(Source: Refinitiv, Thomson Reuters)

AO.’s shares were trading at GBX 320.60 and were up by close to 0.95% as of 15 April 2021 at 01:15 PM GMT. AO.'s 52-week Low and High were GBX 56.60 and GBX 444.50, respectively. AO World PLC had a market capitalization of around £1.52 billion.

Business Outlook

The Company had achieved tremendous financial, operational, and strategic performance during FY21. AO World had made a significant investment to enhance the capacity and infrastructure during the year. Moreover, the Group had anticipated adjusted EBITDA to be ranging from £63 million to £72 million during FY21. The Government support would not have any impact on the profitability levels. According to Chief Executive John Roberts, the Company had witnessed ten years of change in 10 months during FY21. The Company would enhance its operating capacity and strengthen the financial position by making changes to the operating model as a part of the One AO strategy.


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