Reuters logo
2 months ago
AO World shares sink after warns of significant UK slowdown
June 6, 2017 / 6:43 AM / 2 months ago

AO World shares sink after warns of significant UK slowdown

3 Min Read

(Reuters) - British online retailer AO World (AO.L) warned tough conditions would slow growth in its home market in the first quarter, sending its shares sharply lower on Tuesday.

AO World's stock was the biggest percentage loser on the FTSE 250 midcap index .FTMC after it reported a full-year loss, with shares falling as much as 10 percent to 130 pence, their lowest level since early July 2016.

Slowing consumer confidence, rising inflation and a slowdown in the UK housing market hurt trading in the second half of 2016 and these trends have continued into the start of the new financial year, the electricals retailer said.

Rising inflation and muted wage growth following Britain's vote to leave the European Union last June is forcing many UK consumers to rein in their spending.

The company's operating loss for the year ended March 31 was 12 million pounds from a loss of 10.6 million pounds a year earlier, largely due to higher losses in the Netherlands and Germany.

AO World, which sells everything from washing machines and fridges to vacuum cleaners and TVs, however, said it continued to grow market share across all its product ranges and markets.

Group revenue for the period rose 17 percent to 701.2 million pounds, with UK revenue up by 12.7 percent and Europe revenue up 52.3 percent in constant currency.

"Today's full-year results highlight the cost of expansion," said Neil Wilson, senior market analyst at ETX Capital.

AO World raised 50 million pounds in March to support growth in its product range and European markets.

The company, which rivals Dixons Carphone (DC.L) and Home Retail's HOME.L Argos, said it saw a good start to the year in Europe and its expansion plans were on track.

AO World's shares have fallen more than 60 percent since it listed on the London Stock Exchange in 2014, with the stock on course for demotion from the FTSE 250 midcap index .FTMC.

In February, its founder and largest shareholder John Roberts stepped down as chief executive and was succeeded by Chief Operations Officer Steve Caunce.

Shares in the company were down 5.9 percent at 1017 GMT.

Reporting by Rahul B and Tenzin Pema in Bengaluru, editing by Louise Heavens and Alexander Smith

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below