Shropshire Star

Telford employer AO World warns over 'challenging' market

Washing machines to ovens retailer AO World has issued a fresh warning over "challenging" trading, despite delivering an increase in sales.

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AO World has a new recycling operation in Telford

The company, which has opened a major recycling centre in Telford which will employ about 200 people, issued a trading update alongside its annual general meeting today.

Overall UK revenue growth in the three months to June 30 have increased by 2.5 per cent, AO said.

The company had warned at the time of its full-year results announcement that it expected a sharp slowdown in sales in the quarter, and the latest increase reflected that with UK website sales growth having dropped from 14.5 per cent in the year to March 31.

AO appeared satisfied to have kept sales growing, however, having anticipated a slowdown in the tough trading environment and when compared with a strong performance a year ago.

"AO World remains on track with its long-term strategic plan and the board expects results for the full year to fall within the range of market expectations," said company chairman Geoff Cooper.

"Customer satisfaction continues to be exceptional in all of our territories and the roll-out of further categories across the UK and Europe continues."

The major domestic appliances market – essentially white goods like washing machines – has seen a fall in volumes year-on-year, so the company said it was "pleased" with growth in its UK website sales of 6.2 per cent.

It had a strong period in the first quarter of its trading year last time out as well, adding weight to the latest figures.

The overall UK growth of 2.5 per cent reflected a reduction in sales on third parties' websites and logistics last year as the company builds the AO brand, part of which is the opening of the state-of-the-art white goods recycling centre at Halesfield in Telford.

AO's European segment performed in line with expectations during the first quarter of the new financial year, with strong year-on-year revenue growth of 57.6 per cent in local currency (up 73.1 per cent on a sterling basis), with limited above the line marketing as planned.

Mr Cooper added: "Our momentum is encouraging and we remain confident in the delivery of the plan we set out at our capital markets day in February."

The Company's half year results for the six months ending September 30 will be announced on November 21.