AO World PLC (LSE:AO.) reported annual profit above expectations and said it is confident of growing revenues at double-digit rates in the year ahead.
The online white goods and mobile phones retailer hailed its “strategic pivot” to focus on profit and cash, with adjusted profit before tax increasing 186% to £34.3 million in the year to end-March.
Most of the simplification of the business took place the previous financial year, including removing areas of the business that didn't fit with the profit priority, including the trial with Tesco and contracts with housebuilders, as well as exiting surplus properties.
Revenues for the past year consequently fell 9% to £1.04 billion, as indicated in a year-end statement, when the Bolton-headquartered company said it expected profits to be at least at the top of it previously guided range of £28-33 million, with City analysts forecasting £33.4 million on average.
For the year to March 2025, the newly promoted FTSE 250 company expressed confidence in its ability to deliver its "ambition" of double-digit revenue growth alongside adjusted PBT of between £36 million and £41 million, growth of 5% to 19.5%.
"We have made good progress on our profit performance in FY24, which is a testament to the success of our strategic pivot to focusing on profit and cash generation," said founder and chief executive John Roberts.
A cash inflow of £21 million was generated, compared to a £0.3 million outflow the prior year.
"We are now a much simpler, more efficient business and are performing better than ever for customers, with excellent and sustainable unit economics," Roberts said.
He also reiterated medium-term guidance of adjusted PBT margin of 5%, double-digit growth and EPS growing faster than revenue.