AO World PLC (LON:AO.) said it has seen increased demand and sales across all of its business categories as the UK’s pandemic lockdown forced consumers to stay at home and rely on home electronics.
In a trading update, the company said despite a decline in the overall market, it had grown market share with higher demand and sales since the lockdown measures came into force.
READ: AO World closes Dutch business to focus on Germany
The group also said its market had moved 100% online during the lockdown and that it expected the internet-based electricals market to “maintain a higher share than prior to [coronavirus]”.
For the year ended 31 March, AO said its revenue and adjusted earnings (EBITDA) will be “within the range of analyst expectations” and that it has consolidated its credit facilities into an £80mln revolving credit facility which matures in April 2023.
During the year, the company said it has made “substantial progress” against its four immediate priorities including 10% growth in UK major domestic appliances, accelerating the “journey to profitability” in Germany, being cash generative and leveraging its ecosystem.
"For the last 20 years I believe we have been a driving force of change, making things better, easier and cheaper than ever before for customers with outstanding levels of service. Never before has that service been more necessary or relevant and so I am very proud of the record customer satisfaction scores we are achieving through this period", said AO founder and chief executive John Roberts.
"In terms of online shopping behaviour, I believe we have seen five years accelerate into only five weeks and we will plan to cement that change as we impress more new customers than ever with the AO Way", he added.
In a note on Tuesday, analysts at Shore Capital reiterated their 'buy' rating and said the update was "reassuring" and showed that the company, as a pure play electrical retailer, had "benefited from the closure of electrical stores in its home markets of the UK and Germany".
"We upgraded the company to our buy roster last month highlighting that we believed that there could be upside potential to revenue forecasts. We also highlighted the relative strength of the balance sheet and significant liquidity headroom. The trading update should be well received by investors and we will learn more in mid-July at the time of the full year results", the broker added.
The update sent AO's shares surging 9.8% to 94p in mid-morning trading on Tuesday.
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