AO World PLC (LSE:AO.) swung into the red after a "turbulent" 12 months and the electrical retailer cautioned it faces “increasing macroeconomic headwinds" and more "volatility".
The provider of electrical white goods reported an operating loss of £32mln for the year ended March 31, compared with a profit of £30mln last year and £1mln in 2020, which it said, “provides a more meaningful overview of our business performance.”
According to a statement, the business faced increasing macroeconomic headwinds, including global supply chain disruption, labour shortages and a well-documented cost of living crisis for consumers.
“The past 12 months has been a turbulent time for business and for retail in particular, and AO hasn't been immune to those effects,” said chief executive and founder John Roberts.
“Looking ahead, we certainly have more volatility to navigate, but the core fundamentals of our business remain strong.”
In terms of revenue, the rate of growth slowed significantly in the second half compared to the first six months, where revenue was ahead by 6% compared to 12 months prior,
However, total revenues of £1.55bn were 6% lower than last year.
EBITDA was down 87% to £8.5mln due to increased staff costs because of Covid and increased marketing and logistics costs.
Looking forward, the group believes its £40mln equity raise in July to avert a credit insurance squeeze has strengthened its balance sheet and “provides the flexibility to capitalise on significant long-term growth opportunities in the UK,” although net debt stands at £33mln.