AO World Shares (LON: AO) Up 14.3% on Its Pre-Close Trading Statement

The AO World PLC (LON: AO) share price surged 14.3% to sit at a mark 102.73 GBX through the afternoon session on news of the company issuing a pre-close statement for its 2024 financial year ending 31 March 2024. The update offers insight into the company's financial health and projections, reinforcing its market position.

For the fiscal year ending March 31, 2024, AO World projects its revenue to approximately £1.04 billion, underscoring its robust performance despite the volatile retail landscape. The fourth quarter, in particular, highlighted the company's resilience and adaptability, with AO.com, its flagship online store, experiencing a notable uptick in revenue. 

The growth trajectory aligns with forecasts and reflects the company's strategic initiatives to enhance its online presence and customer engagement. Regarding profitability, AO World anticipates its adjusted profit before tax for the fiscal year 2024 to reach or surpass the upper limit of its previously announced guidance, which ranged from £28 million to £33 million. 

The expectation is a testament to the company's effective cost-management strategies and ability to navigate the challenges posed by a dynamic market environment.

Financial stability is critical to AO World's current and future plans. As the fiscal year draws to a close, the company expects to report net funds exceeding £30 million, calculated on a pre-IFRS16 basis. This solid financial footing is further supported by the extension of the company's £80 million revolving credit facility.

The agreement with existing lenders, extending the facility until April 2027 under the same terms, highlights the lenders' confidence in AO World's business model and its prospects for sustained growth.

AO World's pre-close update reflects its financial performance and signifies the strategic steps taken towards securing its position in the competitive electrical retail sector. By focusing on customer satisfaction, leveraging online growth opportunities, and maintaining a solid balance sheet, AO World is poised to navigate the future with confidence. 

John Roberts, CEO and Founder, commented: “I'm pleased with the clear progress that we're making after pivoting our focus to profit and cash generation during the 2023 financial year. As we expected at our half-year results, we returned to revenue growth in our core business during Q4 and, as a result, we're entering the new financial year with good momentum. With net funds on our balance sheet and a clear plan, we remain confident in our ability to deliver on our ambition for 10-20% revenue growth in the year ahead and medium-term profit guidance of 5% adjusted PBT margin.”

AO World share price. 

The AO World share price surged 12.76% to trade at 101.60p from Wednesday’s closing price of 90.10p.