AO World reveals £15m Brexit stockpiling amid underlying earnings woes
Electricals retailer AO World has warned that underlying earnings for the full-year are set to come in at the lower end of market expectations as it revealed £15 million of Brexit stockpiling.
The group – which recently saw founder John Roberts swoop back to take the helm – said it had boosted stock of fast-moving goods by around £15 million to prepare for possible no-deal Brexit disruption.
“This will help ensure we can continue to deliver our market-leading proposition to our customers,” it said.
AO World said that, as well as underlying earnings coming under pressure, it is also facing around an extra £2.5 million in costs from a management reshuffle since Mr Roberts’ return and a hit from a loss-making contract in Germany.
It had been forecast to report underlying earnings ranging between a loss of £400,000 to a profit of £2 million.
But it added that, on a statutory basis, results were in line with City expectations.
In its full-year trading statement, the group said it is expecting to report a 9.8% rise in UK revenues, or 5.4% higher when the boost from its recent Mobile Phones Direct acquisition is stripped out.
Overall revenues are set to lift by around 13%, or 9% higher with Mobiles Phones Direct stripped out.
Mr Roberts, founder and chief executive of AO World, said: “Over the last eight weeks we have created a mindset shift from the numbers delivered in full-year 19; we are setting about realising our opportunities with pace and energy.”
He added: “I am delighted to once again have the privilege to lead the business and excited by the scale of value creation that lies ahead of us for the benefit of all stakeholders.”