Market report: AO World reports strong revenue growth
Few stocks have fared as well since the lockdown as AO World after the online electricals retailer trebled in value.
Today, its founder and chief executive John Roberts set out plans to capitalise on the “seismic” shift in shopping habits that’s already given the company a massive sales boost.
Retaining those newly won customers now that bricks-and-mortar stores are back open will be Roberts’s next challenge. He said: “In short, we must drive forward so those customers never look back.”
Sales in the early part of the lockdown helped AO to annual revenues of £1.05 billion, up 15.9% on a year earlier. Its operating losses in today’s annual results reduced to £3.8 million from £13 million.
AO’s shares have rocketed from 50p in March to a two-year high of 167.2p, including a further rise of 2% in the wake of today’s results. They had been up by as much as 4% at one point.
Its performance was one of the bright spots in a weak session for investors, with fears of more lockdowns driving London shares lower.
The FTSE 100 index fell 30.89 points to 6,145.45 after experts warned of the potential for a second wave of Covid-19 in the UK this winter.
This led to a wave of selling of consumer-facing stocks, with JD Sports Fashion 3% lower and housebuilders Persimmon and Taylor Wimpey down more than 2%.
Safety equipment firm Halma was one of the biggest fallers, despite cheering income investors with a 5% rise in its total dividend to 16.5p a share. This was the company’s 41st consecutive year of dividend growth.
Shares still slid 6%, or 137p, to 2,158p after the highly-rated FTSE 100 stock said it expected its profits and revenues to fall in the 2021 financial year, having hit record levels for the 17th consecutive year in the period just ended.
Among smaller stocks, magazines and newspapers distributor Connect improved 5.36%, or 0.94p, to 18.5p following a better-than-expected trading update. Connect’s main operations are under the Smiths News brand, with trading throughout the pandemic resilient despite the disruption of shops closing.
Full-year guidance has been reinstated, with adjusted profits expected to be within £26 million to £28 million.
Connect’s chief executive Jonathan Bunting said: “Our trading performance is a pleasingly resilient one, and we have also taken the right action to prepare the business for the year ahead.”
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