Shares slump as AO World blames Black Friday for sales setback
The Bolton-based online business now believes its UK full-year earnings will be around £16.5m, blaming Black Friday sales which did not produce additional revenues but instead condensed them into a shorter period.
Brokers at Jefferies had expected the firm’s UK business to make £19.2m after the firm’s founder and chief executive John Roberts said last month he was confident of meeting full-year targets. Shares fell as much as 47 per cent.
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Hide AdThe company, which was launched in 2000, floated on the stock market last year and launched in Germany in October, six months ahead of expectations. It added its UK annual sales would come in at between and £470m and £475m. Brokers at JPMorgan had forecast £486m.
Chief executive John Roberts said: “AO has experienced tougher than expected trading conditions in the final quarter of the year, as compared to the fourth quarter in the 2014 financial year.
“While we are disappointed sales and profits are going to come in slightly below expectations, we remain committed to our market-leading, customer-focused business model.”
The firm added that trading in Germany is progressing well.
Analysts at JPMorgan said: “Given the relatively low level of profitability currently being achieved by the group, this represents a material downgrade to estimates.”