Shares in AO World fell today, despite it narrowing annual losses, after the electrical appliance retailer said sales growth slowed in its fourth quarter and warned of a challenging year ahead.
The Bolton-based online business, which floated on the stock market last February and launched in Germany in October, said growth in the last quarter had been impacted by comparison with the sales boost it gained in the same period a year ago as a result of extra publicity from its recent initial public offering. The stock fell almost six per cent.
AO had already disappointed investors in February when it said it would miss its annual targets because Black Friday sales did not produce additional revenues but instead condensed them into a shorter period. This sent shares down almost 50 per cent at the time.
Group annual results today showed the business narrowed pre-tax losses to £2.9 million in the year to the end of March, after rising UK orders saw its sales jump almost 24 per cent to £476.7m. It had turned in full-year losses of £7.6m a year ago.
The company, founded in 2000 by chief executive John Roberts, said although the UK market remained challenging its plans were on track at the start of the new financial year.
Mr Roberts said: "Our long-term plan is on track and, despite missing our financial expectations for the year, we have continued to take market share in the UK major domestic appliance market delivering significant growth in UK sales."
During the period the business began selling TVs and sound systems for the first time, and also introduced interest-free credit offers.
Its German business made sales of £5.8m since its launch, although its European operations made a loss of £12.3m as the group incurred new head office and warehouse costs in Germany.
The firm added it was encouraged by its progress in Germany over its first six months.
Brokers at Jefferies said: "In terms of April and May, the backdrop has been a fairly tough major domestic appliance market in the United Kingdom."
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