Well we did say it was too good to be true and on occasion we do like to make with the whole “told ya” thing but in a totally unsurprising more, AO has posted a huge loss. Again.
Once the darling of the industry, the stock market and whatever else Ao is starting to look a little tarnished lately after a £10.7 million loss last year (usual expansion cost story) and now again this year a yet deeper loss of £12 million.
Oh and recall we said the business was way, way overvalued as did many others well, shares are now down 62% on the launch price and they just slid 6% on the news of this new loss. So much so it is set to be removed from the FTSE 250 this month.
But overall revenue is up.
Any of us that are in business will live by the old accountants’ caveat though of, “turnover is vanity, profit is sanity” and when you sell stuff at trade cost or less well, you kinda ain’t gonna make any profit. If you don’t make a profit, you won’t stay in business no matter how much you sell.
Chief executive of AO World Steve Caunce warned: “Trading this year has been mixed, particularly for our UK business.”
“In the second half of the year, trading in the UK became more challenging as we began to feel the impacts of dampening consumer confidence following the UK’s vote to leave the EU, subsequent price inflation and a slow-down in the UK housing market.”
All in all like other analysts, we can’t see that changing anytime soon so, expect more of the same for the foreseeable future.
I hope they go under. Their customer service especially when something goes wrong is disgusting.