Rolling coverage of the latest economic and financial news
- AO World warns of product shortages, rising price and shipping costs
- Electricals retailer flags poor availability of certain products
- Firm made £10m pre-tax loss in first half of financial year
- Bailout process for collapsed Bulb Energy will rely on public funds
- Key questions answered for customers after Bulb Energy’s collapse
- Jerome Powell nominated for second term as chair of US Federal Reserve
Richard Hunter, Head of Markets at interactive investor, warns that AO World is in “a parlous position” after downgrading its revenue and earnings projections today.
The well-publicised supply chain disruptions have had a severe impact, with a shortage of delivery drivers a particular issue. At the same time, the group’s foray into the German market is not only in the early stages of establishing the brand, but is also being faced by significantly increased competition.
This in turn has necessitated an investment in systems and people (especially drivers) and increased marketing costs in Germany which have driven a bus through previous projections. Adjusted earnings have declined by 84% over the last year, with the figure of £5 million comparing to an estimate from the company itself of between £35 million to £50 million just weeks ago. Net debt has also seen the effects of the investment, now standing at £102 million compared to £21 million a year previous. The resultant loss before tax of £10 million compares to a profit of £18 million in the corresponding period last year.