AO World warns FY results will be hit by supply chain and delivery issues


AO World warns FY results will be hit by supply chain and delivery issues

Shares at AO World dipped as the online retailer warned that a nationwide shortage of delivery drivers and ongoing disruption in the global supply chain will impact its full-year results. The business now says that it expects full-year group revenues to be flat to minus 5 per cent year on year, with group EBITDA in the range of £10m to £20m.

In a statement, it said: “As we now look to the second half, we continue to see meaningful supply chain challenges with poor availability in certain categories, particularly in our newer products where we have less scale, experience and leverage. “In addition, shipping costs, material input prices and consumer price inflation remain challenging uncertainties.

“As a result of these factors, the all-important current peak trading period is significantly softer than we anticipated only eight weeks ago.”

AO World has experienced over a 70 per cent drop in share price over the past year as supply chain problems have escalated. In its update to the market this week, its interim results showed an operating loss of £11 million. Revenues had risen by 6 per cent to £760 million as compared with the same period last year.

During the period the group had recruited 500 new drivers to meet peak period demand as well as opened new warehousing across the UK and Germany to support distribution.

AO’s founder and CEO John Roberts said: “We’re working hard to solve some of the current challenges that our industry is facing. We’ve recruited c.500 new drivers and are working closely with our manufacturer partners so that customers can get what they need.

“Our AOers continue to deliver brilliantly, and our consistently world-class Net Promoter Scores and Trustpilot ratings are evidence of that. I’d like to take this opportunity to thank them for their amazing work, and I’d also like to thank our manufacturers for their ongoing support despite facing their own challenges during the period.

“While the short-term challenges are clear, I remain hugely optimistic about AO’s long-term growth prospects.”

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