Shares of Bolton-based online electrical retailer AO World fell about 6% on Tuesday after it said its revenue grew 9.9% to £404.2 million in the six months to September 30 but warned it is fighting a “continuingly tough macro trading environment in UK and Europe and a declining UK MDA (major domestic appliances) market.”
Group operating losses fell slightly to £11.7 million, including exceptional costs of £1.4 million incurred with the proposed acquisition of Mobile Phones Direct Ltd.
AO chief executive officer Steve Caunce said: “While our core UK and Germany MDA markets have been challenging, with the UK MDA market becoming tougher than expected, we take encouragement that we are at least maintaining market share in this core category in the UK and growing significantly in Germany.
“Elsewhere, our continued focus on growing our range of online electricals and adding new complementary ranges proved successful in the first six months of the year, with newer categories such as Audio Visual and Computing performing particularly well.
“Similarly, we are excited about further strengthening our customer offer through the acquisition of the UK’s leading online-only mobile phone retailer, Mobile Phones Direct …
“While we faced some operational challenges with our driver model in Germany which had an effect on our second quarter we expect to return to our targeted growth levels in Germany over the next few months.
“Our peak trading period began on 9 November with the launch of our biggest ever Black Friday and I remain confident of achieving long-term sustainable growth across the group.
“We expect full year results to fall within the range of board expectations, albeit more second half weighted than previously anticipated.”