AO World shares fall 22% amid lorry driver shortage

Shares of Bolton-based online electrical retailer AO World plc slumped 22% on Friday after it warned that its growth has been “impacted by the nationwide shortage of delivery drivers and ongoing disruption in the global supply chain.”

In a trading update for the six months ended September 30, 2021, AO World said: “On a one-year like-for-like basis, group revenues for the first half increased c.5% against strong comparatives during the initial Covid lockdown. 

“In the UK, revenues over the period increased c.6%, with growth impacted by the nationwide shortage of delivery drivers and ongoing disruption in the global supply chain.

“In Germany, revenues in local currency rose c.3% despite the competitive online market. 

“The challenging market dynamics in both the UK and Germany resulted in lower volumes than expected which affected operational leverage, particularly in the second quarter. 

“Given the exceptional operating environment over the past 18 months, our performance over the comparable period in H120 provides a more meaningful overview of our business performance than a comparison with H121. 

“Therefore, on a two-year like-for-like basis, group revenues grew c.66%, with our UK business growing c.63%. 

“Like-for-like revenues in Germany grew c.84% over the same period.

Whilst we continue to see industrywide issues relating to ongoing supply chain disruption, we have implemented measures to help mitigate these challenges in our logistics operations. 

“We expect revenue growth in the second half of the year to record a similar growth rate to the first half of this year and anticipate that group adjusted EBITDA for the full year to be between £35m and £50m, with profits more heavily weighted than usual towards the second half of the year driven by the peak trading period.

“Whilst the macro-outlook remains uncertain, we have confidence in the proven resilience of our business model and are well placed to meet customer demand in our peak third quarter sales period.”