Bolton-based online electrical retailer AO World plc has announced a strategic review of its German business and a third quarter trading update for the period ended December 31, 2021.
AO World said: “Our German business is being significantly impacted by a number of recent material changes to the local trading environment: competition in the online market has intensified whilst online penetration has returned to pre-pandemic levels; digital marketing costs have substantially increased against pre-pandemic levels; and supply remains constrained.
“We expect these trends will continue for the foreseeable future in the German market.
“The board is focused on maximising shareholder value, and as a result of the aforementioned factors, the group has decided to commence a strategic review of its German business, which will evaluate a range of options.
“The results of the review will be announced in due course.
“We remain confident about AO’s long-term growth prospects, driven by the strength of our proven business model, the quality of our customer proposition, and the long-term market trend towards online migration.”
On trading, AO World said: “The group confirms that current trading estimates for the full year remain in line with the guidance set out at the interim results on 23 November 2021.
“On a comparable two-year period for the nine months to 31 December, UK revenues grew 58%.
“On a one-year comparative, which covered the Covid-related government lockdowns in the previous year, UK revenues were broadly stable, despite supply chain constraints and driver shortages.
“In Germany, on a comparable two-year period for the nine months to 31 December, revenues grew 67%. On a one-year comparative in Germany for the same period, revenues declined 8%.”