Bolton’s AO World reviews German business

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%.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.