Bolton-based electrical retailer AO World plc said half-year profit rose, as its direct to consumer business grew strongly, though not in the areas it had expected. 

For the six months ended 30 September, it said overall revenue increased by 6.3% to £512.1 million, while profit before tax rose 30% to £17.1 million. 

AO’s Founder and Chief Executive, John Roberts, said: “Our main B2C Retail business has returned to double digit growth alongside making more progress towards our medium-term ambition of delivering a PBT margin of over 5%.”

“We’ve had a Morecambe and Wise summer sales period; all the right volumes just not in the right categories. The wet summer weather meant we sold fewer fridges and air conditioning units and more tumble driers than we had planned. Overall, our team did a fantastic job to play this out as a satisfying score draw.”

“We also made good progress beyond our core MDA category, and I’m very encouraged with how our customers and members are responding to our improved range and value proposition in newer categories.”

AO raised its outlook for the full year, saying it now sees adjusted profit before tax between £39 million and £44 million. It expects revenue of £1.09 billion to £1.13 billion.

The company said the new government’s budget measures would add about £4 million a year in direct costs. As a result it said: “We will work hard to mitigate the impact of this to overall profitability.”

“The general tone at AO World is upbeat, and the group is now moving into peak trading with its range of Black Friday offers gaining traction,” said Richard Hunter, Head of Markets at interactive investor.

The company’s shares fell slightly on the London Stock Exchange. 

“The numbers are not a complete slam dunk, however,” said Hunter. “In particular the mobile business is one which needs some care and attention. The unit is currently loss-making due to soft consumer demand and a fall in connections.”

“While the business represents a relatively small part of the overall group income, AO World is continuing to run with its potential and in an effort to provide additional sales channels, the group acquired two web domain names in the period, with the strategic focus being on selling its full range of its products to its customers.”

“At the same time, the group will be acutely aware of competitor activity in its space and its overall focus should sharpen its appeal. In addition, AO World is estimating an annual hit of £8 million as a result of the recent Budget announcements.”