AO World (AO) investor relations material

Executive summary

• Revenue grew 11.4% year-over-year to £1.27 billion, with adjusted profit before tax (PBT) up 16% to £50.5 million, at the top end of guidance.

• Free cash flow more than doubled to £66.4 million, and the balance sheet swung from net debt of £35.9 million to net funds of £16.4 million.

• All major operational and financial commitments made last year were met, including the turnaround of AO Mobile and musicMagpie, both now profitable.

• Membership metrics improved, driving higher frequency and cross-category purchases, with a customer base now at 13.3 million.

Financial highlights

• Group revenue: £1.27 billion, up 11.4% year-over-year.

• Adjusted PBT: £50.5 million, up 16% year-over-year; no adjusting items, so reported PBT matches adjusted.

• Free cash flow: £66.4 million, over 2.5x last year.

• Gross profit: £316.1 million, up 14.5%, with gross margin up 0.7 percentage points to 25%.

• Cash flow from operations rose to £95.7 million from £58 million in the prior year.

• Net funds: £16.4 million at year-end, from net debt of £35.9 million at start.

• Basic EPS: £0.0636, up from £0.017 last year.

Outlook and guidance

• FY 2027 PBT expected in line with market consensus, with continued progress toward a 5% PBT margin target.

• Full-year profitability expected from both mobile and musicMagpie, with further synergies and offshoring savings annualizing to £4 million.

• Capital investment of £29 million planned for FY 2027, including £7 million CapEx and £22 million for vehicle refresh via asset finance.

• External environment remains uncertain due to inflation and subdued consumer confidence.

• Announced £20 million return to shareholders for FY 2027.