AO World (AO) H1 2025 earnings summary

Executive summary

• Achieved double-digit B2C revenue growth of 13% year-over-year, with adjusted profit before tax up 30% to £17.1m and EPS rising to 1.94p.

• Gross margin improved to 24.4%, with profits converting to free cash flow of £14.1m, up from £3.3m in the prior year.

• Upgraded full-year guidance reflects continued operational and financial momentum, with strong customer engagement and membership growth.

• The business model remains resilient, supported by cost and efficiency focus and progress in mobile and recycling initiatives.

• Net funds (excluding leases) increased to £38.4m, with available liquidity at £123m post-period end.

Financial highlights

• Group revenue increased 6.3% year-over-year to £512.1m, with B2C retail revenue at £381.8m and B2B and mobile revenues declining.

• Adjusted profit before tax reached £17.1m, with a PBT margin of 3.3%.

• Gross margin improved to 24.4% from 23.5% year-over-year.

• Free cash flow of £14.1m and CapEx of £7m in H1, with full-year CapEx expected at £11m.

• Adjusted EBITDA reached £30m, up from £27m in the prior year.

Outlook and guidance

• Full-year group revenue expected between £1.09bn and £1.13bn, with B2C retail growth over 10%.

• Adjusted profit before tax guidance upgraded to £39m–£44m for the full year.

• CapEx planned at £11m for the year.

• Inflationary and labour cost pressures expected to persist, with annual cost impact from the October 2024 Budget of at least £8m.

• Medium-term target of 5% PBT margin remains in focus, with current guidance at 3.3–4%.