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AO (AO) Fundamentals


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So losses at AO widen yet again.

I have my doubts that you can make a profit in electricals with an internet only operation.

For all the internets popularity profits often come from physical stores where despite higher costs you have more opportunity to sell customers more and in particular profitable add ons it also gives you a valuable edge as people can actually see/use before they buy.Without this you are really just competing on price and there are plenty on the net happy to sell at virtually no profit or at a loss.

The one positive is that if the valuation dropped enough it may become attractive to an existing (profitable) retailer where with integration they may be able to make it profitable.

imo

AO World revenues up


Online electrical retailer AO World's UK business continued to grow with ao.com revenue up by 10.3% year on year and overall UK revenue up by 8.9%, against tough comparatives.

The group said that in Europe revenue for the period was up 28.4% year on year, on a constant currency basis, reflecting a period of focus on building its logistics capabilities, capacity and a solid base for the business.

Overall group revenue was up 12.3% for the quarter, year on year.

The group expects the performance for the full year to fall within the guidance previously given but remains cautious about the final quarter given the uncertain UK economic outlook, currency impacts on supplier pricing and the possible effect on consumer demand.

Chief executive John Roberts said: "AO continues to make progress on its long term plan; delivering sales growth across all categories and territories, and convincing more customers to experience the AO Way.

"We performed well over our peak period, particularly through Black Friday, with the sheer dedication of our teams enabling us to deliver to our customers as promised.

"We also delivered strategic progress during the quarter. We launched computing in the UK, and audio-visual in Germany, retailing both these categories the AO Way - offering a simply better customer experience, executed brilliantly by a brand and team that customers and suppliers trust. Early trading in computing has been encouraging and sales are building as we invest in attracting traffic to the category on ao.com, while both our businesses in Europe continue to gain traction and delight customers.

"Looking ahead we have three months left of the current financial year and are mindful of the uncertain economic outlook. However, we remain confident that our market leading proposition will continue to drive customers to experience the AO Way and enter the New Year excited by the opportunities ahead."

from a consumer's point of view, i believe AO is seen as pretty good all round - never used them myself
however, there have long been rumours that the company is not in very strong financial health

personally, i see no merit in buying the shares

I think their after care protection/insurance makes the money. White goods are bulky and profit wise hmmmm.

Take your pick :-

12 Jan Numis Buy 169.70 250.00 250.00 Retains

12 Jan Shore Capital Hold 169.70 - - Retains

12 Jan Panmure Gordon Sell 169.70 123.00 123.00 Reiterates