Proactive Investors – AO World PLC (LSE:LON:.) has hiked its full-year profit guidance following an improved performance over the first half, despite the impact of unseasonably wet weather.
Revenue increased 6% to £512 billion during the six months to September, the electricals retailer reported on Tuesday, pushing operating profit up 11% to £16 million.
On an adjusted basis, operating profit surged 30% to £17 million, prompting AO World to hike full-year guidance for the figure to between £39 million and £44 million, against £36 million to £41 million previously.
“We’ve had a Morecambe and Wise (LON:) summer sales period; all the right volumes just not in the right categories,” chief executive John Roberts noted.
“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.”
Free cash flow surged from £3 million in the first half of 2023 to £14 million, AO World also said, as cost efficiencies helped push its gross margin to 24.4% from 23.5% previously.
A £4 million hit was expected due to the likes of higher employer national insurance following last month’s Budget though, stretching to £8 million when including indirect costs.
