In the past month, the AO World (LON: AO) (AO.L) share price has fallen by around 20%. This represents an underperformance versus the FTSE 250 index (INDEXFTSE: MCX) to which it belongs. The index has gained just under 3% over the same time period.
In terms of news releases, AO World released a trading update on 15 April for the financial year to 31 March. Its revenues increased by 62% to £1.66 billion, with momentum continuing into the final quarter of the year. In the UK, revenues increased by 88% in the final quarter of the year.
Meanwhile, its German website delivered a rise in sales of 77% in the full year. It achieved run rate profitability in the third quarter and the company now expects it to produce profits in the current financial year.
The firm added over two million new customers during the year. Its Net Promoter Score (NPS) was above 80, which is relatively high according to the company’s update.
Profitability for the 2021 financial year is expected to be between £63 million and £72 million on an adjusted EBITDA basis. This is in line with market expectations. During the year, it generated £60 million of cash. It now has a cash position of £66.5 million that provides it with net cash of £57 million. It has total liquidity headroom of £142.6 million at the end of March 2021.
The firm is completing a full reconciliation of its contract base following a previous announcement where it referred to an increase in warranty plan cancellations. It now anticipates a one-off non-cash reduction of around £15 million in the value of contract assets relating to the period between 2008 and 2020.
Commenting on the results, AO World’s CEO said: “I am delighted to report a year of outstanding financial, operational and strategic progress. The last 12 months have been like no other and we have been very proud to rise to the challenges for our customers – keeping their lives powering on with essential electrical and technology products”.
The AO World share price has risen by 236% in the past year, while it is 50% higher than it was five years ago. The FTSE 250 index has gained 40% and 36%, respectively, over the same one and five-year periods.
There have been no director deals in the company’s shares in the past month. It is due to report its full-year results on 16 June. Its shares currently trade at a price of 250p at the time of writing.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.