AO World Posts Record £45 Million Profit Driven by Music Magpie Acquisition
Rising staff costs will be offset by strong cash flow from operations spurred by its membership programme
Overview
- Underlying pre-tax profit rose 32% to £45 million for the year ended March 31, outperforming its own guidance.
- Like-for-like revenue grew 7% to £1.11 billion as Music Magpie contributed an extra £30 million in sales.
- The Five Star membership programme and an expanded product range beyond major appliances powered consumer growth.
- Free cash flow increased to £23 million and the company is targeting a medium-term profit margin of 5%.
- AO World anticipates £8 million in additional staff costs from higher national insurance and minimum wages but expects £40 million to £50 million in adjusted pre-tax profit next year.