UK online electricals retailer AO World has raised its full-year profit expectations after reporting higher sales and earnings for the first half, despite inflationary “headwinds”.
For the financial year ending 31 March 2026, the retailer now anticipates adjusted pre-tax profit to be close to the upper end of its previously stated range of £45m ($59m) to £50m.
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In the six months to 30 September 2025, AO World generated revenue of £586m, a 14% increase compared with the same period a year earlier.
Operating profit and profit before tax each came in at £18m, representing year-on-year growth of 7% and 10% respectively.
The retailer’s B2C business recorded a 12% uplift in revenue, supported by market share gains across all key categories.
AO highlighted higher labour-related costs, noting that increases in the national minimum wage and National Insurance contributions had a £4m impact during the half-year period.
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By GlobalDataThe company also updated on its musicMagpie subsidiary, stating that losses had been reduced from £6m at the time of acquisition to an expected £2m for the fiscal year 2026, with an “exit run-rate of breakeven”, following what it described as “significant progress in integrating, streamlining and simplifying” the business.
AO reported total liquidity of £200m at the end of the period.
The retailer has recently introduced Switch24, a membership offering that provides access to Apple smartphones, including “an iPhone 17 from £17 a month, upgraded every two years to the latest model”.
AO added that performance of its Five Star membership scheme, which offers benefits to repeat customers, has improved across all key indicators in the half, including renewal rates, member spending and share of wallet.
AO founder and chief executive John Roberts stated: “We are pleased with the group’s progress in the first half, with trading slightly ahead of our previous expectations, despite the inflationary headwinds.
“Our strategy is working and we’re as confident as ever about AO’s upwards trajectory.”
