British online electrical retailer AO World has raised its full-year profit expectations after reporting higher sales and profits for the first half, despite inflationary “headwinds”.
For the financial year ending March 31, 2026, the retailer now anticipates adjusted profit before tax to be near the top end of its previously stated range of £45m ($59m) to £50m.
In the six months to September 30, 2025, AO World generated revenue of £586 million, an increase of 14% compared to the same period last year.
Operating profit and pre-tax profit each amounted to £18m, representing year-on-year growth of 7% and 10% respectively.
The retailer’s B2C business posted a 12% increase in revenue, supported by market share gains across all key categories.
AO highlighted higher labor-related costs, noting that increases in the national minimum wage and National Insurance contributions had a £4m impact over the half-year.
The company also updated on its musicMagpie subsidiary, saying losses had narrowed from £6m at the time of the acquisition to an expected £2m by fiscal 2026, with a “breakeven exit rate”, following what it described as “significant progress in integrating, rationalizing and simplifying” the business.
AO reported total liquidity of £200 million at the end of the period.
The retailer recently introduced Switch24, a membership offer that gives access to Apple smartphones, including “an iPhone 17 from £17 a month, upgraded every two years to the latest model.”
AO added that the performance of its Five Star membership plan, which offers benefits to regular customers, has improved across all key indicators in the half-year, including renewal rates, member spending and wallet share.
AO founder and chief executive John Roberts said: “We are pleased with the group’s progress in the first half, with trading slightly ahead of our previous expectations, despite inflationary headwinds.
“Our strategy is working and we are more confident than ever in AO’s upward trajectory.”
“AO World Raises Earnings Guidance as Revenue and Profit Increase” was created and originally published by Retail Insight Network, a brand owned by GlobalData.
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