Latest news with #JohnStevenson
Yahoo
2 days ago
- Business
- Yahoo
AO World profits set to jump amid growth strategy progress
Online white goods retailer AO world is set to reveal a jump in profits after its growth strategy helped drive stronger sales. The company has been undergoing a steady recover over the past three years after losses soared in 2022 in the aftermath of the Covid pandemic. It is on track to deliver another improved performance when the online retail group reports its annual results on Wednesday June 18. The group is expected to reveal a roughly 30% increase in underlying pre-tax profits, which could increase to as much as £44 million for the year to March. Meanwhile, the company is also set to report that like-for-like sales grew by about 7% for the year. Analysts at Peel Hunt are predicting it will hit sales of £1.11 billion for the year. In its previous update in March, AO said the consumer demand was remaining 'robust' despite many households facing higher mortgage payments and energy bills. Shareholders will be keen to see the group's outlook for the new financial year, as it also books higher costs following increases in the minimum wage and national insurance contributions. AO previously said it expected April cost increases to leave the company with about £8 million in extra costs. Analysts are, however, pointing towards continued profit growth despite the cost rise, with the group's growing membership operation an area which would help accelerate its sales. Peel Hunt's John Stevenson said: 'AO's membership scheme is the glue that binds the group's widening capabilities across finance, mobile and pre-owned, and introduces MDA (major domestic appliance) customers to the full range of AO's non-MDA products. 'Get membership right and we believe AO can double its electricals market share, delivering 2.5 times current revenue and five times profit over 10 years, with sliding scale in between. 'The early developments of membership are showing good traction.' Investors will also be keen to see AO's strategy for the Music Magpie business it bought last year for about £10 million. AO World founder and chief executive, John Roberts, said adding the 'top-tier trade-in service' was 'essential' for the group. Michael Hewson, analyst at MCH Market Insights, said: 'The acquisition of Music Magpie is expected to add £30 million of revenue, adding a modest loss into the full-year results. 'There should be greater clarity on how much this is likely to be with the risk of a potential impairment of up to £22 million.'
The Independent
2 days ago
- Business
- The Independent
AO World profits set to jump amid growth strategy progress
Online white goods retailer AO world is set to reveal a jump in profits after its growth strategy helped drive stronger sales. The company has been undergoing a steady recover over the past three years after losses soared in 2022 in the aftermath of the Covid pandemic. It is on track to deliver another improved performance when the online retail group reports its annual results on Wednesday June 18. The group is expected to reveal a roughly 30% increase in underlying pre-tax profits, which could increase to as much as £44 million for the year to March. Meanwhile, the company is also set to report that like-for-like sales grew by about 7% for the year. Analysts at Peel Hunt are predicting it will hit sales of £1.11 billion for the year. In its previous update in March, AO said the consumer demand was remaining 'robust' despite many households facing higher mortgage payments and energy bills. Shareholders will be keen to see the group's outlook for the new financial year, as it also books higher costs following increases in the minimum wage and national insurance contributions. AO previously said it expected April cost increases to leave the company with about £8 million in extra costs. Analysts are, however, pointing towards continued profit growth despite the cost rise, with the group's growing membership operation an area which would help accelerate its sales. Peel Hunt's John Stevenson said: 'AO's membership scheme is the glue that binds the group's widening capabilities across finance, mobile and pre-owned, and introduces MDA (major domestic appliance) customers to the full range of AO's non-MDA products. 'Get membership right and we believe AO can double its electricals market share, delivering 2.5 times current revenue and five times profit over 10 years, with sliding scale in between. 'The early developments of membership are showing good traction.' Investors will also be keen to see AO's strategy for the Music Magpie business it bought last year for about £10 million. AO World founder and chief executive, John Roberts, said adding the 'top-tier trade-in service' was 'essential' for the group. Michael Hewson, analyst at MCH Market Insights, said: 'The acquisition of Music Magpie is expected to add £30 million of revenue, adding a modest loss into the full-year results. 'There should be greater clarity on how much this is likely to be with the risk of a potential impairment of up to £22 million.'
Yahoo
08-05-2025
- Business
- Yahoo
Next sales buoyed by unusually warm spring weather in UK
Next enjoyed better-than-expected spring sales as the UK basked in unusually warm weather, raising hopes of a strong season for fashion retailers after many had a difficult autumn and winter. The retailer, which recently surpassed £1bn in profit for the first time, continued its winning streak on Thursday as it reported that full-price sales rose by 11.4% in the 13 weeks to 26 April, compared with the same period last year. Revenue was £55m higher than initially expected. It said warmer weather had 'benefited the sale of summer-weight clothing'. The company expects annual pre-tax profits to end its current financial year at £1.08bn, representing a 6% rise compared with last year. While the first quarter had been stronger than expected, the company said this 'over-performance' might have been pulled forward from the second quarter. John Stevenson, a retail analyst at Peel Hunt, said the warm weather in April had 'turbocharged performance at Next' and that 'the whole sector should be benefiting from a positive weather effect'. He suggested that other retailers selling seasonal products were also likely to have benefited. Shares in Next, a member of the blue-chip FTSE 100 index, have risen by more than 28% so far this year, thanks to a huge expansion overseas and its sales of other brands. The stock rose 1% on Thursday. Shares in the fashion retailer JD Sports, the B&Q owner, Kingfisher, and the bicycle and car parts retailer Halfords all rose on Thursday amid hopes of better-than-expected sales despite fears about the economy. John Moore, at the wealth manager RBC Brewin Dolphin, said the quarterly figures underlined Next's strength. 'While the sun might have brought forward sales, Next is in a real sweet spot in terms of its brand offering, the rollout of its hosting format for third parties and its traditional retail operation,' he said. The retailer, which is led by the Conservative peer Simon Wolfson, has not reported any cyber incidents that have hit other big players in the British retail sector, including its rival Marks & Spencer, as well as the luxury department store Harrods and the Co-op. Analysts at Jefferies investment bank said Next could take some market share while online shopping at M&S remained disrupted. Next's online sales in the UK rose by 9% in its first quarter, which did not include the period of disruption at M&S. The retailer was created in 1982 when the men's tailoring brand Hepworths bought the womenswear chain Kendall & Sons. Next is one of the biggest online fashion businesses in the world, having bought stakes in brands such as Gap, Victoria's Secret and FatFace. Next is only the fourth British retailer to pass the £1bn profit milestone. The retailer predicts slower revenue growth in the second half of its financial year, especially because its sales in the autumn and winter seasons last year were strong. It forecasts 6% total sales growth for the full year. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
