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AO World shares down despite surge in revenue

AO World reported a 67.2% surge in revenue after the group saw a strong demand in electrical sales over the Christmas period.

The online electrical retailer saw revenue in the third quarter jump to £457.3m. Sales in Germany alone surged by 77% to €73.6m. 

AO World will invest in new staff and infrastructure to meet demand. The group hired 1,500 employees in 2020 and staff in warehouses, vehicles and drivers.

Founder and chief executive John Roberts said: “I believe we’ve seen ten years of change in ten months, and experienced our strongest ever peak trading period… We look forward to the last quarter and the next financial year with confidence as the structural shift to online is cemented in consumers’ minds.”

“Now that customers have experienced a better, digital-first way to shop for electricals, I believe the majority will never look back.”

Despite the positive trading update, shares were down 7% in early trading.

Analysts at Shore Capital commented: “This is an upbeat trading update, which shows the continued momentum given both the structural shift online and the benefit as other brands physical electrical stores remain closed, as they are not deemed essential retailers during lockdown 2.0 and now lockdown 3.0.”

“This is AO World’s moment to shine given that the online market has seen a structural shift that could be permanent by consumers… The big challenge will be whether the revenue momentum can continue during the first quarter in financial year 2022 given the tough comparatives that the business will start cycling.”

AO World shares are trading -5.30% at 357,50 (0929GMT).

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