AO has raised its expectations for the future despite its losses widening during the first half of its current financial year.
The Bolton-headquartered online electricals retailer said the six months to September 30, 2022, "represented solid progress in the plan to pivot the business to focus on profit and cash generation".
It added that as a result, its full-year sales are forecast to hit its target while profits are expected to be around the top end of previous estimates.
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AO also said that its guidance for its next financial year "has been set above current consensus".
The update comes as the company posted a pre-tax loss of £11.6m for the period, compared to a loss of £4.3m during the same six months in 2021. Its revenue also fell from £660.6m to £546.3m.
Founder and chief executive John Roberts said: "During the first six months of the year, we've made good progress with our strategic realignment as we focus on profitability and cash generation, all of which is yielding the results we expected.
"We've now closed the loss making and cash consumptive parts of our operations meaning the remaining UK business is cash generative, and are successfully closing our German business with a minimal cash impact to the wider group.
"I'm pleased with this progress, particularly against the backdrop of an extraordinarily difficult macro-economic climate.
"As ever, I'm hugely grateful for the hard work of all our AOers over the last six months.
"It hasn't been easy and I'm extremely proud of their commitment to delivering our plan particularly during this peak trading period.
"Our collective obsession with amazing our customers through outstanding service never falters, however tough the external trading conditions become.
"Over the last 22 years, the team has built and nurtured trusted relationships with some of the world's leading electrical manufacturers and I'm also grateful to them for their continued support.
"While the short-term outlook remains challenging, I'm confident that our strategy is the right one, and as we position ourselves to be the UK's most trusted electrical retailer we look to the future with cautious optimism."
AO added that its plan to focus on cash generation and profitability "remains on track" and that its "execution of the strategic pivot is accelerating".
However, it added that it is "of course not immune to the challenging and uncertain consumer environment, and we expect to continue to be impacted by both the cost of living crisis affecting consumer spending, as well as by ongoing supply chain issues".
It said: "The whole of the electricals market, is down year on year and in light of this we continue to have a laser focus on profit and cash which will see us driving only profitable sales and channels.
"We have initiated a number of cost reduction initiatives during the first half of the year which will see the cost base of the business reduce, giving an annualised run rate saving of at least £30m in FY24 vs FY22.
"We will continue to 'right size' our cost base to market conditions and outlook.
"At the full year results we guided to adjusted EBITDA in the range of £20-30m. Whilst mindful of the current economic challenges we expect to be around the top end of the range.
"Our medium-term ambitions, as set out in our full year results (i.e. to deliver average revenue growth of 10+% per annum, with an EBITDA margin of 5+% and improved cash generation), remain unchanged; we expect to achieve the first ambition (5% EBITDA) in the next financial year.
"In the longer-term, our addressable market in the UK stands at c£23.4bn as we look to deepen our presence in categories such as televisions, laptops, audio visual and small domestic appliances.
"The online segment of the market in those categories remains a key opportunity for us as the long-term structural migration to online retailing continues."
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