Online electricals retailer AO World has tumbled to an annual loss after being hit by rising costs and declining sales.
The white goods firm, with its HQ in Bolton, posted a £37 million pre-tax loss for the year to March 31, falling from a £20 million profit in the previous year.
It said this was partly driven by headwinds from global supply chain disruption, labour shortages and cost-of-living pressures impacting consumer sentiment.
Profitability was also hamstrung by “increased staff costs” as the company sought to resolve driver shortages.
Shares in the company have tumbled more than 80% over the past year after a series of profit warnings.
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AO said it is making a “strategic pivot” over the new financial year, with a focus on returning to profit growth.
The company started its turnaround plan with a £40 million fundraising round last month in a bid to strengthen its balance sheet amid fears of a cash crunch.
AO also confirmed plans to close its German operation as part of the shake-up, which it said on Thursday will cost “no more than £5 million”.
It comes after revenues in the German business slid by 16% over the year to March.
Total revenues across the whole group declined by 6% to £1.55 billion against the same period last year as it failed to keep up with stronger sales during the first year of the pandemic.
Its UK operation witnessed a 5% decline in sales to £1.37 billion for the year.
AO World founder and chief executive John Roberts said: “The past 12 months has been a turbulent time for business and for retail in particular, and AO hasn’t been immune to those effects.
“Looking ahead, we certainly have more volatility to navigate, but the core fundamentals of our business remain strong.
“We entered the new financial year with a period of strategic realignment, and a focus on cash and profit generation.”
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