Jan 19, 2021

Jam tomorrow still applies for brave new AO World

AO World was the London market's top-performing large cap last year with a gain of 339 per cent. UK sales jumped 67 per cent to £457m in the final three months of 2020 as forced closures of rivals meant record-breaking peak trading over Black Friday and Christmas. Untangling it all requires the help of broker Peel Hunt, which cut its forecast for adjusted pre-tax profit for the year to March 2021 from £51m to £43.4m. A 14 per cent profit downgrade at the end of an exceptional year? It's somewhat at odds with investors' belief that AO will exit the pandemic delivering improved profitability on rapidly slowing sales growth. An update on Tuesday showed a 9 per cent year-on-year rise in group revenues for the three months to December 26 and another standout performance for Sharwood's cooking sauces. The much smaller international segment, about 5 per cent of revenues, also merits a mention after a rough couple of years.

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