Good morning, it's Paul here.

As usual, please see the header for the announcements which have initially caught my eye.


AO World (LON:AO.)

Share price: 93.25p (down 3.9% today, at 08:41)
No. shares: 471.9m
Market cap: £440.0m

Trading update

AO World plc ("the Company" or "AO"), a leading European online electrical retailer, announces the following trading update for the twelve months to 31 March 2019 ("FY19").


A slight disappointment by the looks of it;

Group Adjusted EBITDA (excluding exceptional costs) is expected to be at the lower end of market expectations...
2    Company compiled revenue consensus of £892.6m, with a range of £876.0m to £904.2m and EBITDA consensus of £0.7m, with a range of £-0.4m to £2.0m.

Footnote 2 is very investor-friendly, so well done to AO & its advisers. It makes life so much easier for investors when companies include a footnote to explain what market expectations are. Every company could & should do this. It makes sense to help investors quickly & easily understand performance, as we're more likely to buy the shares, if information is presented in a readily-understandable way.

  • Revenue growth is only 9% (organic) - not very impressive.
  • Revenue of £900m, but it still can't make a profit even at the EBITDA level. So what exactly is the point of this business existing?
  • Increased stocks ahead of Brexit
  • Additional £2.5m in exceptional costs
  • Outlook comments are mainly management-speak waffle
  • Expanding into new categories, such as garden & DIY
  • Also trying out product rental


My opinion - the original business model really hasn't worked. So why is this loss-making company still valued at £440m? It doesn't make any sense to me.

It's not clear how it will compete with Amazon Prime, etc.? Selling other people's stuff, at low margins online, just isn't a good business model. Online works better when product is unique, in demand, and high margin. That's not likely to ever be the case in electricals (nor garden & DIY either).




IMImobile (LON:IMO)

Share price: 316.5p (up 10.3% today, at 11:13)
No. shares: 66.7m
Market cap: £211.1m

Trading update

IMImobile (AIM: IMO), a leading communications software and solutions provider, is pleased to announce the following update ahead of its preliminary results for the year ended 31…

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