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…

Unlock the rest of this Article in 15 seconds

or Unlock with your email

Already have an account?
Login here