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
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
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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