FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2026
17 June 2026
AO WORLD PLC
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2026
REVENUE GROWTH OF 11.4%, WITH ADJUSTED PBT UP 16.1% TO A RECORD £50.5M
PROPOSED £20M SHAREHOLDER RETURN VIA DIVIDEND AND SHARE BUYBACK
AO World plc ("AO" or "the Group"), the UK's most trusted electrical retailer, today announces its audited financial results for the financial year ended 31 March 2026 ("FY26").
AO Group £(m)
FY26
FY25
% Mvmt
Revenue
1,266.6
1,137.5
11.4%
B2C1 Revenue
911.0
831.9
9.5%
Adjusted Profit before tax2
50.5
43.5
16.1%
Profit before tax
50.5
20.6
145.1%
Basic earnings per share (p)
6.36
1.70
275.2%
Free cash flow 3
66.4
26.3
152.3%
Net funds/ (debt)4
16.4
(35.9)
N/A
Shareholder returns5
10.1
-
N/A
Financial highlights
· Total revenue (including the full year impact of musicMagpie) grew 11.4%, to £1.267bn. Revenue in our core B2C Retail business grew 9.5% to £911m, underpinned by market share6 gains across all key categories in which we operate.
· As planned, adjusted PBT grew faster than revenue - up 16.1% to a record £50.5m - with adjusted PBT margin of c.4%, making good progress towards our medium-term target of 5%.
· £201.3m of total liquidity at the period end. Profit converting to cash with free cash flow of £66.4m (2025: £26.3m) driven by strong operating performance and efficient working capital management.
· Ended the year with net funds of £16.4m after funding the EBT with £4.2m to purchase shares to satisfy share schemes and funding the £10m share buyback programme which completed in March 2026.
· In line with our disciplined capital allocation framework and reflecting our strong cash generation in FY26, we intend to return a further £20m to shareholders via a special dividend of £10m and a new share buyback programme of £10m, expected to commence following circulation of our FY26 annual report and accounts to shareholders.
Operational highlights
· The first retailer globally to exceed 1 million Trustpilot8 reviews with a 4.9 out of 5 rating, further cementing AO's position as the UK's most trusted electrical retailer.
· Continued investment in our AO membership proposition, with our guarantee that 'members always pay less'. All metrics across renewal rates, member spend and share of wallet improved in the period.
· Attracted over 720,000 new customers7 during the year, which is fuel for our flywheel in the future.
· Switch24 launched a first-to-market proposition on the latest Apple handsets exclusively for AO members; an iPhone 17 from only £17 a month, upgraded every two years to the latest model.
· Launched AO Mobile post year end, starting with friendly user trials, which will be expanded in further phases, with full launch expected within the first quarter of FY27. We look forward to combining this with our Switch24 product and expect the proposition to reflect customer demand for simple, low monthly pricing, providing access to the latest iPhone alongside a SIM-only plan.
· Successfully executed our offshoring programme, delivering a lower cost base and greater operational flexibility without compromising service standards.
· The post-pay mobile business is now profitable with improved commercial terms agreed in principle with the networks.
· Continued progress in recommerce and recycling, strengthening our circular economy proposition through musicMagpie and our in-house recycling capabilities, supporting both customer value and long-term sustainability. musicMagpie is now run rate profitable on an annualised basis, benefiting from operational restructuring and improved sourcing through the launch of a successful collaboration with Timpson.
· Ongoing investment in automation, data and AI, supporting efficiency and cost discipline.
· Strong culture and engagement, with an Employee Engagement score of 80.
Outlook and FY27 Priorities
Looking ahead, the external environment remains uncertain, with ongoing geopolitical volatility and continued inflationary pressures impacting both consumers and input costs across the economy. Notwithstanding these challenges, the strength of our value proposition, the non-discretionary element of much of our product range, our disciplined cost management and our continued investment in technology give us confidence in our ability to deliver FY27 PBT in line with current market expectations9. We remain confident in achieving our medium-term objective to deliver a 5% PBT margin.
Shareholder Returns
In line with our disciplined capital allocation framework, and reflecting our strong cash generation, we intend to return a further £20m to shareholders via a special dividend of £10m and a new share buyback of £10m expected to commence following circulation of our FY26 annual report and accounts to shareholders.
AO's Founder and Chief Executive, John Roberts, said:
"These results represent an incredible team effort with revenue up 11% to £1.27 billion, profit up 16% to a record £50.5 million, and the strongest balance sheet in our history. And all delivered against a backdrop of rising costs.
"We've also become the first retailer in the world to exceed one million Trustpilot reviews at an overall rating of 4.9 out of 5. In a category as demanding as ours, that trust is hard-won and almost impossible to copy. It sits nowhere on our balance sheet, yet it's among the most valuable things we own.
"AO Membership continues to go from strength to strength and there's more to come with the launch of Switch24 and AO Mobile, which combined, are the best way to get the latest iPhone paired with an all-you-can-eat SIM at a market-leading price. It's scaled economies shared and is exactly what our members want at a time when every pound counts.
"We've also announced today our intention to return a further £20 million to our shareholders, which is a reflection of the cash this business now generates and the discipline with which we allocate it.
"None of this is the work of one person. It's down to every AOer and every partner who shares our obsession with looking after customers. I started AO 26 years ago with a small team and a big idea and I'm as excited about the next 26 as I've ever been."
Enquiries
AO World PLC
John Roberts, Founder & CEO
Mark Higgins, CFO & COO
Tel: +44(0)1204 672 400
Sodali
Rob Greening
Tel: +44(0) 20 7250 1446
AO@sodali.com
Results presentation
An in-person results presentation will be held for analysts and investors at AO's London Office at 9.00am (BST) today, followed immediately by a live Q&A session. Advance registration prior to arrival is required via AO@sodali.com.
A playback of the presentation will be available on AO World's investor website at www.ao-world.com in the afternoon.
About AO
AO World PLC, headquartered in Bolton and listed on the London Stock Exchange, is the UK's most trusted major electricals retailer, with a mission to be the destination for electricals. Our strategy is to create value by offering our customers brilliant customer service and making AO the destination for everything they need, in the simplest and easiest way, when buying electricals.
We offer major and small domestic appliances and a growing range of mobile phones, AV, consumer electricals and laptops. We also provide ancillary services such as the installation of new and collection of old products and offer product protection plans and customer finance. We also serve the B2B market in the UK, providing electricals and installation services at scale. AO also ensures customers' electronic waste is dealt with responsibly through its WEEE processing facility alongside tech refurbishment via musicMagpie.
1 B2C (business-to-consumer) Retail revenue relates to products and services purchased by B2C customers through the retail websites (including membership fees and revenue attributable to protection plans sold with the products).
2 There were no adjustments to statutory profit before tax in FY26. In the prior year, adjusted profit before tax was defined as statutory profit before tax adjusted for the fees related to the musicMagpie acquisition and the impairment charge relating to the Mobile cash generating unit in FY25.
3 Free cash flow is reconciled to the statutory movement in cash and cash equivalents and is set out in the Financial Performance review.
4 Net funds is defined as cash and cash equivalents less borrowings less lease liabilities.
5 Shareholder returns represent the purchase of shares by the company as part of its buyback programme.
6 Total electricals market data from GfK, for the 12 months to 31 March 2026. AO's value is from company data, net value.
7A customer is defined as an individual customer who has purchased via ao.com.
8Trustpilot scores sourced from their website, June 2026.
9 Current market expectations are as at 28 May 2026; for further detail see our corporate website ao-world.com/investor-centre/investor-analysis-and-research.
Cautionary statement
This announcement may contain certain forward-looking statements (including beliefs or opinions) with respect to the operations, performance and financial condition of the Group. These statements are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events. By their nature, future events and circumstances can cause results and developments to differ materially from those anticipated. Except as is required by the Listing Rules, Disclosure Guidance and Transparency Rules and applicable laws, no undertaking is given to update the forward-looking statements contained in this document, whether as a result of new information, future events or otherwise. Nothing in this document should be construed as a profit forecast or an invitation to deal in the securities of the Company. This announcement has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to AO World PLC and its subsidiary undertakings when viewed as a whole.
STRATEGIC REVIEW
FY26 was a standout year for AO. We achieved sales of £1.27 billion and delivered record profit before tax of £50.5 million, reflecting our structural cost advantage, the resilience and attractiveness of our model, the benefits of our scale and our ability to adapt quickly as conditions change.
Our balance sheet has never been stronger, supported by continued strong cash generation and providing significant flexibility for future investment.
Our strategy is clear: to create sustainable value by being the most trusted electrical retailer, built on brilliant retail basics, a structurally low cost model and a scaled economies shared approach that aligns the interests of customers and shareholders.
Our continued focus on delivering an exceptional customer experience and value proposition alongside disciplined financial management has driven market share growth across all categories, strengthening our position in an uncertain external environment. AO is now the first retailer globally to exceed one million Trustpilot reviews with a 4.9 out of 5 rating, reflecting our deeply ingrained obsession with customer service delivered every day.
Central to this is our scaled economies shared model. We create value through structural cost advantages and obsessing about world-class service quality; in return customers give us a greater share of their electricals spend, further driving growth and operational gearing.
Our AO membership proposition continues to deepen engagement, drive loyalty and reinforce trust, and remains central to our successful customer engagement strategy, with all key metrics improving and supporting increasing customer engagement and long-term value creation. Through propositions such as AO Mobile and Switch24, our membership model drives "sticky" customer behaviour by increasing transaction frequency, familiarity and loyalty, encouraging customers to give us a greater share of their electricals spend over time.
As a result of the acquisition and integration of musicMagpie, we have continued to develop our ecosystem, strengthening the link between retail, trade-in and second-life channels. Our recommerce business is now profitable on an annualised basis and is enhancing our customer proposition while supporting sustainability and affordability.
Our culture continues to thrive, with engaged employees delivering exceptional customer service, reflected in an Employee Engagement score of 80.
While the external environment remains uncertain, including geopolitical volatility, cost inflation, shifts in consumer demand and rapid technological change, we remain confident in our ability to grow revenue, improve profitability and generate cash, supported by disciplined cost management and continued investment in technology, automation and our operating model.
OPERATIONAL AND FINANCIAL REVIEW
In the 2026 financial year we remained focused on growing revenue while delivering profit and cash. Against an inflationary cost backdrop, we prioritised efficiency and mitigated cost increases through automation and process simplification.
Adjusted profit before tax increased to £50.5m, up c.16%, on revenue growth of 11.4%, reflecting improved gross margin and continued cost discipline across the Group delivering a PBT margin of c.4%. This represents further progress towards our medium-term 5% PBT margin target, supported by a stronger and more resilient operating model.
The Group also delivered a significant strengthening of the balance sheet, moving from £35.9m net debt to £16.4m net funds, underpinned by strong cash generation and disciplined working capital management. The strong conversion of profit into cash has enabled disciplined capital allocation in the year, including continued investment in the business, funding the EBT (£4.2m), a £10.1m share buyback programme and a significant strengthening of the balance sheet to a net funds position.
Operationally, this performance was driven by continued market share gains in core Retail, the return to profitability in Mobile and the rapid improvement in musicMagpie, alongside the strength of our customer proposition. This is reflected in market-leading customer satisfaction, with a Trustpilot rating consistently above 4.9 out of 5 across more than one million reviews, and continued progress in our membership proposition, which is supporting increasing customer engagement and long-term value creation.
While the external environment remains uncertain, we remain confident in our ability to continue to grow revenue, improve profitability and generate cash, supported by ongoing investment in automation and our vertically integrated platform.
Operational highlights
B2C Retail
Our B2C Retail business remains one of the UK's market leaders in major domestic appliance ("MDA") retailing, serving customers primarily through our ao.com website and selected third‑party marketplaces. Alongside our core MDA offer, we continue to broaden our range across SDA, computing, AV, mobile, consumer electronics, gaming and smart home products.
ao.com continues to be the cornerstone of our retail operations. We differentiate through our strong customer proposition underpinned by market‑leading service levels, competitive pricing, broad product choice and flexible options across delivery, installation, recycling and payment. We continuously monitor the market to ensure our pricing and proposition remain competitive and aligned to customer expectations.
Customer engagement remained strong throughout the year. Over 720,000 new customers chose to buy from AO, taking our total historical customer base to 13.3 million. We continue to maintain market‑leading customer satisfaction, with a Trustpilot rating consistently above 4.9 out of 5 across more than one million reviews. These satisfaction levels continue to support high levels of repeat purchasing and reflect our continued focus on delivering a consistently strong customer experience and getting it right first time.
Membership continues to perform well, supported by an expanding range and a broader ecosystem of customer benefits, including Switch24 and our recently launched MVNO proposition. All key underlying performance measures, including commercially sensitive metrics, remain positive, with growth in member numbers, improved renewal rates and members contributing an increasing share of wallet.
MDA remains our core category and central to our strategy. During the year, our share of the MDA market increased by over 1 percentage point to 17.1%, demonstrating continued share gains in a competitive market. We have also continued to expand our broader product range, with customers now able to access over 9,500 products across the site. During the year, we began exploring opportunities to expand into original equipment manufacturer ("OEM") propositions within audio visual categories. Whilst we are only in the early stages, the initiative has generated valuable learnings, with future expansion expected to focus primarily on MDA.
In the second half of FY26, we launched Switch24, our new mobile handset proposition. Initial performance was impacted by supply constraints, particularly around iPhone availability, and by the need to simplify customer messaging to more clearly articulate the value of the offer. Building on these learnings, the launch of our own mobile virtual network operator ("MVNO"), which launched in early FY27, will complete our vision for a simpler and more transparent way for customers to purchase mobile devices and connectivity.
Gross margin remained stable year on year, demonstrating the resilience of the B2C model despite changes in customer purchasing patterns, brand mix, and ongoing logistics cost pressures (see the logistics section below).
In response to ongoing inflationary cost pressures, and particularly rising employment costs, we have taken further steps to optimise our operating model. During the year, we successfully outsourced the majority of our inbound sales operations to a carefully selected third‑party partner based in South Africa whilst maintaining service quality for our customers. The savings delivered from this initiative were c.£2m with an expected annualised saving of c.£4m with the impact of dual running costs impacting in the year. Recruitment plans for the current year are expected to result in the majority of our customer engagement operations being based overseas by the end of the financial year.
We continue to offer customers a broad range of payment and service options. Our long‑standing partnership with NewDay, which provides customer finance and is regulated by the FCA, remains a core part of our proposition, supporting customer choice and affordability, with finance uptake at c.13% of sales. Our Care product protection offering also performed resiliently during the year, as customers continue to recognise the value and peace of mind these plans provide. We remain pleased with the performance of this proposition and the strength of our long‑term partnership with Domestic & General, which extends to 2033.
Mobile
The UK mobile market has continued to evolve, with customer demand increasingly shifting away from traditional post‑pay contracts towards disaggregated handset and airtime solutions. Given the size of the overall mobile market - and the fact it's the largest category in the electricals sector by value - the category remains strategically important to AO, especially given the frequency with which customers change their devices and the high level of engagement they have with the category.
Against this backdrop of a structurally shrinking contract market, it was imperative that our post‑pay Mobile business addressed the underlying economics and secured sustainable arrangements with the network operators on whose behalf we connect customers. During the year, we have made good progress in reshaping the business, agreeing improved commercial terms with our network partners, growing partnerships with Samsung and Lebara and materially reducing reliance on high‑cost customer acquisition channels. As a result, the Mobile business is now profitable, with performance across all key metrics improving year on year.
While the market remains competitive, we are encouraged by the steady and profitable performance delivered in the period. Our focus is now on concluding longer‑term agreements with the networks to provide greater economic certainty and support continued disciplined growth.
Post year end, we launched AO Mobile, starting with friendly user trials, which will be expanded in further phases, with full launch expected within the first quarter of FY27. We look forward to combining this with our Switch24 product and we expect the proposition to reflect customer demand for simple, low monthly pricing, providing access to the latest iPhone alongside a SIM-only plan.
musicMagpie
In a little over 15 months since acquisition, musicMagpie has moved from being a c.£6m loss-making business to an annualised run rate profitable business. This turnaround reflects a series of decisive actions taken during the period, including the exit from the loss‑making US operation and the consolidation of the warehouse footprint to improve efficiency and cost control.
Access to product supply, particularly in consumer technology such as mobile phones, is a key driver of profitability in recommerce. During the year, musicMagpie commenced a partnership with Timpson, enabling customers to trade in their mobile phones for cash in over 1,300 stores nationwide. This materially broadens access to supply and we expect to extend the model to additional technology categories over time.
The acquisition of musicMagpie has also benefitted the implementation of our Switch24 project. With over 15 years' experience in the mobile recommerce market and acting as a key outlet for Switch24 devices, musicMagpie is integral to Switch24's profitability and therefore to the economics of our broader membership proposition.
The business continues to receive external recognition for its market leadership. musicMagpie has been awarded a lifetime achievement award by eBay, recognising it as the largest seller in the platform's history with over 20 million positive feedback ratings. In addition, the 2026 Mobile News Awards named musicMagpie Online Retailer of the Year.
Looking ahead, we continue to see opportunities to enhance capability and capture additional value across consumer technology categories, while further strengthening our ESG credentials. Over time, this is expected to improve the affordability of products for customers on ao.com and further differentiate the AO proposition.
Logistics
Our market‑leading in‑house logistics infrastructure enables the nationwide delivery of millions of products each year, operating seven days a week and serving both AO's retail business and third‑party clients. The network is centred around our national hub in Crewe and spans warehouses and distribution centres totalling over 2.0 million sq ft as at today, supported by a network of 17 delivery depots across the UK.
Labour represents a significant proportion of costs across our warehousing and delivery operations. As a result, inflationary pressures arising from changes to National Insurance and the National Minimum Wage in April 2025 had a material impact on operating costs of c.£8.5m across the Group year on year. In response, we implemented a range of mitigating actions, including changes to warehouse shift patterns, team structures and the management of returns operations, to improve efficiency and productivity.
Fuel and electricity are also material components of our cost base. In line with the Group's hedging policy, 80% of expected fuel usage has been hedged through to March 2027, and substantially all electricity usage across the Group is fixed until October 2027, providing greater cost certainty.
As part of the Group's wider technology roadmap, we continued to progress the upgrade of our warehouse management system, which is expected to be completed in FY28. This programme is intended to improve operational resilience, scalability and data visibility across the network.
With a continued focus on profit and cash generation amid persistent inflationary pressures, we carried out a small-scale, exploratory trial during the year to test the use of robotics within our warehousing operations. The early results are encouraging, and we are extending this trial into FY27, including testing in a live operational setting, to develop our understanding further. We continue to review opportunities to optimise our logistics network as part of our focus on improving efficiency and supporting future growth.
Investment in the delivery fleet also continued, with a focus on increasing capacity and lowering emissions. During the year, 160 new delivery vehicles were added, including 10 electric vehicles, as we continue to evaluate the scalability of electric delivery solutions. In addition, we are targeting 2035 for the transition of the vast majority of our trunking fleet to compressed natural gas (CNG) (or other lower-carbon alternatives as technology develops).
Our operations remain highly adaptable to the retail business's demand for driver resources and are able to leverage operational gearing through third‑party logistics volumes. Our expertise in complex two‑person delivery, which is highly valued across the industry, enables incremental profitability whilst ensuring strong service levels in the core retail business.
Recycling
Our recycling facility in Telford is one of the most sophisticated refrigeration recycling plants in Europe and operates to the highest UK and European environmental standards. The plant ensures the safe and efficient capture of environmentally harmful gases and oils, supporting both regulatory compliance and our ESG objectives.
The facility specialises in the recycling of refrigeration products, including large American‑style refrigerators, while also processing all other domestic fridges and a wide range of white goods. Where appliances are assessed to still have a viable useful life, our highly skilled repairs team refurbishes these products, which are then sold with a warranty through our established base of trade customers, maximising reuse outcomes.
For end‑of‑life products, our focus is on maximising value recovery from raw materials. To support this, we have developed a bespoke plastics refining facility alongside the recycling plant, enabling us to process plastic output into higher‑value, commoditised forms rather than lower‑grade waste streams.
During the year, we recycled or reused over 1.3 million products, bringing the total number of products recycled or reused since inception to over 10 million. While global commodity price pressures during the year have reduced recycling input values and increased net processing costs, we continue to actively manage this through operational efficiency and downstream value optimisation.
We remain committed to ongoing investment in our recycling operations. This includes the acquisition of 120k square feet of additional space and further investment in the plastics facility to enable the conversion of plastic waste into refined pellets, a more standardised and higher‑value product. Our circular‑economy partnerships with customers such as Volution Group and Ultra‑Polymers continue to strengthen, with processed plastic pellets repurposed into new products including ventilation components. Our medium‑term strategic objective remains "Closing the Loop": forming deeper partnerships with manufacturers to supply recycled materials back into the production of new electrical appliances, thereby maximising value recovery.
Our vertically integrated logistics network continues to support the collection of third‑party volumes, including from local authority amenity sites. This approach improves service efficiency while reducing vehicle miles and associated emissions.
We continue to monitor potential legislative developments, including Extended Producer Responsibility and proposals that may require retailers to collect old appliances free of charge at the point of delivery of new products. While such changes would add complexity and cost to the sector, our integrated logistics and recycling capabilities position us well relative to competitors. Should these requirements be introduced, they could also create additional downstream recovery and recycling opportunities for the Group.
Technology
Technology investment remains focused on improving operational efficiency, reducing cost-to-serve and enhancing customer experience, supporting the Group's delivery of profitable growth.
Total ERP programme expenditure in FY26 was £3.8m (FY25: £2.0m). In the year we progressed Phase 2 of our ERP programme, the replacement of our warehouse management system, which is expected to simplify processes across supply chain and warehousing operations and improve data visibility.
We replaced our contact centre platform during the year which didn't go as smoothly as we hoped. We now look forward to building AI solutions on top of it, to improve customer experience and lower costs.
We continue to deploy data and analytics, including targeted use of AI, in specific operational areas such as demand forecasting, pricing optimisation and customer service automation, where benefits can be clearly measured in terms of cost and performance. Cyber security remains a priority, with continued investment in resilience, governance and monitoring capabilities.
Technology investment is expected to increase in FY27 as these programmes move into implementation, with a continued focus on disciplined returns, operational efficiency and scalable growth.
Financial performance
Revenue
1. Revenue
Year ended
£m
31 March
2026
31 March
2025
%
Change
B2C Retail revenue
911.0
831.9
9.5%
B2B Retail revenue
103.0
116.9
(11.9%)
Mobile revenue
77.0
94.4
(18.4%)
Recommerce revenue
119.5
42.6
180.5%
Third-party logistics revenue
33.3
30.5
9.2%
Recycling revenue
22.7
21.3
6.8%
1,266.6
1,137.5
11.4%
For the 12 months ended 31 March 2026, total revenue increased by 11.4% to £1,266.6m (2025: £1,137.5m).
B2C Retail revenue
Revenue in our core B2C Retail business has increased 9.5% year on year. This increase is driven by growth in product, service, delivery and product protection plan sales. Product revenue and associated revenue is generated from ao.com, marketplaces and third-party websites.
This performance comes as a result of our increased drive to grow not only our MDA market share, where our share of the total market grew over 1% to 17.1% but also in other key categories including SDA and AV where we also made market share gains year on year.
There was an increase in service revenue, which includes membership income, fees for delivery, recycling, installation and related services mainly driven by the increase in product revenue.
B2B Retail revenue
Revenue has decreased by 11.9% year on year in B2B, as expected, in line with the Group's focus on optimising for profitability. We expect a small single digit decline in revenue in FY27, but the reset of B2B has been materially completed.
Mobile revenue
Mobile revenue decreased by 18.4% year on year, reflecting the shift in focus towards profit generation. As we prioritised margin optimisation and tighter acquisition cost disciplines, connection volumes reduced as a consequence. This, alongside a softer market for new mobile contracts, resulted in lower overall commission income from network partners.
Recommerce revenue
Recommerce revenue is generated from product sales through musicMagpie and ElekDirect, as well as reworked recycled products through AO Recycling. Revenue grew year on year by 180.5% to £119.5m (2025: £42.6m), with the majority of the increase attributable to a full year of musicMagpie consolidation.
Third-party logistics revenue
Third‑party logistics revenue increased by 9.2% year on year to £33.3m (2025: £30.5m), driven by demand for our market‑leading expertise in complex two‑person delivery. We provide delivery and related services for a number of third‑party clients in the UK, including Hisense and Simba. This activity generates incremental profitability by leveraging existing infrastructure and operational capacity. The Group will continue to optimise this opportunity to benefit from operational gearing, while maintaining focus on the core retail business.
Recycling revenue
Recycling revenues increased by 6.8% during the year, representing a resilient performance given the wider trading environment. Higher major domestic appliance sales and increased customer uptake of our recycling services drove year on year growth in processed volumes, supported by the introduction of palletised plastic processing. This increase in volumes was partly offset by a reduction in output prices for recycled materials, reflecting broader market conditions.
Gross Margin
2. Gross Margin
Year ended
£m
31 March
2026
31 March
2025
%
Change
Gross profit
316.1
276.0
14.5%
Gross margin
25.0%
24.3%
+ 0.7 ppts
Gross profit, comprising product margins, services and delivery costs, increased by 14.5% to £316.1m (2025: £276.0m), exceeding the 11.4% growth in revenue. The 0.7 percentage points increase in gross margin to 25% was driven by the pivot to profit in mobile as well as the inclusion of a full year of musicMagpie trading. While inflationary pressures and lower average selling prices continued to impact delivery costs, these were more than offset by the operational efficiencies, targeted pricing actions and ongoing margin optimisation.
Selling, General and Administrative Expenses ("SG&A")
3. Selling, General & Administrative Expenses ("SG&A")
Year ended
£m
31 March
2026
31 March
2025
%
Change
Advertising and marketing
53.5
44.4
20.4%
% of revenue
4.2%
3.9%
Warehousing
75.1
62.0
21.1%
% of revenue
5.9%
5.4%
Other admin
138.2
125.7
10.0%
% of revenue
10.9%
11.0%
Administrative expenses before adjusting items
266.7
232.1
14.9%
% of revenue
21.1%
20.4%
Adjusting items
-
22.9
N/A
% of revenue
-
2.0%
Total Administrative expenses
266.7
255.0
4.6%
% of revenue
21.1%
22.4%
SG&A costs, excluding the adjusting items (see Alternative Performance measures for further detail) increased to £266.7m (2025: £232.1m). The drivers of the increase were as follows:
Advertising and marketing costs increased to £53.5m (2025: £44.4m), primarily reflecting the consolidation of a full year of musicMagpie trading, which contributed approximately £3.5m of the increase. Continued investment in brand awareness also resulted in a year on year increase of around £1.0m, including spend on merchandise.
A highly competitive marketplace, combined with subdued market growth and an inflationary cost environment, led to increased investment in direct customer acquisition channels, particularly PPC, which increased by approximately £8.4m year on year. These increases were partially offset by a reduction of around £4.0m in Mobile acquisition spend following the successful pivot of the Mobile business to a profitable and more sustainable operating model.
Approximately 30% of warehouse costs relate to infrastructure and running costs for warehousing and outbases across the logistics business as well as the infrastructure costs relating to musicMagpie warehousing and for our inhouse recycling plant. The remaining c.70% of warehousing costs relate to people related costs which have been impacted by ongoing inflationary pressures. Of the £13.1m increase in warehousing year on year, musicMagpie accounts for £7.3m of increase with the remainder of the increase attributable to volume increase and inflationary pressures on labour costs. The business continues to look to offset the impact of inflation through efficiencies and advancements in the use of robotics in warehousing.
Other administrative costs decreased marginally as a percentage of revenue, with total spend of £138.2m (2025: £125.7m). The inclusion of musicMagpie for a full year accounts for £11m of the increase. Inflationary pressures, primarily wage-driven, together with continued investment in our ERP programme, have been partly offset by offshoring and ongoing right-sizing of the business.
Adjusted profit before tax
Adjusted profit before tax ("Adjusted PBT") is used by the Group as an additional measure to assess underlying financial performance and is consistent with how performance is monitored by management and the Board.
There were no adjusting items in the year, with Adjusted PBT therefore equal to reported Profit Before Tax. This represents a positive step in the quality and transparency of earnings compared to the prior year, where results included a number of one-off and non-cash items.
The reconciliation of statutory Profit Before Tax to Adjusted PBT is set out in table 4.
4. Adjusted profit before tax
Year ended
£m
31 March 2026
31 March 2025
% Change
Profit before tax
50.5
20.6
145.1%
Adjusting items
-
22.9
(100%)
Adjusted profit before tax
50.5
43.5
16.1%
In the prior year, adjusting items related to acquisition-related costs and non-cash impairments of goodwill and intangible assets in the Mobile business, which are excluded to aid comparability of underlying performance.
Earnings per share
Earnings per share were as follows:
12 months ended
£m
31 March 2026
31 March 2025
Profit
Profit attributable to Owners of the Parent Company from Continuing operations
35.9
9.7
Profit attributable to Owners of the Parent Company from Discontinued operations
-
0.8
Earnings attributable to owners of the parent company
35.9
10.5
Adjusting items (see table 4)
-
22.9
Adjusted earnings attributable to owners of the parent company
35.9
33.4
Number of shares
Weighted average shares in issue for the purposes of basic earnings per share
564,430,910
571,918,807
Potentially dilutive shares
22,737,153
21,413,462
Weighted average number of dilutive ordinary shares
587,168,063
593,332,269
Earnings per share from continuing operations (pence per share)
Basic earnings per share
6.36
1.70
Diluted earnings per share
6.11
1.63
Adjusted basic earnings per share
6.36
5.70
Earnings per share from continuing and discontinued operations (pence per share)
Basic earnings per share
6.36
1.83
Diluted earnings per share
6.11
1.76
Adjusted basic earnings per share
6.36
5.84
Adjusted basic earnings per share is calculated by adding back the Adjusting items in the prior year noted above.
Cash, balance sheet and capital allocation
The Group delivered strong cash generation in the year, with a cash inflow of £53.9m (2025: £12.7m outflow), resulting in a significant strengthening of the balance sheet and a move to a net funds position at year end. Available liquidity increased to £201.3m, supported by strong operating performance and continued capital discipline. The table below highlights the key movements:
31 March
2026
31 March
2025
Cash flow from operating activities
95.7
58.0
Cash flow from investing activities
(3.9)
(13.5)
Cash flow from financing activities
(37.9)
(57.2)
Cash inflow/ (outflow) in the year
53.9
(12.7)
Purchase of shares by Company & EBT (net of employee contributions)
12.5
11.0
Acquisition of musicMagpie (including payment of debt)
-
28.1
Free cash flow
66.4
26.3
Free cash flow increased to £66.4m (2025: £26.3m), reflecting strong operating performance, disciplined investment and improved working capital management. This level of cash generation provides the Group with increased flexibility to invest in strategic growth, return capital to shareholders and maintain a resilient balance sheet.
Capital allocation
The Group operates a disciplined capital allocation framework designed to balance financial resilience, investment for growth and the return of surplus capital to shareholders in a consistent and transparent manner.
The first priority of the framework is to maintain a strong balance sheet and appropriate liquidity headroom, reflecting the working capital intensity and cyclical nature of the Group's markets. This includes ensuring sufficient resources to absorb volatility, support trading and maintain stakeholder confidence through the cycle.
The Group does not manage the business to a fixed leverage target. Instead, we adopt a disciplined and flexible approach to balance sheet management, ensuring that leverage, liquidity and covenant headroom remain appropriate to the scale and cyclicality of the business. Our strong cash generation and capital-light model typically support a low level of financial leverage, with the Group able to move between net funds and modest net debt positions depending on investment requirements and market conditions. This flexibility is a core component of our capital allocation framework and enables the Group to respond dynamically to opportunities while maintaining financial resilience.
Beyond this, capital is allocated to support strategic investment in the business, including logistics, technology and infrastructure initiatives necessary to drive sustainable long-term value creation. All investment decisions are assessed against disciplined financial criteria, including returns above the Group's cost of capital, cash payback and strategic alignment with our vertically integrated model. In practice, this results in a selective approach to capital deployment, with investment prioritised towards opportunities that enhance operational efficiency, scalability and long-term cash generation.
The Group's growth strategy is primarily organic; however, we will consider opportunities for targeted M&A where these are consistent with our strategy and enhance our capabilities. All opportunities are evaluated on a disciplined, case-by-case basis within our capital allocation framework.
While the specific return profile varies by project type, we remain focused on delivering sustained improvements in ROCE over time. Where capital is generated in excess of these requirements, the Board will consider returning surplus funds to shareholders. The level and certainty of such returns are assessed against the Group's financial position, forward investment requirements and market conditions, ensuring that flexibility is preserved.
Consistent with this approach, the Group completed a £10.1m share buyback programme during the year. Share buybacks are the preferred method of return where they represent an attractive return relative to the Group's cost of capital, providing flexibility and value accretion for continuing shareholders.
The Group will continue to apply this framework dynamically, ensuring that capital allocation decisions remain aligned to long-term shareholder value while maintaining financial resilience and strategic flexibility.
Cash inflow from operating activities £95.7m (2025: £58.0m)
The cash inflow from operating activities was largely driven by the post tax operating result of the Group and a continued improvement in working capital management.
The Group's movement in working capital outflow is set out in the table below:
31 March
2026
31 March
2025
Inventories
87.4
88.5
Trade and other receivables
197.7
191.0
Trade and other payables
(238.3)
(212.9)
Net working capital
46.8
66.6
Inventory reduced by £1.1m year on year, reflecting a deliberate rebalancing of stock aligned to our strategic priorities. This movement was driven by two offsetting factors: continued growth in the Core Retail business, where we increased inventory by £13.0m to support category expansion, improved availability and service levels; and a £14.0m reduction in Mobile stock. The decrease in Mobile inventory reflects our pivot away from chasing volume in the post‑pay market, alongside a disciplined and targeted programme to exit older stock lines. Overall, these actions demonstrate tighter inventory management, improved capital efficiency and a clearer focus on areas of the business that generate sustainable returns. Inventory days were 40 days at 31 March 2026 (31 March 2025: 47 days).
Receivables increased by £6.7m year on year, driven by two principal factors. First, changes in the mix of connections across mobile network operators resulted in a higher level of receivables outstanding at the year end. Second, the timing of the Samsung S26 launch materially impacted the phasing of connections, with stronger volumes in March 2026. By contrast, March FY25 volumes were subdued due to the delayed launch of the S25, creating a lower comparative receivables balance at the previous year end.
Payables increased by £25.4m year on year, primarily reflecting the impact on trade payables of the higher level of Retail inventories noted above. In addition, continued growth in membership and the increase in sales resulted in higher deferred income liabilities. Creditor days at 31 March 2026 were 49 (31 March 2025: 52) reflecting continued support from our supplier base with the reduction driven by the mix of supplier balances at year end.
The strength of operating cash flow relative to profit also reflects the improving quality of earnings and disciplined conversion of profit into cash.
Cash outflow from investing activities £3.9m (2025: £13.5m)
Cash capital expenditure in the year was £6.0m (2025: £8.9m), with the majority relating to continued investment in our Recycling facility, including the purchase of additional land (which had previously been leased) and plant and machinery to drive further efficiencies. Other additions are mainly replacement in nature, including IT.
Reported capital expenditure is lower than the underlying level of investment in the business, reflecting the increasing use of lease and hire purchase arrangements to fund strategic programmes. In particular, the Group has continued to invest in its logistics capability, including the start of a significant refresh of the delivery fleet. A substantial proportion of this investment is therefore reflected within lease liabilities rather than capital expenditure, consistent with the Group's focus on capital efficiency and balance sheet flexibility.
On a combined basis, capital expenditure and lease-funded investment provide a more representative view of the Group's total investment in operational capacity during the year. Looking ahead, we expect investment levels to increase in FY27 to c.£29m as key programmes continue, including further fleet replacement with the addition of 360 vehicles, technology investment and infrastructure development, with the mix between capital expenditure and lease-funded investment determined on a project-by-project basis albeit it is anticipated that the vehicle funding of c.£22m will be lease funded. Consistent with our capital allocation priorities, all investment decisions continue to be assessed against returns above the Group's cost of capital while maintaining balance sheet strength and funding capacity for future growth. Recent initiatives, continued investment in our ERP transformation programme, expansion of our recycling capabilities and the refresh of the fleet have been progressed under this framework, balancing upfront investment with expected efficiency gains, scalability and long-term cash returns.
Higher cash balances throughout the year resulted in interest received increasing to £2.1m (2025: £1.0m).
In the prior year, the Group acquired the whole of the issued share capital of musicMagpie for net cash consideration of £5.7m.
Cash outflow from financing activities £37.9m (2025: £57.2m)
Financing cash outflows in the year were primarily driven by ongoing structural obligations, with capital and interest repayments on leases totalling £23.8m (2025: £24.5m), principally relating to the Group's logistics property estate and vehicle fleet. In addition, other interest payments amounted to £1.3m (2025: £2.3m).
Activity in relation to employee share schemes resulted in a net outflow in the year. The Group's Employee Benefit Trust acquired shares in the market for £4.2m (including fees) to satisfy awards under share-based payment arrangements. This was partially offset by £1.8m of cash inflows from employees following the vesting of a SAYE scheme.
Consistent with our capital allocation priorities, the Group also completed a share buyback programme during the year, resulting in cash outflows of £10.1m (including expenses).
In the prior year, financing cash flows included £19.1m of borrowings repaid following the acquisition of musicMagpie.
Net funds and total net debt
As a result of the above movements, Net funds/ (debt) were as follows:
As at £m
31 March
2026
31 March
2025
Cash and cash equivalents at year end
81.3
27.4
Borrowings - Repayable within one year
(0.2)
(0.2)
Borrowings - Repayable after one year
(1.5)
(1.7)
Owned asset lease liabilities - Repayable within one year
(3.2)
(0.7)
Owned asset lease liabilities - Repayable after one year
(11.5)
(1.4)
Net funds excluding leases relating to right of use assets
64.9
23.4
Right of use asset lease liabilities - Repayable within one year
(13.5)
(17.7)
Right of use asset lease liabilities - Repayable after one year
(34.9)
(41.5)
Net funds/(debt)
16.4
(35.9)
The Group delivered a significant strengthening of its balance sheet in the year, moving from net debt of £35.9m at FY25 to a net funds position of £16.4m at FY26. This £52.3m improvement reflects strong underlying cash generation and continued discipline in capital allocation, materially enhancing financial flexibility at the year end.
Gross borrowings remain modest, with £1.7m (2025: £1.9m) relating to a mortgage used to part-fund the acquisition of one of the Group's recycling sites.
Total lease liabilities increased by £1.7m to £63.1m (2025: £61.4m), reflecting capital repayments of £20.2m broadly offset by £22.3m of new lease additions in the year. The composition of these liabilities continues to evolve, with growth in "owned asset" lease liabilities driven by the ongoing refresh of the Logistics fleet, principally funded through hire purchase arrangements. We expect to add a further 300 delivery vehicles during FY27 on hire purchase contracts as older vehicles are replaced.
Right-of-use liabilities reduced by approximately £11m during the period, reflecting the natural run-off of the existing estate, partially offset by lease renewals. Looking ahead, we expect right-of-use liabilities to increase in FY27 by c.£20m as a result of new leases plus the renewal of leases for a number of key properties, albeit this is dependent on the timing and terms of these additions.
The Group maintains a strong liquidity position, supported by a £120m revolving credit facility which remains fully undrawn and is available through to October 2028.
Taxation
The tax charge for the year was £14.6m (2025: £10.9m) resulting in an effective rate of tax for the year of 28.9%. The effective rate of tax is higher than the UK corporation tax rate for the period of 25%, primarily due to the add-back of the IFRS 2 share-based payment charge for which no corresponding corporation tax deduction has been recognised in the year.
Pillar Two legislation has been enacted in the UK to introduce the multinational top-up tax and domestic top-up tax to accounting periods beginning on or after 31 December 2023. The Group has performed an assessment of this legislation and does not expect a material exposure to Pillar Two income taxes.
Our tax strategy can be found at ao-world.com/responsibility/group-tax-strategy.
CONDENSED CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2026
Note
2026
£m
2025
£m
Revenue
2, 3
1,266.6
1,137.5
Cost of sales
(950.5)
(861.5)
Gross profit
316.1
276.0
Administrative expenses- impairment of goodwill and
intangible fixed assets
-
(19.6)
Other administrative expenses
(266.7)
(235.4)
Total administrative expenses
(266.7)
(255.0)
Other operating income
-
0.1
Operating profit
49.4
21.1
Finance income
6.6
4.8
Finance costs
(5.5)
(5.3)
Profit before tax
50.5
20.6
Tax charge
4
(14.6)
(10.9)
Profit after tax for the period from continuing operations
35.9
9.7
Result for the period from discontinued operations
-
0.8
Profit after tax for the year
35.9
10.5
Total comprehensive profit attributable to owners of the parent arising from:
Continuing operations
35.9
9.7
Discontinued operations
-
0.8
35.9
10.5
Earnings per share from continuing operations (pence)
Basic earnings per share
5
6.36
1.70
Diluted earnings per share
5
6.11
1.63
Earnings per share from continuing and discontinued operations (pence)
Basic earnings per share
5
6.36
1.83
Diluted earnings per share
5
6.11
1.76
The Group has no items of other comprehensive income for the period ended 31 March 2026 or the prior period. As a result, the total comprehensive income for the period is the same as the profit for the period and therefore no separate Statement of Comprehensive Income has been presented.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2026
Note
2026
£m
2025
£m (Restated - see note 1)
Non-current assets
Goodwill
25.5
25.5
Other intangible assets
11.4
13.2
Property, plant and equipment
39.5
27.1
Right of use assets
42.4
51.6
Trade and other receivables
6
92.2
88.5
Deferred tax
-
2.2
211.0
208.1
Current assets
Inventories
87.4
88.5
Trade and other receivables
6
105.5
102.5
Corporation tax receivable
0.2
-
Cash and cash equivalents
81.3
27.4
274.4
218.4
Total assets
485.4
426.5
Current liabilities
Trade and other payables
7
(232.5)
(207.7)
Borrowings
8
(0.2)
(0.2)
Lease liabilities
8
(16.7)
(18.5)
Corporation tax payable
-
(0.6)
Provisions
(1.4)
(0.5)
(250.9)
(227.5)
Net current assets/ (liabilities)
23.5
(9.1)
Non-current liabilities
Trade and other payables
7
(5.7)
(5.2)
Borrowings
8
(1.5)
(1.7)
Lease liabilities
8
(46.4)
(42.9)
Deferred tax liability
(1.3)
-
Provisions
(4.1)
(4.7)
(59.0)
(54.5)
Total liabilities
(309.9)
(282.0)
Net assets
175.5
144.5
Equity attributable to owners of the parent
Share capital
10
1.4
1.5
Share premium account
10
108.5
108.5
Investment in own shares
10
(11.0)
(10.9)
Other reserves
72.0
68.2
Retained earnings/ (losses)
4.6
(22.8)
Total equity
175.5
144.5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 March 2026
Other reserves
Share
capital
£m
Share
premium
account
£m
Investment
in own
shares
£m
Merger
reserve
£m
Capital
redemption
reserve
£m
Share-based
payments
reserve
£m
Translation
reserve
£m
Other
reserve
£m
Retained
(losses)/ earnings
£m
Total
£m
Balance at 31 March 2024
1.4
108.5
-
59.2
0.5
20.4
(9.4)
(6.3)
(36.5)
137.8
Profit for the period
-
-
-
-
-
-
-
-
10.5
10.5
Share-based payment charge (net of tax)
-
-
-
-
-
7.1
-
-
-
7.1
Issue of shares
0.1
-
-
-
-
-
-
-
-
0.1
Purchase of shares by EBT
-
-
(11.1)
-
-
-
-
-
-
(11.1)
Share options exercised
-
-
0.2
-
-
-
-
-
-
0.2
Movement between reserves
-
-
-
-
-
(3.2)
-
-
3.2
-
Balance at 31 March 2025
1.5
108.5
(10.9)
59.2
0.5
24.3
(9.4)
(6.3)
(22.8)
144.5
Profit for the period
-
-
-
-
-
-
-
-
35.9
35.9
Share-based payment charge (net of tax)
-
-
-
-
-
7.6
-
-
-
7.6
Purchase of shares by EBT
-
-
(4.2)
-
-
-
-
-
-
(4.2)
Share options exercised
-
-
4.0
-
-
-
-
-
(2.2)
1.8
Purchase of own shares by entity
-
-
-
-
-
-
-
(10.1)
(10.1)
Cancellation of shares
(0.1)
-
-
-
0.1
-
-
-
-
Movement between reserves
-
-
-
-
-
(3.9)
-
-
3.9
-
Balance at 31 March 2026
1.4
108.5
(11.0)
59.2
0.5
28.0
(9.4)
(6.3)
4.6
175.5
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2026
Note
2026
£m
2025
£m
Cash flows from operating activities
Profit for the year in continuing operations
35.9
9.7
Net cash generated from/ (used in) operating activities in discontinued operations
-
1.2
Adjustments for:
Depreciation and amortisation
29.4
27.1
Non cash impairments of goodwill and intangible fixed assets
-
19.6
Loss/ (profit) on disposal of property, plant and equipment
0.3
(0.1)
Finance income
(6.6)
(4.8)
Finance costs
5.5
5.3
Taxation charge
14.6
10.9
Share-based payment charge
7.7
7.3
Increase in provisions
0.3
0.4
Operating cash flows before movement in working capital
87.1
76.6
Increase in inventories
(2.2)
(4.2)
(Increase)/ decrease in trade and other receivables
(2.0)
18.3
Increase/ (decrease) in trade and other payables
24.8
(23.5)
Total movement in working capital
20.6
(9.4)
Taxation paid
(12.1)
(9.3)
Cash generated from operating activities
95.7
58.0
Cash flows from investing activities
Interest received
2.1
1.0
Proceeds from sale of property, plant and equipment
-
0.1
Acquisition of property, plant and equipment
(5.2)
(8.8)
Acquisition of intangible assets
(0.8)
(0.1)
Acquisition of subsidiary (net of cash acquired)
-
(5.7)
Cash used in investing activities
(3.9)
(13.5)
Cash flows from financing activities
Employee contributions on the exercise of share options
1.8
0.1
Purchase of shares by EBT including transaction costs
10
(4.2)
(11.1)
Purchase of own shares by entity
(10.1)
-
Repayment of borrowings
(0.2)
(19.4)
Interest paid on borrowings
(1.3)
(2.3)
Interest paid on lease liabilities
(3.6)
(3.4)
Repayment of lease liabilities
(20.2)
(21.2)
Net cash used in financing activities by discontinued operations
-
(0.1)
Net cash used in financing activities
(37.9)
(57.2)
Net increase/ (decrease) in cash
53.9
(12.7)
Cash and cash equivalents at beginning of year
27.4
40.1
Cash and cash equivalents at end of year
81.3
27.4
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
This financial information has been prepared and approved by the Directors in accordance with UK adopted International Accounting Standards ("UK adopted IFRS").
Whilst the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2026 or 2025 but is derived from those accounts. Statutory accounts for 2025 have been delivered to the Registrar of Companies and those for 2026 will be delivered following the Company's Annual General Meeting. The auditor has reported on those accounts; the report was unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or (3) Companies Act 2006.
Certain financial data have been rounded. As a result of this rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data.
Discontinued Operations
Following the closure of the German operations in FY23, the German operations are treated as a discontinued activity under IFRS 5 and the results and cash flows are therefore shown separately on the face of each of the primary statements.
Restatement of comparatives
In accordance with IFRS 3 Business Combinations, adjustments to the fair value assessment of assets and liabilities acquired on the acquisition of musicMagpie plc in the prior year, during the 12-month measurement period, have been applied retrospectively, and the comparative information has been restated.
As a result, goodwill recognised on this acquisition in the prior year has been reduced from £12.1m to £12.0m reducing the total Goodwill disclosed on the face of the balance sheet from £25.6m (previously reported as at 31 March 2025) to £25.5m (restated as at 31 March 2025) with a corresponding reduction of £0.1m in the previously reported Corporation tax payable as at 31 March 2025 to £0.6m (restated as at 31 March 2025). Further details are included in note 9.
Adoption of new and revised standards
The accounting policies set out in Note 3 of the Group financial statements have been applied in preparing this financial information.
New accounting standards in issue but not yet effective
The following UK-adopted IFRSs have been issued but have not been applied, as they are not yet effective, by the Group in these consolidated financial statements:
• Annual Improvements to IFRS Accounting Standards - Volume 11 (effective date 1 January 2026)
• Amendments to IFRS 9 and IFRS 7, "Classification and measurement of financial instruments and Contracts referencing nature-dependent electricity" (effective date 1 January 2026)
• IFRS 18, "Presentation and Disclosure in Financial Statements" (effective date 1 January 2027)
• IFRS 19, "Subsidiaries without Public Accountability: Disclosures" (effective date 1 January 2027)
The Group does not consider that any of the issued standards, or standard amendments issued by the IASB, but not yet applicable, will have a significant impact on the financial statements with the exception of IFRS 18 which will primarily affect the classification and presentation of income and expense items.
The Group also continues to monitor the potential impact of new standards and interpretations which may be endorsed and require adoption by the Group in future reporting periods.
Going concern
The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons:
The Group meets its day-to-day working capital requirements from its cash balances and the availability of its £120m revolving credit facility which expires in October 2028.
The Directors have prepared base and sensitised cash flow forecasts for the Group for a period of at least 12 months from the expected approval of the financial statements ("the going concern period") which indicate that the Group will remain compliant with its covenants and will have sufficient funds through its existing cash balances and availability of funds from its revolving credit facility to meet its liabilities as they fall due for that period. The forecasts take account of current trading, management's view on future performance and their assessment of the impact of market uncertainty and volatility.
In assessing the going concern basis, the Directors have taken into account a severe but plausible downside to sensitise its base case by applying a sales risk of 15%, which restricts revenue growth to levels below those achieved in the year ended 31 March 2026. Further sensitivities have been modelled to reduce gross margin by 1% and to assume greater than inflation staff costs for non-head office staff. These sensitivities capture a severe cash flow impact from a combination of potential downsides including a weaker UK electricals market, a business interruption or a cyber security incident.
Although not modelled in these severe but plausible downside scenarios, the risks above could be offset with controllable mitigations across various expense categories and discretionary spend. Under this severe but plausible downside scenario the Group continues to demonstrate headroom on its banking facilities and remains compliant with its quarterly covenants, which are interest cover (Adjusted EBITDA being at least 4x net finance costs) and leverage (Net debt to be no more than 2.5x EBITDA). The likelihood of a breach of covenants is considered remote and hence headroom against its covenants has not been disclosed.
Consequently, the Directors are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial information requires management to make judgements and estimates that affect reported amounts.
The Directors consider that revenue recognition in respect of commission for product protection plans and network connections includes significant areas of accounting estimation and a summary of these is set out below. The Directors have applied the variable consideration guidance in IFRS 15 and as a result of revenue restrictions, do not believe there is a significant risk of a material downward adjustment. Revenue has been restricted to ensure that it is only recognised when it is highly probable and therefore subsequently, there could be a material reversal of restrictions.
The key assumptions and estimation techniques have been applied consistently with the prior year.
Further detail on the judgements and assumptions applied, including sensitivity analysis, is included in Note 4 and Note 22 in the Group's Annual Report and Accounts for the year ended 31 March 2026.
Revenue recognition and recoverability of income from product protection plans
Commission income is recognised under IFRS 15 when the Group satisfies its performance obligations as agent. Revenue recognised represents an estimate of lifetime commission on plans sold, based on key assumptions including:
· contract margins;
· customer attrition rates;
· expected plan duration;
· discount rates; and
· expected scheme performance.
These estimates are informed by historical data and assumptions regarding future customer behaviour. Revenue is constrained to the extent that it is highly probable that a significant reversal of cumulative revenue recognised will not occur.
During the year, refinements to assumptions resulted in a £0.6m reduction in previously recognised revenue.
At 31 March 2026, £3.7m of revenue remains constrained (2025: £3.0m). The associated receivable was £99.3m (2025: £98.1m).
Management monitors the accuracy of estimates through comparison of expected and actual cash receipts and considers the level of estimation uncertainty to be appropriate. Sensitivity analysis is set out in note 6.
Revenue recognition and recoverability of income in relation to network commissions
Commission income from mobile network operators is recognised when the Group earns the right to consideration, based on estimated future cash flows from contracts sold. Key assumptions include:
· contract terms;
· customer tenure (including out-of-contract behaviour);
· churn rates;
· discount rates; and
· potential clawbacks.
Revenue is subject to the IFRS 15 constraint where there is a risk of significant reversal.
During the year, £1.5m of previously constrained revenue was recognised following refined estimates.
At 31 March 2026, £2.0m of revenue remains constrained (2025: £3.2m). The associated receivable was £50.5m (2025: £46.7m).
While estimation uncertainty exists, the Directors do not consider that reasonably possible changes in assumptions would result in material changes to the valuation of the asset in the next financial year. Sensitivity analysis is set out in note 6.
2. Revenue
The table below shows the Group's revenue by major revenue stream. Revenue recognition for each area is set out in Note 3 of the Group financial statements.
Major revenue streams
2026
£m
2025
£m
B2C Retail revenue
911.0
831.9
B2B Retail revenue
103.0
116.9
Mobile revenue
77.0
94.4
Recommerce revenue
119.5
42.6
Third-party logistics revenue
33.3
30.5
Recycling revenue
22.7
21.3
1,266.6
1,137.5
3. Segmental analysis
Operating segments are determined by the internal reporting regularly provided to the Group's Chief Operating Decision Maker. The Chief Operating Decision Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Directors.
The Group's Chief Operating Decision Maker reviews the Group's performance as a whole and makes decisions for allocating resources based on the Group as a whole, as such, there is only one operating segment in the Group.
4. Taxation
2026
£m
2025
£m
Corporation tax
Current year
11.0
10.1
Adjustments in respect of prior years
0.2
0.2
11.2
10.3
Deferred tax
Current year
3.2
0.8
Adjustments in respect of prior years
0.2
(0.2)
3.4
0.6
Total tax charge
14.6
10.9
The expected corporation tax charge for the year is calculated at the UK corporation tax rate of 25% (2025: 25%) on the profit before tax for the year.
The charge for the year can be reconciled to the profit in the statement of comprehensive income as follows:
2026
£m
2025
£m
Profit before tax on continuing operations
50.5
20.6
Tax at the UK corporation tax rate of 25% (2025: 25%)
12.6
5.1
Ineligible expenses
0.7
0.2
Income not taxable
-
(0.1)
Non-deductible goodwill impairment
-
3.7
Non-deductible acquisition costs
-
0.8
Share-based payments
1.0
1.1
Prior period adjustments
0.2
-
Tax charge for the year
14.6
10.9
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
2026
£m
2025
£m
Profit attributable to Owners of the Parent Company from
continuing operations
35.9
9.7
Profit attributable to Owners of the Parent Company from
discontinued operations
-
0.8
Earnings attributable to owners of the parent company
35.9
10.5
Adjusting items
-
22.9
Adjusted earnings attributable to owners of the parent company
35.9
33.4
Number of shares
Weighted average shares in issue for the purposes
of basic earnings per share
564,430,910
571,918,807
Potentially dilutive shares
22,737,153
21,413,462
Weighted average number of dilutive ordinary shares
587,168,063
593,332,269
Earnings per share from continuing operations (pence per share)
Basic earnings per share
6.36
1.70
Diluted earnings per share
6.11
1.63
Adjusted basic earnings per share
6.36
5.70
Earnings per share from continuing and discontinued operations (pence per share)
Basic earnings per share
6.36
1.83
Diluted earnings per share
6.11
1.76
Adjusted basic earnings per share
6.36
5.84
The basic earnings per share is affected by adjusting items that are one off in nature as set out in note 3 of the Group's financial statements. Management have therefore presented an adjusted earnings per share which is based on adjusted earnings attributable to the owners of the parent company as they believe it provides helpful additional information for stakeholders in assessing the performance of the business.
6. Trade and other receivables
2026
£m
2025
£m
Trade receivables
15.6
15.1
Contract assets
149.8
144.8
Prepayments and accrued income
31.9
31.0
Other receivables
0.4
0.2
197.7
191.0
The trade and other receivables are classified as:
2026
£m
2025
£m
Non-current assets
92.2
88.5
Current assets
105.5
102.5
197.7
191.0
All of the amounts classified as non-current assets relate to contract assets.
Contract assets
Contract assets represent the expected future commissions receivable in respect of product protection plans and mobile phone connections. The Group recognises revenue in relation to these plans and connections when it obtains the right to consideration as a result of performance of its contractual obligations (acting as an agent for a third party). Revenue in any one year therefore represents the estimate of the commission due on the plans sold or connections made.
The reconciliation of opening and closing balances for contract assets is shown below:
2026
£m
2025
£m
Balance brought forward
144.8
159.6
Revenue recognised
98.4
115.4
Cash received
(98.8)
(134.1)
Revisions to estimates
0.9
0.1
Unwind of discounting
4.5
3.8
Balance carried forward
149.8
144.8
Revisions to estimates represents changes to previously recognised or constrained revenue from periods prior to the current year.
Product protection plans
Under our arrangement with Domestic & General ("D&G"), the Group receives commission in relation to its role as agent for introducing its customers to D&G and recognises revenue at the point of sale as it has no future obligations following this introduction. It also receives a share of the overall profitability of the scheme. A discounted cash flow methodology is used to measure the estimated value of the revenue and contract assets in the month of sale of the relevant plan, by estimating all future cash flows that will be received from D&G and discounting these based on the expected timing of receipt. Subsequently, the contract asset is measured at the present value of the estimated future cash flows. The key inputs into the model which forms the base case for management's considerations are:
• the contractually agreed margins, which differ for each individual product covered by the plan as is included in the agreement with D&G;
• the number of live plans based on information provided by D&G;
• the discount rate for plans sold in the year using external market data reflecting the time value of money;
• the estimate of profit share relating to the scheme as a whole based on information provided by D&G;
• historic rate of customer attrition that uses actual cancellation data for each month for the previous 6 years to form an estimate of the cancellation rates to use by month going forward (range of 0% to 9.0% weighted average cancellation by month); and
• the estimated length of the plan based on historical data plus external assessments of the potential life of products (5 to 18 years).
The last two inputs are estimated based on extensive historical evidence obtained from our own records and from D&G. The Group has accumulated historical empirical data over the last 18 years from c.3.9m plans that have been sold. Of these, c.1.1m are live. Applying all the information above, management calculates their initial estimate of commission receivable. Consideration is then given to other factors outside of the historical data noted above that could impact the valuation. This primarily consi
ders the reliance on historical data as this assumes that current and future experience will follow past trends. There is, therefore, a risk that changes in consumer behaviour could reduce or increase the total cash flows ultimately realised over the forecast period. Management makes a regular assessment of the data and assumptions with a detailed review at half year and full year to ensure this continues to reflect the best estimate of expected future trends. As set out in Note 1, the Directors do not believe there is a significant risk of a downward material adjustment to the revenue recognised in relation to these plans over the next 12 months. The sensitivity analysis below is disclosed as we believe it provides useful insight to the users of the financial statements into the factors taken into account when calculating the revenue to be recognised.
The table shows a possible indicative sensitivity of the carrying value of the commission receivable and revenue to a reasonably possible change in inputs to the discounted cash flow model over the next 12 months. However, there are other reasonably possible alternative outcomes that could result in the contract asset increasing materially in the next 12 months.
Sensitivity
Impact on contract asset and revenue
£m
Cancellations (increase)/ decrease by 2%
(1.9)/ 1.9
Cancellations
The number of cancellations and therefore the cancellation rate can fluctuate based on a number of factors including macroeconomic changes such as unemployment and cost of living. The impact of reasonable potential changes is shown in the sensitivities above.
Network commissions
The Group operates under contracts with a number of Mobile Network Operators ("MNOs"). Over the life of these contracts, the service provided by the Group to each MNO is the procurement of connections to the MNO's networks. The individual consumer enters into a contract with the MNO for the MNO to supply the ongoing airtime over that contract period. The Group earns a commission for the service provided to each MNO. Revenue is recognised at the point the individual consumer signs a contract and is connected with the MNO. Consideration from the MNO becomes receivable over the course of the contract between the MNO and the consumer. The Group has determined that the number and value of consumers provided to each MNO in any given month represents the measure of satisfaction of each performance obligation under the contract. A discounted cash flow methodology is used to measure the estimated value of the revenue and contract assets in the month of connection, by estimating all future cash flows that will be received from the MNOs and discounting these based on the expected timing of receipt. Subsequently, the contract asset is measured at the present value of the estimated future cash flows.
The key inputs to management's base case model are:
• revenue share percentage, i.e. the percentage of the consumer's spend (to the MNO) to which the Group is entitled;
• the discount rate using external market data to reflect the time value of money;
• the length of contract entered into by the consumer (12 - 24 months) and the resulting estimated consumer average tenure that takes account of both the default rate during the contract period and the expectations that some customers will continue beyond the initial contract period and generate out of contract revenue.
The input is estimated based on extensive historical evidence obtained from the networks, and adjustment is made for the risk of potential changes in consumer behaviour. Applying all the information above, management calculates their initial estimate of commission receivable. Consideration is then given to other factors outside of the historical data noted above which could impact the valuation. This primarily considers the reliance on historical data as this assumes that current and future experience will follow past trends.
The risk remains that changes in consumer behaviour could reduce or increase the total cash flows ultimately realised over the forecast period. Management make a regular assessment of the data and assumptions with a detailed review at half year and full year to ensure this continues to reflect the best estimate of expected future trends and appropriate revisions are made to the estimates.
As set out in Note 1, the Directors do not believe there is a significant risk of a downward material adjustment to the revenue recognised in relation to these plans over the next 12 months given the variable revenue constraints applied.
The sensitivity analysis below is disclosed as we believe it provides useful insight to the users of the financial statements by giving insight into the factors taken into account when calculating the revenue to be recognised. The table shows the sensitivity of the carrying value of the commission receivables and revenue to a reasonably possible change in inputs to the discounted cash flow model over the next 12 months, having taken account of the changes in behaviour experienced in the period.
Sensitivity
Impact on contract
asset and revenue£m
2% decrease/ (increase) in expected cancellations
0.9/ (0.9)
Cancellations
The number of cancellations and, therefore, the cancellation rate, can fluctuate based on a number of factors. These include macroeconomic changes e.g., unemployment, interest rates and inflation. The impact of reasonable potential changes is shown in the sensitivities above.
7. Trade and other payables
2026
£m
2025
£m
Trade payables
150.3
128.2
Accruals
27.7
24.6
Advance payments on account
23.4
22.8
Deferred income
24.5
20.9
Other payables
12.3
16.3
238.3
212.9
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
Trade and other payables are classified as:
2026
£m
2025
£m
Current liabilities
232.5
207.7
Long-term liabilities
5.7
5.2
238.3
212.9
8. Net funds/ (debt) and movement in financial liabilities
2026
£m
2025
£m
Cash and cash equivalents at year end
81.3
27.4
Borrowings - Repayable within one year
(0.2)
(0.2)
Borrowings - Repayable after one year
(1.5)
(1.7)
Owned asset lease liabilities - Repayable within one year
(3.2)
(0.7)
Owned asset lease liabilities - Repayable after one year
(11.5)
(1.4)
Net funds excluding leases relating to right of use assets
64.9
23.4
Right of use asset lease liabilities - Repayable within one year
(13.5)
(17.7)
Right of use asset lease liabilities - Repayable after one year
(34.9)
(41.5)
Net funds/ (debt)
16.4
(35.9)
Whilst not required by IAS 1 Presentation of Financial Statements, the Group has elected to disclose its lease liabilities split by those which ownership transfers to the Group at the end of the lease ("Owned asset lease liabilities") and are disclosed within the Property Plant and Equipment table in note 18 of the Group financial statements, and those leases which are rental agreements and where ownership does not transfer to the Group at the end of the lease as Right of use asset lease liabilities which are disclosed within the Right of use assets table in the Group financial statements. This is to give additional information that the Directors feel will be useful to the understanding of the business.
Movement in financial liabilities in the year was as follows:
Lease liabilities
Borrowings
£m
Owned assets
£m
Right of use
£m
Balance at 1 April 2025
1.9
2.1
59.3
Changes from financing cash flows
Payment of interest
(0.1)
(0.6)
(3.1)
Repayment of lease liabilities
-
(2.0)
(18.1)
Repayment of borrowings
(0.2)
-
-
Total changes from financing cash flows
(0.3)
(2.6)
(21.2)
Other changes
New lease liabilities
-
14.8
7.6
Reassessment of lease terms
-
(0.1)
(0.3)
Interest expense
0.1
0.6
3.1
Total other changes
0.1
15.2
10.4
Balance at 31 March 2026
1.7
14.7
48.4
New lease liabilities include existing leases that have been renewed or extended beyond their original lease terms. Reassessment of lease terms relate to leases the Group exited during the period and those that will end before their original lease term.
Movement in financial liabilities in the prior year was as follows:
Lease liabilities*
Borrowings
£m
Owned assets
£m
Right of use
£m
Balance at 1 April 2024
2.1
3.6
65.2
Changes from financing cash flows
Payment of interest
(0.2)
(0.1)
(3.3)
Repayment of lease liabilities
-
(1.5)
(19.7)
Repayment of borrowings
(19.4)
-
-
Total changes from financing cash flows
(19.5)
(1.6)
(23.0)
Other changes
Brought in on acquisition of subsidiary
19.1
-
3.4
New lease liabilities
-
-
15.2
Reassessment of lease terms
-
-
(4.8)
Interest expense
0.2
0.1
3.4
Total other changes
19.4
0.1
17.2
Balance at 31 March 2025
1.9
2.1
59.3
*in the prior period, the Group presented lease liabilities, in the movement in liabilities table, as the total of both owned asset lease liabilities and right of use liabilities. Management believe that the disaggregation of the two types in the movement in liabilities table better aligns to the information presented in the Net funds/ debt table and, as such, the prior year comparative information has been re-presented.
9. Acquisition of subsidiaries and measurement period adjustments
On 12 December 2024, the Group acquired all the ordinary shares in musicMagpie plc.
During the current financial year, the Group finalised the fair value assessment of assets and liabilities acquired on the acquisition. This resulted in a measurement period adjustment of £0.1m, arising from additional information obtained in relation to facts and circumstances that existed at the acquisition date.
In accordance with IFRS 3 Business Combinations, the adjustment has been applied retrospectively, and the comparative information has been restated.
As a result, goodwill recognised in the prior year has been reduced from £12.1m to £12.0m and the reported Corporation tax payable as at 31 March 2025 has reduced by £0.1m to £0.6m. The adjustment had no impact on profit for the prior year.
10. Share capital, investment in own shares and share premium
Number
of shares
m
Share
capital
£m
Share
premium
£m
Investment in own shares
£m
Capital redemption reserve
£m
At 1 April 2025
580.3
1.5
108.5
(10.9)
0.5
Cancellation of shares
(9.7)
(0.1)
-
-
0.1
Purchase of shares by EBT (including transaction costs)
-
-
-
(4.2)
-
Transfer of own shares upon exercise of share options
-
-
-
4.0
-
At 31 March 2026
570.6
1.4
108.5
(11.0)
0.5
On 17 September 2025, the Company commenced a share buyback programme with the aggregate purchase price of ordinary shares being up to £10m (excluding expenses). The purpose of the programme was to reduce the share capital of the Company and therefore any shares purchased under the programme were subsequently cancelled. During the year, 9,748,994 shares were purchased for £10.1m (including transaction costs).
During the period, the Company's EBT purchased 4,399,472 of the Company's ordinary shares at market value. Consideration, including transactions costs, was £4.2m. Shares held by the EBT are used to satisfy options under the Group's share schemes. During the year 4.5m shares were transferred to employees to satisfy share option exercises. As at 31 March 2026, the number of shares held by the EBT was 11,039,469 (31 March 2025: 11,161,642).
The capital redemption reserve arose as a result of the redemption of ordinary and preference shares in the year ended 31 March 2012 and 31 March 2014 respectively. The movement in the current year relates to the redemption of ordinary shares as part of the share buyback programme during the year.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.ENDFR EAAKKFAEKEAA
Recent news on AO World
See all newsUK Stocks-Factors to watch on June 17 (updated)
UK retailer AO World logs record profit as discounts, membership draw shoppers (updated)
UK's AO World FY26 revenue meets estimates; announces special dividend and buyback
UK retailer AO World posts higher annual profit, proposes $27 million shareholder returns
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2026