REG - AO World plc - INTERIM RESULTS
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RNS Number : 8080I AO World plc 25 November 2025
25 November 2025
AO WORLD PLC
INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 SEPTEMBER 2025
STRONG REVENUE GROWTH DELIVERS ANOTHER PROFIT UPGRADE
AO LAUNCHES SWITCH 24 - IPHONE 17 FROM ONLY £17 A MONTH UPGRADED EVERY TWO
YEARS
AO World PLC ("the Group" or "AO"), the UK's most trusted electrical retailer,
today announces its unaudited financial results for the six months ended 30
September 2025 ("HY26").
The period saw continued delivery of strong revenue, profit and cash
generation growth.
£m HY26 HY25 Mvmt
Total revenue 586 512 14%
B2C Retail revenue(1) 423 377 12%
Operating profit 18 16 7%
Profit before tax 18 16 10%
Basic earnings per share (EPS) (p) 2.22 1.94 15%
Free cashflow(2) 57 14 306%
Net funds (3) 65 38 70%
Financial highlights
· B2C Retail revenue up 12%, underpinned by market share(4) gains
across all key categories, with total Group revenue growth of 14%.
· Continued profit progress, with PBT up 10% to £18m (HY25: £16m)
achieved despite inflationary headwinds of c£4m from National Minimum Wage
(NMW) and National Insurance (NI) cost increases.
· £200m of total liquidity at the period end. Profit converting to
cash, with free cashflow of £57m (HY25: £14m) driven by a strong operating
performance and a temporary improvement in working capital.
· Ongoing £10m share buyback programme continues, with c£1m
purchased by the period end and expected to complete by March 2026.
Operational highlights
· Switch24 launched. A first-to-market proposition on the latest
Apple handsets exclusively for Five Star members; an iPhone 17 from only £17
a month, upgraded every two years to the latest model.
· Continued investment in our Five Star membership proposition
through compelling discounts across all categories. All metrics across renewal
rates, member spend and share of wallet improved in the period.
· Globally leading Trustpilot rating of 4.9 out of 5 on over
850,000 reviews - further cementing AO as the UK's most trusted electrical
retailer.
· Post pay mobile business now run-rate profitable and improved
commercial terms agreed in principle with the networks.
· Significant progress made in integrating, streamlining and
simplifying musicMagpie has seen a significant reduction in the losses made by
the business YoY, from c£6m at acquisition to a forecast of c£2m for FY26
and an exit run-rate of breakeven. There remains significant untapped
opportunity to further optimise and scale.
Outlook
We are pleased with the Group's progress in the first half, with trading
slightly ahead of our previous expectations, despite the inflationary
headwinds. In our pre-close trading statement on 15 September 2025, we updated
our profit expectation to be between £45m and £50m. Given continued positive
trading since then, we now upgrade our FY26 PBT guidance to be around the top
of that recently narrowed range.
AO's Founder and Chief Executive, John Roberts, said:
"These numbers speak for themselves, and it's been another positive six months
of operational and financial progress.
"I am incredibly excited to have launched Switch24, a new proposition which
enables our Five Star members to buy the latest Apple handsets from as little
as £17 for an iPhone 17. This is a first in the UK market, and also allows
our members to have the latest iPhone every two years.
"It's a great example of AO continuing to disrupt and innovate on behalf of
our members to bring them the latest products at the lowest prices.
"It's this kind of value and service that is cementing our position as the
UK's most trusted electricals retailer with our world class 4.9 / 5 Trustpilot
score on over 850,000 reviews.
"Our strategy is working and we're as confident as ever about AO's upwards
trajectory. As always, I'd like to thank every single one of our awesome AOers
for their continued focus and dedication to giving our customers the best
possible value."
Enquiries
AO World PLC Tel: +44(0)1204 672 400
John Roberts, Founder & CEO ir@ao.com (mailto:ir@ao.com)
Mark Higgins, Group CFO & COO
Sodali & Co Tel: +44(0) 20 7250 1446
Rob Greening ao@sodali.com (mailto:ao@sodali.com)
Maria Sizyakova
Webcast details
An in-person results presentation and Q&A will be held for analysts and
investors at 09:00 GMT with registration opening at 08:30 GMT today, 25
November 2025 at our Hatton Garden office. Advance registration, prior to
arrival, is required by emailing ao@sodali.com (mailto:ao@sodali.com) . A
playback of the presentation will be available on AO World's corporate website
at www.ao-world.com (http://www.ao-world.com/) shortly afterwards.
About AO
AO World PLC, headquartered in Bolton and listed on the London Stock Exchange,
is the UK's most trusted online 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 also own an in-house logistics business to manage the delivery
process and ensure the highest possible service standards are met.
AO World offers 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. musicMagpie operates a
leading UK re-commerce platform enabling consumers to buy and sell pre-owned
consumer technology and media products. AO Business serves the B2B market in
the UK, providing electricals and installation services at scale. AO also has
a WEEE processing facility, ensuring customers' electronic waste is dealt with
responsibly.
______________________________
(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) but
excluding the re-commerce platforms for musicMagpie and Elekdirect. B2B
(business to business) Retail revenue relates to products and services
purchased by B2B customers and also includes funding for marketing services
provided to suppliers.
(2) Free cashflow is defined as the movement in cash and cash equivalents in
the period excluding the cost of funding the EBT to acquire shares in the
company and the cost of purchasing its own shares via the share buyback
programme.
(3) Net funds is defined as cash less borrowings less owned asset lease
liabilities but excluding right of use lease liabilities.
(4) Total electricals market data from GfK, for the 6 months to 30 September
2025. AO's value is from company data, net value.
(5) Trustpilot score sourced from their website October 2025.
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.
FINANCIAL REVIEW
Revenue
£m 6 months ended 6 months ended %
30 September 2025 30 September 2024 change
(represented - see note 2)
B2C Retail revenue 423.0 377.2 12.2%
B2B Retail revenue 46.3 59.9 (22.8%)
Network commission revenue 32.9 44.5 (26.0%)
Re-commerce revenue 56.0 5.8 863.6%
Third-party logistics revenue 16.3 14.1 15.9%
Recycling revenue 11.1 10.6 4.7%
585.6 512.1 14.4%
For the six months ended 30 September 2025, Group revenue increased by 14.4%
to £585.6m (HY25: £512.1m).
B2C Retail revenue
B2C Retail revenue comprises products and services, purchased by B2C customers
through our retail websites, including membership fees and revenue
attributable to protection plans sold with the product. The continued uptake
and development of our membership model, our expanding range and an increase
in advertising expenditure have resulted in revenue growth of 12.2% YoY, with
all our key categories contributing to this growth. With over 900 products
added to our category range in the period we are giving our customers more
reasons to buy with us, especially our membership and finance offerings.
B2B Retail revenue
B2B Retail revenue comprises product and service revenue purchased by a
business customer. The decline YoY relates to the decision made in the prior
financial year to move away from contracts where minimum profit hurdles are
not met. There was also a decrease YoY of B2B transactions in mobile phones
that are used to manage stock levels.
Network commission revenue
Network commission revenue, which comprises all commissions from network
connections, declined by 26% YoY following a strategic reengineering of our
partnerships with Mobile Network Operators (MNOs). This initiative aimed to
address dysfunctionality in existing agreements and restore profitability to
the category. While the changes led to a significant reduction in revenue,
they delivered notable improvements in unit gross margin and customer
acquisition costs, as we shifted away from volume-driven growth. We have
agreed commercial terms in principle with the networks and expect to sign
binding agreements in due course and on this basis our post-pay business will
continue.
Re-commerce revenue
Re-commerce revenue is generated from product sales through Elekdirect and
musicMagpie as well as reworked and recycled products through AO Recycling.
The growth in re-commerce revenue of £50.2m YoY largely results from the
acquisition of musicMagpie on 12 December 2024.
Third-Party logistics revenue
Our expertise in complex two-person delivery is highly valued in our industry,
and we undertake a number of deliveries on behalf of Third-Party clients in
the UK. Revenue in this area grew by 15.9% and delivers incremental
profitability. We will continue to optimise this revenue opportunity to
leverage our operational gearing, without it distracting from our core
business.
Recycling revenue
Recycling revenue increased to £11.1m, driven by higher volumes of products
processed in the period and a YoY reduction in plastic stock volumes,
following the commission of the extruder in October 2024. This growth has been
partially offset by declines in raw material revenue, specifically steel,
reflecting broader downward trends in global commodity markets.
Gross margin
6 months ended 6 months ended % change
£m 30 September 2025 30 September 2024
Gross profit 147.9 125.0 18.3%
Gross margin 25.3% 24.4% + 0.9 ppts
Gross profit, including product margins, services and delivery costs, and
margins associated with the trading of musicMagpie increased by 0.9ppts to
£147.9m (HY25: £125.0m) delivering an increase in gross margin to 25.3%.
Gross margin improvement has been driven by strong product margins, supported
by selective pricing and strategic purchasing actions that have helped
mitigate inflationary cost pressures. Additionally, our continued focus on
operational efficiency has further contributed to the positive gross margin
performance.
Inflationary pressures continue to impact the Group including the indirect
pressure on driver costs, as market rates adjust to reflect the rising cost of
labour which has been impacted by the changes in NI and NMW. We have also seen
a reduction in the average selling price (ASP) which has acted to further
compound the pressure on gross margin. This reduction in ASP is driven by
competition in the market as well as market share gains from Chinese
manufacturers with lower costs.
As previously noted, our recycling business has been impacted by the decline
in commodity prices, specifically steel, which have also acted as a drag to
gross margin in the period.
Selling, General & Administrative Expenses ("SG&A")
£m 6 months ended 6 months ended % change
30 September 2025 30 September 2024
Advertising and marketing 24.4 19.7 (23.9%)
% of revenue 4.2% 3.8%
Warehousing 37.1 28.6 (29.7%)
% of revenue 6.3% 5.6%
Other admin 68.9 59.5 (15.7%)
% of revenue 11.8% 11.6%
Adjusting items - 0.9 100.0%
% of revenue - 0.2%
Administrative expenses 130.4 108.6 (20.0%)
% of revenue 22.3% 21.2%
SG&A costs for the period have increased as a percentage of revenue to
22.3% (HY25: 21.2%). This increase is primarily driven by increased investment
in acquisition spend, inflationary pressures in wages as a result of increases
to NI and NMW and continued investment in our ERP system.
The majority of advertising and marketing costs occur within the B2C Retail
and Mobile businesses. Mobile customer acquisition cost has reduced in cash
terms as we look to deliver on our revised approach to our business model,
focusing on the customer proposition with traditional network contract
connections for our network partners. In the B2C retail business we have
invested more in acquisition spend to continue to drive growth in newer
categories which are performing well.
Warehousing as a percentage of sales has increased to 6.3% (HY25: 5.6%) with
an increase of £8.5m to £37.1m (HY25: £28.6m). The inclusion of musicMagpie
accounts for the majority of the pound value increase, with the increase in
the percentage cost primarily attributed to inflationary pressures of NI and
the NMW on the cost of labour within our warehouses across the logistics,
recycling and musicMagpie businesses.
Other admin, which includes staff and office costs, has increased slightly YoY
to 11.8% of revenue and increased on a cost basis by £9.4m to £68.9m (HY25:
£59.5m). The inclusion of musicMagpie accounts for the majority of the pound
value increase. We continue to look to develop our technology platforms
including £2m invested in ERP development.
Inflationary pressures, mainly as a result of people costs but also of a
number of IT tech costs have contributed to an increase in other admin costs.
We have mitigated some of the increase through offshoring which we will look
to continue where appropriate.
Operating Profit and Adjusted Profit before tax
Operating profit for the period was £17.5m (HY25: £16.4m), for the reasons
explained above.
Alternative Performance Measures
The Group tracks a number of alternative performance measures in managing its
business. These are not defined or specified under the requirements of IFRS
because they exclude amounts that are included in, or include amounts that are
excluded from, the most directly comparable measure calculated and presented
in accordance with IFRS or are calculated using financial measures that are
not calculated in accordance with IFRS. The Group believes that these
alternative performance measures, which are not considered to be a substitute
for, or superior to, IFRS measures, provide stakeholders with additional
helpful information on the performance of the business. These alternative
performance measures are consistent with how the business performance is
planned and reported within the internal management reporting to the Board.
Some of these alternative performance measures are also used for the purpose
of setting remuneration targets. These alternative performance measures should
be viewed as supplemental to, but not as a substitute for, measures presented
in the consolidated financial statements relating to the Group, which are
prepared in accordance with IFRS. The Group believes that these alternative
performance measures are useful indicators of its performance.
Adjusted profit before tax
Adjusted profit before tax is calculated by adding back or deducting Adjusting
Items to Profit Before Tax. Adjusting Items are those items which the Group
excludes in order to present a further measure of the Group's performance.
Each of these items, costs or incomes, is considered to be significant in
nature and/or quantum or are consistent with items treated as adjusting in
prior periods.
Excluding these items from profit metrics provides readers with helpful
additional information on the performance of the business across periods
because it is consistent with how the business performance is planned by, and
reported to, the Board and the Chief Operating Decision Maker.
The reconciliation of statutory Profit Before Tax to Adjusted profit before
tax is as follows:
£m 6 months ended 6 months ended % change
30 September 2025 30 September 2024
Profit before tax 17.9 16.2 10.4%
Adjusting items - 0.9 100.0%
Adjusted profit before tax 17.9 17.1 4.9%
% of revenue 3.1% 3.3%
Adjusting items
There are no adjusting items in the six months ended 30 September 2025.
In the prior period, the Group incurred £0.9m in costs relating to advisor
fees for purchase of musicMagpie plc which completed in the second half of the
year.
Due to their size and one-off nature, these costs have been treated as
adjusting items and are added back in arriving at Adjusted profit before tax.
Taxation
The tax charge is recognised based on management's best estimate of the
weighted-average annual corporation tax rate expected for the full financial
year multiplied by the pre-tax results of the interim reporting period. The
Group's tax charge for the period is £5.3m (2024: £5.1m) as a result of the
expected effective tax rate for the year of 29.5%.
Retained profit and earnings per share
Retained profit for the period was £12.6m (2024: £11.2m).
Basic earnings per share was 2.22p (2024: 1.94p) and diluted earnings per
share was 2.13p (2024: 1.86p).
The calculations for earnings per share are shown in the table below:
£m 6 months 6 months ended Year
30 September
ended
ended
2024
30 September 31 March
2025 2025
Earnings attributable to owners of the parent company from continuing 12.6 11.1 9.7
operations
Earnings attributable to owners of the parent company from discontinued - 0.1 0.8
operations
Earnings attributable to owners of the parent company 12.6 11.2 10.5
Number of shares
Basic weighted average number of ordinary shares 568,123,261 574,835,160 571,918,807
Potentially dilutive shares options 23,992,604 23,167,283 21,413,462
Diluted weighted average number of ordinary shares 592,115,865 598,002,443 593,332,269
Earnings per share (in pence) from continuing operations
Basic earnings per share 2.22 1.94 1.70
Diluted earnings per share 2.13 1.86 1.63
Earnings per share (in pence) from continuing and discontinued operations
Basic earnings per share 2.22 1.95 1.83
Diluted earnings per share 2.13 1.88 1.76
Cash resources, cash flow and Total net debt
At 30 September 2025, the Group's available liquidity, being Cash and cash
equivalents plus £120m undrawn on its Revolving Credit Facility, was £199.6m
(31 March 2025: £147.3m).
During the period, the Group generated a cash inflow of £52.2m (six months to
30 September 2024: £3.0m) as set out in the table below:
6 months ended 30 September 2025 6 months ended 30 September 2024
£m
Cashflow from operating activities 70.4 33.8
Cashflow from investing activities (1.0) (6.3)
Cashflow from financing activities (12.3) (13.4)
(excluding purchase of shares by EBT and
purchase of own shares)
Free cashflow 57.1 14.1
Purchase of shares by EBT (4.2) (11.1)
Purchase of own shares (0.7) -
Cash movement in the period 52.2 3.0
Cashflow from operating activities £70.4m inflow (30 September 2024: £33.8m)
This cash inflow is principally as a result of the improved operating
performance in the period and an improvement in working capital.
The Group's working capital is set out in the table below:
30 September 2025 31
£m March
2025
Inventories 86.3 88.5
Trade and other receivables 193.6 191.0
Trade and other payables (252.4) (212.9)
Net working capital 27.5 66.6
Inventories reduced slightly in the period with an increase in the core Retail
business as we continue to expand our range and availability offset by a
significant reduction in Mobile reflecting a continued weak post-pay market
and hence lower connections in addition to a reduction in older stock-lines.
Inventory days were 37 days at 30 September 2025 (31 March 2025: 47 days).
Trade and other receivables increased by £3m in the period with the usual
build of supplier income and an increase in the protection plan contract asset
resulting from price increases in the period offset by the reduction in the
Mobile contract asset due to lower connection volumes as we reset that
business unit.
Trade and other payables is the principal driver of the working capital
outperformance in the period, increasing by £40m since year end. Whilst part
of the increase resulted from the increase in Retail stock noted above, timing
of stock receipts and retail sales in August and September have reduced the
stockturn period and hence benefitted the working capital cycle. It is
anticipated that a significant part of this will reverse during H2. The
movement has also been impacted by an increase in deferred income due to the
timing of deliveries and the increase in our membership base. Creditor days at
30 September 2025 were 49 (31 March 2025: 52 days).
Cashflow from investing activities £1.0m outflow (2024: £6.3m)
Cash capital expenditure in the period of £1.6m principally related to the
continued investment in our Recycling activities to drive further efficiencies
and routes to market in addition to normal IT replacement.
Cashflow from financing activities (excluding purchase of shares) £12.3m
outflow (2024: £13.4m)
This cash outflow principally related to lease repayments of £10.0m (2024:
£10.8m) and interest paid of £2.3m (2024: £2.5m).
Other cashflows - included in cashflow from financing activities
During the period, the Company's EBT purchased further shares in the market
amounting to £4.2m including fees (2024: £11.1m). These shares will be used
to satisfy options under the Group's share schemes.
In addition, 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 is to reduce the
share capital of the Company and thereby increase Earnings Per Share. The
Company will cancel the shares purchased under the programme. At 30 September
2025, the Company had purchased c690k shares at a cost of £0.7m. The share
buyback programme is expected to be completed before the end of the financial
year.
As a result of the above movements, net funds/ (debt) were as follows:
30 September 31 March
2025 2025
£m £m
Cash and cash equivalents 79.6 27.4
Borrowings - Repayable within one year (0.2) (0.2)
Borrowings - Repayable after one year (1.6) (1.7)
Owned assets lease liabilities - Repayable within one year (2.4) (0.7)
Owned assets lease liabilities - Repayable after one year end (10.3) (1.4)
Net funds (excluding leases relating to right of use assets) 65.1 23.4
Right of use lease liabilities - Repayable within one year (15.4) (17.7)
Right of use lease liabilities - Repayable after one year (34.7) (41.5)
Net funds/ (debt) 15.0 (35.9)
Borrowings of £1.8m (March 2025: £1.9m) relate to a mortgage which was used
to partly fund the acquisition of one of the Group's recycling sites.
Owned asset lease liabilities increased in the period as our Logistics
business commenced a significant fleet refresh including trailers, tractor
units and delivery vehicles utilising hire purchase facilities.
Right of use lease liabilities decreased by £9.1m to £50.1m (March 2025:
£59.2m) as a result of capital repayments in the period. Certain property
leases, particularly in our warehousing portfolio, are scheduled for renewal
over the next 12-24 months and is therefore likely to see these liabilities
increase in FY27.
Free cashflow and liquidity outlook
As noted above, the favourable working capital movement seen in H1 is
anticipated to significantly reverse during H2, resulting in free cashflow for
the full year being c£50m. It is expected that the revolving credit facility
of £120m will remain undrawn.
John Roberts Mark Higgins
Founder and Chief Executive Officer Group Chief Financial Officer and Chief Operating Officer
CONDENSED CONSOLIDATED INCOME STATEMENT
For the 6 months ended 30 September 2025
£m Note 6 months ended Year
6 months 30 September 2024 ended
ended 31 March
30 September 2025 2025
Revenue 2 585.6 512.1 1,137.5
Cost of sales (437.7) (387.2) (861.5)
Gross profit 147.9 125.0 276.0
Administrative expenses - Impairment of - - (19.6)
goodwill and intangible fixed assets
Other administrative expense (130.4) (108.6) (235.4)
Total administrative expenses (130.4) (108.6) (255.0)
Other operating income - - 0.1
Operating profit 17.5 16.4 21.1
Finance income 2.9 2.4 4.8
Finance costs (2.5) (2.5) (5.3)
Profit before tax 17.9 16.2 20.6
Taxation (5.3) (5.1) (10.9)
Profit after tax for the period from continuing operations 12.6 11. 1 9.7
Result for the period from - 0.1 0.8
discontinued operations
Profit for the period 12.6 11.2 10.5
Total comprehensive profit attributable to owners of the parent arising from:
Continuing operations 12.6 11.1 9.7
Discontinued operations - 0.1 0.8
12.6 11.2 10.5
Earnings per share (pence) from continuing operations
Basic earnings per share 2.22 1.94 1.70
Diluted earnings per share 2.13 1.86 1.63
Earnings per share (pence) from continuing and discontinued operations
Basic earnings per share 2.22 1.95 1.83
Diluted earnings per share 2.13 1.88 1.76
The Group has no items of other comprehensive income for the period ended 30
September 2025 or any prior periods. 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 30 September 2025
£m Note 30 September 31 March
30 September 2024 2025 Restated (see note 4)
2025
Non-current assets
Goodwill 4 25.5 28.2 25.5
Other intangible assets 11.9 8.5 13.2
Property, plant and equipment 36.1 23.7 27.1
Right of use assets 43.5 48.8 51.6
Trade and other receivables 5 87.4 92.8 88.5
Deferred tax asset 0.7 2.5 2.2
205.1 204.5 208.1
Current assets
Inventories 86.3 92.6 88.5
Trade and other receivables 5 106.2 115.7 102.5
Corporation tax receivable 0.7 - -
Cash and cash equivalents 79.6 43.1 27.4
272.8 251.5 218.4
Total assets 477.9 456.0 426.5
Current liabilities
Trade and other payables 6 (248.0) (245.8) (207.7)
Borrowings 7 (0.2) (0.2) (0.2)
Lease liabilities 7 (17.8) (16.9) (18.5)
Corporation tax payable - (0.8) (0.6)
Provisions (0.2) (0.8) (0.5)
(266.2) (264.6) (227.5)
Net current assets/ (liabilities) 6.6 (13.1) (9.1)
Non-current liabilities
Trade and other payables 6 (4.4) (2.1) (5.2)
Borrowings 7 (1.6) (1.8) (1.7)
Lease liabilities 7 (45.0) (42.1) (42.9)
Provisions (4.6) (3.6) (4.7)
(55.6) (49.6) (54.5)
Total liabilities (321.8) (314.3) (282.0)
Net assets 156.1 141.7 144.5
Equity attributable to owners of the parent
Share capital 8 1.5 1.5 1.5
Share premium account 8 108.5 108.5 108.5
Investment in own shares 8 (14.6) (11.1) (10.9)
Other reserves 71.1 66.7 68.2
Retained losses (10.4) (23.8) (22.8)
Total equity 156.1 141.7 144.5
CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY
At 30 September 2025
Other reserves
Share capital Share premium account Investment in own shares Merger reserve Capital redemption reserve Share-based payment reserve Translation reserve Other reserves Retained losses Total
£m £m £m £m £m £m £m £m £m £m
Balance at 1 April 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 - - - - - - - - 12.6 12.6
Share-based payments charge - - - - - 3.8 - - - 3.8
(net of tax)
Purchase of shares by EBT - - (4.2) - - - - - - (4.2)
Share options exercised - - 0.5 - - - - - (0.4) 0.1
Purchase of own shares - - - - - - - - (0.7) (0.7)
Cancellation of shares - - - - - - - - - -
Movement between reserves - - - - - (0.9) - - 0.9 -
Balance at 30 September 2025 1.5 108.5 (14.6) 59.2 0.5 27.2 (9.4) (6.3) (10.4) 156.1
At 30 September 2024
Other reserves
Share capital Share premium account Investment in own shares Merger reserve Capital redemption reserve Share-based payment reserve Translation reserve Other reserves Retained losses Total
£m £m £m £m £m £m £m £m £m £m
Balance at 1 April 2024 1.4 108.5 - 59.2 0.5 20.4 (9.4) (6.3) (36.5) 137.8
Profit for the period - - - - - - - - 11.2 11.2
Issue of share capital 0.1 - - - - - - - - 0.1
Share-based payments charge - - - - - 3.7 - - - 3.7
(net of tax)
Purchase of shares by EBT - - (11.1) - - - - - - (11.1)
Movement between reserves - - - - - (1.4) - - 1.4 -
Balance at 30 September 2024 1.5 108.5 (11.1) 59.2 0.5 22.7 (9.4) (6.3) (23.8) 141.7
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the 6 months ended 30 September 2025
6 months 6 months Year
ended 30 ended 30 September 2024 Ended 31
September 2025 March 2025
£m
Cash flows from operating activities
Profit for the period in continuing operations 12.6 11.1 9.7
Net cash (used in)/ generated from - (0.1) 1.2
operating activities in discontinued operations
Adjustments for:
Depreciation and amortisation 14.4 12.5 27.1
Non-cash impairment of goodwill and - - 19.6
intangible fixed assets
Loss/ (Profit) on disposal of property, 0.3 (0.1) (0.1)
plant and equipment
Finance income (2.9) (2.4) (4.8)
Finance costs 2.5 2.5 5.3
Taxation 5.3 5.1 10.9
Share-based payment charge 3.8 3.5 7.3
(Decrease)/ Increase in provisions (0.4) - 0.4
Operating cash flows before movement 35.6 32.2 76.6
in working capital
Decrease/ (Increase) in inventories 0.8 (13.1) (4.2)
(Increase)/ Decrease in trade and other receivables (0.5) (2.0) 18.3
Increase/ (Decrease) in trade and other payables 39.4 20.1 (23.5)
Net movement in working capital 39.7 5.0 (9.4)
Taxation paid (4.9) (3.4) (9.3)
Cash generated from operating activities 70.4 33.8 58.0
Cash flows from investing activities
Interest received 0.6 0.4 1.0
Proceeds from sale of property, plant and equipment - - 0.1
Acquisition of property, plant and equipment (1.6) (6.8) (8.8)
Acquisition of intangible assets - - (0.1)
Acquisition of subsidiary (net of cash acquired) - - (5.7)
Cash used in investing activities (1.0) (6.3) (13.5)
Cash flows from financing activities
Proceeds received on exercise of share options 0.1 - 0.1
Purchase of shares by EBT (including transaction costs) (4.2) (11.1) (11.1)
Purchase of own shares (0.7) - -
Repayment of borrowings (0.1) (0.1) (19.4)
Repayment of lease liabilities (10.0) (10.8) (21.2)
Interest paid on lease liabilities (1.8) (1.7) (3.4)
Other interest paid (including interest on borrowings) (0.5) (0.8) (2.3)
Net cash used in financing activities of discontinued operations - - (0.1)
Net cash used in financing activities (17.2) (24.5) (57.2)
Net increase/ (decrease) in cash 52.2 3.0 (12.7)
Cash and cash equivalents at beginning of period 27.4 40.1 40.1
Cash and cash equivalents at end of period 79.6 43.1 27.4
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The interim financial information was approved by the Board on 25 November
2025. The financial information for the 6 months ended 30 September 2025 has
been reviewed by the Group's external auditor. Their report is included within
this announcement. The financial information for the year ended 31 March 2025
is based on information in the audited financial statements for that period
which are available online at https://www.ao-w
(https://www.ao-world.com/investor-centre/) orld.com/investor-centre/.
The comparative figures for the year ended 31 March 2025 are an abridged
version of the Group's full financial statements and, together with other
financial information contained in these interim results, do not constitute
statutory financial statements of the Group as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for the year ended 31
March 2025 has been delivered to the Registrar of Companies. The auditors have
reported on those accounts and their report was unqualified, did not draw
attention to any matters by way of emphasis and did not contain a statement
under s498(2) or (3) of the Companies Act 2006.
This condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting under UK-adopted international
accounting standards. The annual financial statements of the Group for the
year ending 31 March 2026 will be prepared in accordance with UK-adopted
international accounting standards. As required by the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority, the condensed set of
financial statements has been prepared applying the accounting policies,
judgements and presentation that were applied in the preparation of the
Company's published consolidated financial statements for the year ended 31
March 2025.
Certain financial data has 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.
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.
The Directors have prepared base and sensitised cashflow forecasts for the
Group for a period of 12 months from the expected approval of the interim
financial statements ("the going concern period") which indicated that the
Group would remain compliant with its covenants and would 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 as well as applying sensitivity analysis for a severe but
plausible downside to the base case.
Under the severe but plausible downside scenario the Group continues to
demonstrate headroom against its banking facilities and remains compliant with
its covenant requirements. Consequently, the Directors are confident that the
Group and Company will continue to have sufficient funds to continue to meet
its liabilities as they fall due for at least 12 months from the date of
approval of these interim financial statements and therefore have prepared the
interim financial statements on a going concern basis.
Key sources of estimation uncertainty
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant and are
reviewed on an ongoing basis.
Actual results could differ from these estimates and any subsequent changes
are accounted for with an effect on income at the time such updated
information becomes available.
Accounting standards require the Directors to disclose those areas of critical
accounting judgement and key sources of estimation uncertainty that carry a
significant risk of causing material adjustment to the carrying value of
assets and liabilities within the next 12 months.
The key sources of estimation and judgements, used in the below areas, are
detailed in the Group's Annual Report and Accounts for the year ended 31 March
2025 and remain relevant:
· Revenue recognition from product protection plans.
· Revenue recognition in relation to network commissions.
With regard to revenue recognition in respect of commission for product
protection plans and network connections, 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.
Impairment of Goodwill
Goodwill is subject to an impairment review on an annual basis, or more
frequently where indicators of impairment exist. The Group has considered if
any indicators of impairment exist. No indicators were observed therefore an
impairment review has not been undertaken in the period ended 30 September
2025.
2. Revenue
The table below shows the Group's revenue by each major business area.
£m 6 months 6 months Year
ended 30 September 2025 ended 30 September 2024 - Represented ended 31
March
2025
B2C Retail revenue 423.0 377.2 831.9
B2B Retail revenue 46.3 59.9 116.9
Network commission revenue 32.9 44.5 94.4
Re-commerce revenue 56.0 5.8 42.6
Third-party logistics revenue 16.3 14.1 30.5
Recycling revenue 11.1 10.6 21.3
585.6 512.1 1,137.5
To align with the revenue disaggregation adopted in the financial statements
for the year ended 31 March 2025, revenue for the six months ended 30
September 2024 has been represented to move £5.8m from B2C revenue to
re-commerce revenue. This did not have an impact on total revenue nor does it
impact any other numbers in these financial statements.
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. Goodwill
£m
Cost
At 30 September 2024 28.2
Additions 12.1
At 31 March 2025 (as reported) 40.3
Measurement adjustment (0.1)
At 31 March 2025 (restated) 40.2
At 30 September 2025 40.2
Impairment
At 30 September 2024 -
Impairment in the period 14.7
At 31 March 2025 14.7
At 30 September 2025 14.7
Carrying amount
At 30 September 2025 25.5
At 31 March 2025 (restated) 25.5
At 30 September 2024 28.2
The carrying value of goodwill relates to the purchase of Expert Logistics
Limited, the purchase by DRL Holdings Limited (now AO World PLC) of DRL
Limited (now AO Retail Limited), the acquisition of AO Recycling Limited
(formerly The Recycling Group Limited) and the acquisition of musicMagpie by
AO Limited ("UK CGU"). The previous year balance also included goodwill from
the acquisition of Mobile Phones Direct Limited (now AO Mobile Limited) by AO
Limited ("Mobile Phones Direct Limited") which was fully impaired at 31 March
2025.
The addition in the prior year represents the residual goodwill on the
acquisition of musicMagpie by AO Limited. During the six months to 30
September 2025, the purchase price allocation exercise has been completed
resulting in an adjustment of £0.1m to goodwill.
As noted in note 1, there are no indications of impairment in the period and
hence an impairment review has not been undertaken.
5. Trade and other receivables
£m 30 September 2025 30 September 2024 31
March 2025
Trade receivables 14.0 18.2 15.1
Contract assets 142.5 153.8 144.8
Prepayments and accrued income 36.8 36.5 31.0
Other receivables 0.3 - 0.2
193.6 208.5 191.0
The trade and other receivables are classified as:
£m 30 September 30 September 2024 31
2025 March 2025
Non-current assets 87.4 92.8 88.5
Current assets 106.2 115.7 102.5
193.6 208.5 191.0
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.
Product protection plans and Network commissions
As set out in note 1, a key source of estimation uncertainty relates to
revenue recognition from product protection plans and network commissions.
Management continually review those estimates in the preparation of the
financial statements to ensure that revenue is recognised in line with the
requirements of IFRS15 for variable consideration.
The reconciliation of opening and closing balances for contract assets is
shown below:
£m 30 30 31
September September 2024 March
2025 2025
Balance brought forward 144.8 159.6 159.6
Revenue recognised 42.7 54.6 115.4
Cash received (48.7) (62.3) (134.1)
Revisions to estimates 1.4 (0.1) 0.1
Unwind of discounting 2.3 2.0 3.8
Balance carried forward 142.5 153.8 144.8
In the six month period to 30 September 2025, the assumptions, estimates and
methodology for valuing product protection plans have not changed from those
at 31 March 2025 and hence disclosures in note 22 of those financial
statements remain relevant. An immaterial £0.1m increase in previously
unrecognised revenue has been recorded in the period as the model is trued up
for actual data.
For network commissions, management have reassessed their assumptions with
regard to average customer tenure based on latest data and have revised
estimates based on this updated information. This has resulted in the
recognition £1.3m of previously restricted revenue. All other assumptions and
estimates used at 31 March 2025 remain relevant.
6. Trade and other payables
£m 30 September 2025 30 September 2024 31 March
2025
Trade payables 168.7 159.3 128.2
Accruals 26.9 28.8 24.6
Advanced payments on account 19.4 23.7 22.8
Deferred income 24.2 22.2 20.9
Other payables 13.2 13.9 16.3
252.4 247.9 212.9
Advanced payments on account includes payments on account from Mobile Network
Operators and our product protection plan provider where there is no right of
set off with the contract asset.
The trade and other payables are classified as:
£m 30 September 30 September 2024 31 March 2025
2025
Current liabilities 248.0 245.8 207.7
Long-term liabilities 4.4 2.1 5.2
252.4 247.9 212.9
7. Net funds/ (debt) and movement in financial liabilities
30 September 30 September 31 March
2024
£m 2025 2025
Cash and cash equivalents 79.6 43.1 27.4
Borrowings - Repayable within one year (0.2) (0.2) (0.2)
Borrowings - Repayable after one year (1.6) (1.8) (1.7)
Owned asset lease liabilities - (2.4) (0.9) (0.7)
Repayable within one year
Owned asset lease liabilities - (10.3) (1.7) (1.4)
Repayable after one year
Net funds excluding right of use lease liabilities 65.1 38.4 23.4
(excluding leases relating to right of use assets)
Right of use lease liabilities - (15.4) (15.9) (17.7)
Repayable within one year
Right of use lease liabilities - (34.7) (40.4) (41.5)
Repayable after one year
Net funds/ (debt) 15.0 (17.9) (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.
8. Share capital, share premium, Investment in own shares and Capital
Redemption Reserve
Number Share Share Capital Redemption Reserve
of shares capital premium Investment in own shares £m
m £m £m £m
At 1 April 2025 580.3 1.5 108.5 (10.9) 0.5
Purchase of shares by EBT (Including transaction costs) - - - (4.2) -
Transfer of own shares - - - 0.5 -
on exercise of options
Cancellation of shares (0.3) - - - -
At 30 September 2025 580.0 1.5 108.5 (14.6) 0.5
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 will be used to satisfy options under the
Group's share schemes.
As at 30 September 2025, the number of shares held by the EBT was 14,956,107
(31 March 2025: 11,161,642).
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 is to reduce the share capital of the
Company and therefore it intends to cancel the shares purchased under the
programme.
At 30 September 2025, 690,189 shares had been purchased for £0.7m. On 21
November 2025, this had increased to 4,711,236 shares for £4.9m.
9. Principal risks and uncertainties
There are a number of potential risks and uncertainties which could have a
material impact on the Group's performance over the remaining six months of
the financial year and could cause actual results to differ materially from
expected or historical results. The Directors do not consider that the
principal risks and uncertainties have changed materially since the
publication of the Annual Report for the year ended 31 March 2025.
The principal risks as set out in the Annual Report are summarised below and
further information on these together with information as to how the Group
seeks to mitigate these risks is set out on pages 22-26 inclusive of the
Annual Report and Accounts 2025 which can be found at www.ao-world.com
(http://www.ao-world.com) :
· Risks relating to the UK electricals market encompassing a
challenging macro-economic environment and competitive conditions.
· Risk relating to IT systems resilience, cyber security and
agility.
· Risks relating to compliance failures or to changes in laws and
regulations, in particular Data protection and privacy legislation, the basis
upon which the Group offers and sells product protection plans and driver
employment status.
· Risks relating to our culture and people.
· Risks of business interruption.
· Risks relating to our key commercial relationships and supply
chain.
· Risks in relation to significant accounting matters including
revenue recognition and contract asset recoverability in relation to product
protection plans and revenue recognition and contract asset recoverability in
relation to network commissions.
Responsibility statement
Responsibility statement of the directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
· The condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
UK;
· The interim management report includes a fair review of the
information required by:
o DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
o DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
On behalf of the Board
John Roberts Mark Higgins
Founder and Chief Executive Officer Group Chief Financial Officer and Chief Operating Officer
24 November 2025 24 November 2025
INDEPENDENT REVIEW REPORT TO AO WORLD PLC
Conclusion
We have been engaged by AO World Plc ("the Company") to review the condensed
set of financial statements in the half-yearly financial report for the six
months ended 30 September 2025 which comprises the Condensed Consolidated
Income Statement, Condensed Consolidated Statement of Financial Position,
Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated
Statement of Cash Flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2025 is not prepared,
in all material respects, in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the UK and the Disclosure Guidance and
Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the
UK FCA").
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 Review of Interim Financial Information Performed by the
Independent Auditor of the Entity ("ISRE (UK) 2410") issued for use in the
UK. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the other
information contained in the half-yearly financial report and consider whether
it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention that causes us to believe that the directors
have inappropriately adopted the going concern basis of accounting, or that
the directors have identified material uncertainties relating to going concern
that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410. However, future events or conditions may cause the Group to
cease to continue as a going concern, and the above conclusions are not a
guarantee that the Group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are
responsible for assessing the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. Our conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit procedures, as
described in the Basis for conclusion section of this report.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company for our review work, for this
report, or for the conclusions we have reached.
Roger Nixon
for and on behalf of KPMG LLP
Chartered Accountants
1 St. Peter's Square
Manchester
M2 3AE
24 November 2025
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