(Reuters) -Online electricals retailer AO World signalled a robust start to the new financial year on Thursday after almost tripling annual profit on strong demand for home appliances and office products due to the COVID-19 pandemic.
Shares of the company more than quadrupled in value in 2020 as it benefited from Britons working from home during the global health crisis. Investor focus is now on its expansion plans as AO World gears up for the new normal https://www.reuters.com/world/the-great-reboot.
In the year to March 31 its adjusted core profit rose to 64 million pounds ($88.4 million) from 22 million pounds a year before, it said, while confirming that group sales jumped 62%.
The British company, which sells laptops, washing machines, mobile phones and printers, said on Thursday it had started the new financial year "well", and remains "prudently optimistic" that it can deliver double-digit growth this year.
It said it hopes to more than double in size in the next five years and to operate in five countries, including its existing markets of Britain and Germany.
"We firmly believe that once people experience a better way to buy electricals, they are unlikely to return to old ways of shopping," said founder and Chief Executive John Roberts.
With the pandemic forcing people cooped up at home to pursue home entertainment and gaming to keep themselves busy, demand for technology has soared. A shift to a mix of office and home work will also keep gadget demand steady, analysts have said.
The London-listed company intends to spend more on marketing to tap this demand, and has set aside 30 million pounds for use this year, with another 30 million pounds earmarked to upgrade its support systems, it said.
Rival Dixons Carphone also said its annual profit also jumped by a third and reported strong current trading on Wednesday.
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Amy Caren Daniel and Jan Harvey)