AO World Profits Soar Due to TV and Tumble Dryer Boom

The online electrical goods firm AO World has seen a massive increase in profits, nearly tripling its earnings thanks to a surge in sales of tumble dryers. The company reported a 186% rise in profits to £34.3 million in the 12 months leading up to March, up from £12 million the previous year.

AO World, which sells 15% of all domestic appliances in the UK, attributed the boost in sales to a long wet winter that drove up demand for tumble dryers. Additionally, the company noted that TV sales were also on the rise due to the Euro 2024 championships.

Despite facing challenges such as supply chain disruptions and labor shortages, AO World has undergone a cost-cutting regime to improve profitability. The company made cuts in its workforce, closed several offices, and exited the German market in 2022.

Shares in AO World rose by 1.1%, indicating investor confidence in the company’s turnaround efforts. However, the stock price is still below its 2014 flotation level, showing that there is room for growth.

In comparison, another London-listed group, Marks Electrical, reported record annual sales but saw a decline in profits as consumers remain price-conscious. The company’s profits fell by 33% to £5 million despite a 17% increase in revenue to £114 million.

Overall, the electrical goods sector is experiencing a mix of challenges and opportunities, with companies like AO World making strategic moves to adapt to changing market conditions and consumer behavior.