A Christmas delivery alert has been issued by an online appliance retailer.
AO WORLD has issued its second profit warning in as many months, claiming that it will struggle to meet demand during the Christmas season.
AO reported a pre-tax loss of £10 million, with revenues rising only 6% to £760 million, despite the worldwide boom in online shopping.
It blamed a shortage of lorry drivers and increased competition in Germany in its half-year results released yesterday.
AO’s net debt has also risen from £21 million to £102 million.
The UK’s largest online electricals retailer has warned that the supply chain crisis will result in low availability, especially for new products.
Because of the driver issue, rising shipping costs, manufacturers raising prices as raw material costs rise, and spiraling inflation, it believes that demand will be weaker in the run-up to Christmas and New Year than expected in early October.
AO now expects full-year revenues to be flat to 5% lower than last year, with earnings before interest, taxes, and write-offs of £10-£20 million, down from £35-£50 million just eight weeks ago.
“The constraints and uncertainty seen across our industry have inevitably affected our results over this period,” said AO founder and CEO John Roberts.
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“We’re working hard to address some of our industry’s current issues.”
We’ve hired around 500 new drivers and are collaborating with our manufacturer partners to ensure that customers get what they need.”
This year, the value of AO’s stock has plummeted by almost 75%.
“The white-knuckle ride continues for investors,” said Interactive Investor’s Richard Hunter. “The company is currently in a parlous position.”
“The supply chain disruptions have had a significant impact, with a shortage of delivery drivers being one of the most pressing issues.
Its entry into the German market is not only in its early stages, but it is also up against a lot of competition.”