AO said that it had fallen £10million into the red on a pre-tax basis, while its revenues had grown just six per cent to £760million despite the pandemic boom in online shopping. At its half-year results yesterday, it blamed the shortage of lorry drivers and increased competition in Germany.
Additionally, AO’s net debt has ballooned from £21million to £102million.
The UK’s largest online electricals retailer warned that the supply chain crisis means that it will have poor availability, particularly for new products.
It believes that demand will be weaker in the run-up to Christmas and New Year than expected early in October because of the driver issue, rising shipping costs, manufacturers putting up prices as raw material costs rise and spiralling inflation.
AO now forecasts that its full-year revenues will be between flat and down five per cent on last year, while earnings before interest, taxes and write-offs will be £10-£20million, compared with the £35-£50million it predicted just eight weeks ago.
AO founder and chief executive John Roberts said: “Our results over this period have inevitably been affected by the constraints and uncertainty seen across our industry.
“We’re working hard to solve some of the current challenges that our industry is facing. We’ve recruited around 500 new drivers and are working closely with our manufacturer partners so that customers can get what they need.”
AO’s shares have lost nearly 75 per cent of their value this year.
Interactive Investor’s Richard Hunter said: “The white-knuckle ride continues for investors.The company is currently in a parlous position.
“The supply chain disruptions have had a severe impact, with a shortage of delivery drivers a particular issue. Its foray into the German market is not only in the early stages, but is also being faced by significantly increased competition.”