AO WORLD yesterday said it was "cautiously optimistic" as the online electricals retailer revealed that moves to slash costs have helped the firm's profits surpass expectations.

Last year, the Bolton-based electrical retailer closed its lossmaking German business and launched actions designed to save at least £30m a year by 2023-24, including axing a raft of senior and middle management jobs.

In November, the firm posted widened losses after it was hit by sliding sales and the impact of labour shortages and supply chain disruption.

The retailer yesterday told investors that sales slipped again over the latest quarter as it failed to keep up with pandemic-boosted levels.

AO said revenues dropped by 17.2 per cent over the three months to 31 December, compared with the same period last year.

It said the sales slump was in line with the board's expectations.

Meanwhile, it said it now expects to deliver adjusted earnings of between £30m and £40m as it benefits from reduced costs.

The company said it was on track to deliver earnings at the top of a £20m to £30m range in its previous update.

In a statement, the firm said its actions to improve margins were "gaining traction", with profitability "running ahead" of previous expectations, Shares tumbled after the update, closing down 5.39 per cent.

PA

(c) 2023 City A.M., source Newspaper