AO World raises profit forecast and announces first-ever share buyback
Bolton-based online retailer upgrades full-year profits and plans up to £10m repurchase as it leans on AI and offshoring to manage rising costs
AO World said it has raised its full-year profit outlook and will launch its first-ever share buyback as the online electricals retailer reported stronger interim revenue growth and outlined cost-management steps.
The group said revenues in the six months to Sept. 30 are set to be about 13% higher than in the same period a year earlier and that it now expects full-year profits of between £45 million and £50 million — at the top end of previous guidance of £40 million to £50 million. AO has proposed buying back up to £10 million of its own shares.
John Roberts, AO's founder and chief executive, said the group’s strategy is delivering and pointed to "an exciting pipeline of further value to deliver for customers in the second half." The company is holding its annual general meeting on Monday and will publish first-half results on Nov. 25.
The revised outlook takes account of the recent acquisition of Music Magpie, and the company said the updated profit range compares with reported profits of £45 million in 2024-25 on a basis that excluded Music Magpie. The buyback is the first in the company’s history and was presented as a move to boost returns for shareholders.
AO flagged a combination of operational initiatives to protect margins against higher labour costs, including increased use of artificial intelligence and a greater degree of offshoring. The group disclosed last year that rising national insurance contributions and an increased minimum wage would add roughly £8 million in annual costs from April. AO said in the summer it was recruiting but that some roles created would be likely to be located outside the U.K.
AO reported record annual results for the year to March 31, saying underlying pre-tax profit rose 32% and like-for-like sales increased to £1.11 billion. The company has signalled that it will seek further efficiencies through technology and overseas resourcing while continuing to invest in customer-facing services.
Analysts said the combination of an upgraded profit forecast and a share buyback typically signals management confidence in cash generation and returns to investors, although AO’s decision to offshore some work has drawn attention after the group had previously emphasised U.K. hiring. The company has not announced job cuts and maintained it is recruiting to support growth.
AO’s half-year trading update and the formal release of interim results on Nov. 25 will offer fuller detail on the contribution from Music Magpie, the scale and timing of the buyback, and the expected benefit from AI and offshoring measures. For now, the group’s statements indicate an improved revenue trajectory in the first half of the financial year and a willingness to use buybacks to return surplus capital to shareholders.