AO World - Profitable, cash-generative, customer-led results
AO World delivered an impressive FY26 performance ahead of prior guidance, demonstrating strong strategic execution and a confident outlook supported by a strong working capital performance and customer‑led growth.Key financial metrics were robust. Revenue grew c.11%, with adjusted PBT of c.£50m, EPS of 6.1p, and free cash flow of c.£65m.
AO’s strategy continues to deliver. Performance was underpinned by excellent customer service, evidenced by nearly one million Trustpilot reviews, alongside sustained trading momentum and energy hedging providing resilience into FY27E.
The 22% fall in AO’s stock price so far this year leaves the stock trading on only 0.4x EV/Revenues, c.6x EV/EBITDA and c.12x PER (all cal 2027), significantly below our 170p Fair Value per share (equivalent to a c.5% cal 27 FCF yield).
AO World is an electrical retailer. Co. sells major domestic appliances (such as freezers) and small domestic appliances (such as air treatment) and consumer electronics in the U.K., Germany and the Netherlands and delivers them via its in-house logistics business and third parties. Co. also provides ancillary services such as the installation of new and collection of old products and provides product protection plans and customer finance. Via its facility, Co. is also able to carry out the recycling of waste appliances. Co. has two reportable segments: online retailing of domestic appliances to customers in the U.K.; and online retailing of domestic appliances to customers in Europe.
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