AO World (LSE:AO.) expects revenue for the six months to 30 September to rise 5.5% year-on-year, with pre-tax profit up more than 20% to approximately £21.5m, according to a pre-close trading update ahead of its annual general meeting.
The UK electricals retailer said the improvement reflects operational gains in its Mobile and musicMagpie businesses, though full-year profit expectations remain unchanged given planned investments, including an ERP programme, and a tougher comparative period in the second half.
AO expects to end the period with more than £200m of liquidity headroom, after paying a £10m dividend in June and completing half of its ongoing £10m share buyback programme.
The company also confirmed it has completed the acquisition of Jessops, the specialist photography retailer, from Peter Jones CBE, funded from existing cash resources. Jessops' recommerce arm, Camera Jungle, is described as complementary to AO's existing musicMagpie operations.
"Group revenue is up over 5%, profit is up more than 20% and cash generation remains strong," John Roberts, AO's founder and chief executive. He, added that the company is "firmly on our path to over 5% PBT margin as our next milestone."
AO World will publish its half-year results to 30 September on 24 November.