Where next for AO World shares ahead of its annual results

AO World full-year earnings: when will they be released?

AO World will release preliminary results covering the 12 months to the end of March on the morning of Thursday July 1. The results were originally due to be released in the middle of June but were pushed back to provide more time for the auditing process, which has been disrupted by the pandemic.

What to expect from the AO World results

AO World, the largest online-only seller of white goods and electricals in the UK, has come into its element during the pandemic as consumers were forced to shop for everything from fridges to tablets online whilst stores were closed. That naturally played into AO World’s strengths and the company ensured it capitalised by investing in its digital capabilities and capacity soon after lockdown hit.

AO World has already revealed that revenue jumped 62% in the year to £1.66 billion. Importantly, momentum has continued to improve as the year went on. Revenue from its UK website was up 88% in the final three months of the year while its smaller German operation was up 77%, setting the stage for another year of strong growth.

The performance in the UK will be closely watched as lockdown rules have been eased and shops have reopened since the end of March, and investors will want to see evidence that people are still willing to buy big-ticket items online rather than in-store. Founder and CEO John Roberts said he expects the shift online will stick and that the business can deliver double-digit growth in the year ahead even as it comes up against strong comparatives following the boom in demand last year.

Meanwhile, the German business escaped the red during the year and is expected to turn its first, albeit likely small, annual profit when the results are released this week and investors will hope for a buoyant outlook for the division going forward.

AO World has also provided a glimpse into what to expect in terms of earnings, with adjusted Ebitda set to soar to a range of £63 million to £72 million, marking a huge improvement from the £19.6 million booked the year before.

Building on that guidance, analysts are expecting pretax profit at the bottom-line to jump to £40.1 million from just £1.5 million the year before and for EPS to soar to 6.24p from 0.38p.

Watch for any commentary around the outlook for the new financial year. Notably, the consensus among analysts shows they are expecting annual revenue to grow by over 12% in the year to the end of March 2022, while EPS is forecast to jump over 35%, implying markets agree that AO World can continue to deliver.

Where next for the AO World share price?

AO World share price has been trending lower since the start of the year. It trades below its multi-month descending trendline and below its 50 and 100 day ma showing an established bearish trend. The price has found a floor at around 230p which has limited losses on several occasions over the past month.

The MACD appears to be forming a bullish cross over keeping the buyers hopeful. Any recovery in the price would need to break above 258p the 50 sma and the descending trendline. A move above this level could negate the near-term downtrend. Beyond there buyers could look to break through 275p the 100 sma and late May high in order to target 300p.

A break below 230p could see the sellers target a deeper decline towards 200p resistance seen in mid-March.

How to trade AO World shares

You can trade AO World shares with City Index by following these four steps:

Open a City Index account, or log-in if you’re already a customer.
Search for ‘AO World’ in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.