AO World full-year results: where next for the AO World share price?

AO World has been one of the stronger performers since the pandemic started, naturally benefiting thanks to its online model, but shares have struggled to find higher ground since hitting an all-time high in January. How will AO World shares react when results are released this week?

Charts (4)

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:

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

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