AO builds £15m Brexit stockpile
Online electrical retailer AO has revealed that it has stockpiled some £15 million worth of its fastest moving products as part of its Brexit planning, warning that this is having an impact on its cash position.
In a trading update for the 12 months to 31st March, the Bolton-based company said that while group revenue was expected to some £900m, a 13 per cent rise on last year, adjusted EBITDA would be at the lower end of market expectations.
John Roberts, chief executive, AO.
On Brexit, it said: “As part of our Brexit contingency planning, during the last quarter of FY19 we increased our usual core fast moving inventory levels by c.£15m, with a corresponding impact on our cash position. This will help ensure we can continue to deliver our market-leading proposition to our customers.
Following the re-appointment of founder John Roberts as chief executive in January 2019 it has restructured its management team and, as a result of this together with charges for a loss making contract which we are unable to terminate in Germany, it anticipates incurring £2.5m exceptional costs.
Roberts said: “”Over the last eight weeks we have created a mindset shift from the numbers delivered in FY19; we are setting about realising our opportunities with pace and energy. I am delighted by the reaction of AO’ers and their passion for our future. We have already announced that we are testing a genuinely disruptive rental proposition.”