Online electricals firm with huge Telford recycling plant on track for '£45 million profit'
Online electrical retailer AO World, which operates a huge recycling plant in Telford, says it's on track for full-year profits of more than £45 million.
The firm has upped its annual profit outlook, while also unveiling plans to boost investor returns with its first ever shares buyback.
It now expects full-year profits of between £45 million and £50 million, at the top end of previous guidance for between £40 million and £50 million, compared with around £45m last year.
AO Recycling, a subsiduary which was set up in 2017 as part of the firm's strategy to meet strict new recycling targets, employs around 250 people at its recycling plant in Halesfield in Telford.
The Telford facility is AO’s main recycling plant, and mainly processes large household appliances such as fridges, washing machines, and cookers, collected from AO’s delivery network and other sources.
In an update to markets AO World, which is holding its annual general meeting today (Monday), said it planned to buy back up to £10 million in shares, marking a first for the group.
The retailer said group revenues are expected to be 13 per cent higher for the six months to September 30, with retail revenues also set to rise by 11 per cent.
The group will report first-half figures on November 25.
John Roberts, AO’s founder and chief executive, said: "Our strategy as set out at our full-year results is working and we have an exciting pipeline of further value to deliver for customers in the second half.
"Our Five Star membership programme continues to go from strength to strength as our customers realise the exceptional value that it offers. This, combined with our ongoing efforts to broaden our product range, is an increasingly key driver of our performance.
"None of this happens by accident and as always I am hugely grateful for each and every AO-er for their continued focus on, and passion for, delivering brilliant service to our growing customer base."
In June, AO World said it would "increasingly look to mitigate" increased staffing costs through "automation, outsourcing and offshoring", after claiming late last year that it was facing around an extra £8 million in costs a year from April’s higher national insurance contributions and minimum wage rise.
The firm said it had no plans to cut jobs and was continuing to recruit staff, but said some of these jobs would be likely to be outside of the UK.
The group notched up record annual profits in the year to March 31, reporting a 32 per cent rise in underlying pre-tax profits as like-for-like sales lifted 7 per cent to £1.11 billion.
