Ao World Share Price (AO.)

Detailed research note available here: https://www.equitydevelopment.co.uk/research/ready-to-grow-lets-go

AO is the UK's leading online retailer of major domestic appliances such as washing machines and fridges and has built a fantastic reputation for excellent customer service over the last 20 years.

AO has successfully completed its "Pivot to profit" strategy and has emerged a more lean and focused business. AO is now well positioned to return to growth, and their excellent customer service and AO Five Star membership club offer will accelerate repeat customer purchases across a broad range of electricals. AO will report FY results on 26 June and has exited FY24E with good momentum.

This underpins our forecast revenue CAGR of 13% FY24E-FY27E and our Adj. PBT CAGR of 26% FY24E-FY27E. As a capital-light online retailer, we predict over 80% of Adj. PBT converts to free cashflow (“FCF”) resulting in over £130m FCF FY25E-FY27E.

We initiate coverage with a Fair Value of 140p based on a 5% cal 2025 FCF yield, equivalent to c.11x cal 2025 EV/EBITDA and c.22x cal 2025 PER, under 1x our EPS CAGR FY24E-FY26E.

Shareholding / "investment" decision is predominantly driven by profit shown in account but volume of service coverage is rather correlated derivative than top priority on a checklist. customers might be happy but investors quite often not unfortunately, simply because there's no adequate return on investment or sometimes even worse - permanent capital loss. That's if this approached in a classic way (instead of "green"/"eco"/socially responsible hype and similar sponsorships).

And wanted to say something here. I've recently re-done my kitchen. I've bought all my appliances from AO and they have been outstanding with service. I've had to return a few items purely my fault for not taking everything in to account when installing etc, and they've been wonderful each and every time. I live in SW London, and they are constantly delivering appliances around where I live. I came on here today thinking I would buy some shares to show some support, and am astounded to see suggestions that AO are doing so badly allegedly. I can't see how that can be, because as I say, they are constantly delivering where I live, as there are flats close by to where I am, and they are constantly delivering there, so I cannot imagine they are risking admin or anything of the like. Will buy a few shares to show solidarity here.

Https://www.sharecast.com/news/broker-recommendations/shore-capital-upgrades-ao-world-to-buy--16575509.html

This company has been on the slippery slope from day one. Sure, they can keep on adding more product categories, but when the margins are non-existent it doesn't matter. A turnover of £1.2bn and profit £6.4mn?