ao..ST today...pt110 Jul 2022 21:29
After three days watching AO’s shares get trashed last week, John Roberts could have been forgiven for wallowing a little. But when the online retailer’s ever-chirpy chief executive and founder dialled into his monthly managers’ meeting on Thursday, he launched a rallying cry in what he calls his “candid Boltonese” style.
“I was like, ‘This is galvanising! Come on! Let’s go and prove them wrong and prove the investors who backed us right,’ ” Roberts, 48, said.
While he is eminently comfortable playing the scrappy underdog taking on the establishment, AO’s Energizer Bunny has had a difficult week.
Last week The Sunday Times revealed that Atradius, a credit insurer, had cut its cover for suppliers to AO. The news catalysed a market sell-off as investors feared that the Bolton-based retailer’s cash reserves would be drained should nervy suppliers start to demand to be paid upfront. Roberts insisted that such fears were ill-founded.
However, AO’s evangelical founder is steering a ship sailing into choppy waters. Big-ticket items are bearing the brunt of a slowdown in consumer spending, just as costs for businesses are spiralling. A jump in energy bills in October, and the increased cost of imports after a fall in sterling, will only add to the pain.
AO shored up its balance sheet on Wednesday by tapping investors for £40 million in return for discounted shares. The shares finished a bruising week 37 per cent lower at 43p, valuing AO at £206 million — a far cry from its £1.2 billion float. Can Roberts steer the one-time stock market darling away from danger?
He left grammar school halfway through his A-levels and got a job in the warehouse of a kitchen supplier, before working his way up into the sales department. In a pub on Christmas Eve in 1999, aged 26, he was moaning about his work to a friend who bet him £1 he would not start his own business. Appliances Online was born the next year.
Roberts won early backing from Bill Holroyd, a serial investor and associate of his father, who was bowled over by the young entrepreneur’s sales skills.
“When you meet him, he comes off as brash because he is so confident,” Holroyd said. “John can argue the back legs off a donkey, but if his argument is wrong he can be persuaded. He does listen.”
In 2014, Roberts swaggered on to the public markets with City fund managers lapping up AO shares. The man who boasted of his ability to function on “little sleep and lots of booze” was suddenly halfway to becoming a billionaire. As critics lined up when the float did not deliver on its lofty promises, Roberts said he “didn’t give a ****” whether fusty old fund managers bought AO’s shares.
Crispin Odey, a hedge fund manager, recalled: “John thought we were ignoramuses and we thought he was a jumped-up idiot.”
Odey Asset Management owns about 18 per cent of AO, and bought almost 24 million shares as part of last week’s placing. “I actually have a lot of respect for John,” Odey said. “He is a great motivat
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