Founded in 2000 by CEO John Roberts, AO World has grown to be a major online retailer of major domestic appliances (“MDA”) such as washing machines and fridges with 16% market share. The company also sells a wide variety of small domestic appliances (“SDA”), televisions (“AV”), mobile phones, consumer electricals and laptops. With a focus on brilliant service and two-person delivery, installation and recycling, the group has received over 500,000 Trustpilot reviews with an impressively high average score of 4.9/5. The group has also invested in its own recycling centre (“WEEE processing facility”), ensuring customers’ electronic waste is dealt with responsibly.

25 Nov 2025

5* strategy delivers another profit upgrade

AO’s impressive H126 results show strategic, customer-focussed progress. 14% revenue growth reflects market share gains, and Adj. PBT rose 10% despite payroll cost headwinds.

AO's differentiated 5* membership programme and sustained 5* customer service underpin its success, whilst improved profit trends in mobile and musicMagpie contribute to the positive outlook.

We raise our FY26E Adj. PBT and Adj. EPS by 4%-6% and forecast AO will generate over £150m cumulative FCF FY26E-FY28E and a 21% CAGR in Adj. EPS FY26E-FY28E. Yet it trades on only c.14x cal 2026 PER, falling to c.11x cal 2027 PER, which we believe significantly undervalues AO’s growth prospects. Our Fair Value / share increases for the second time in three months, from 160p to 170p (a cal 2026 FCF yield of c.5%).

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