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.

18 Jun 2025

Undervalued 5* power

AO’s FY25 results illustrate the power of its excellent customer service, rated 4.9/5 on Trustpilot.

12% growth in B2C Retail revenues and a focus on improved unit economics has led to LFL Adj. PBT rising 32% to £45m - and margin +80bps to 4.1%.

As already announced, FY26E will bring significant cost headwinds and so Adj. PBT guidance is £40m-£50m (we are unchanged at £45m). However, the medium-term outlook for AO is encouraging given the revenue momentum and opportunity for further margin expansion.

Trading on under 15x Cal 2026 PER and a 7.5% Cal 2026 FCF yield we believe AO is significantly underrated and we reiterate our 150p fair value, equivalent to a cal 2026 FCF yield of 5%.

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