AO World reported its interim results for the 6 months ended 30 September on Tuesday, which saw the company state profit for FY23 now expected to be around the top end of guidance.

Shares of AO World increased more than 15% following the announcement.

The electrical retailer reported group revenue declined 17% to £546 million, compared to £661 million in the prior year quarter. In addition, the company said it has now moved to simplify its UK business, focusing on more profitable lines of business that fit its core model.

The group reported a loss before tax of £12 million, wider than the £4 million loss before tax reported in the previous year.

AO Founder and Chief Executive John Roberts said: “During the first six months of the year, we’ve made good progress with our strategic realignment as we focus on profitability and cash generation, all of which is yielding the results we expected.

“We’ve now closed the loss making and cash consumptive parts of our operations meaning the remaining UK business is cash generative, and are successfully closing our German business with a minimal cash impact to the wider Group.”

As for its outlook, the company stated that it is not immune to the challenging and uncertain consumer environment, and it expects to continue to be impacted by the cost of living crisis affecting consumer spending, as well as by ongoing supply chain issues.

However, it expects adjusted EBITDA at the top end of the previously guided £20 million to £30 million range. Meanwhile, its medium-term ambitions (to deliver average revenue growth of 10+% per annum, with an EBITDA margin of 5+% and improved cash generation) remain unchanged, and the company expects to achieve the first ambition (5% EBITDA) in the next financial year.

“While the short-term outlook remains challenging, I’m confident that our strategy is the right one, and as we position ourselves to be the UK’s most trusted electrical retailer we look to the future with cautious optimism,” concluded Roberts.