Operating profit at AO World has jumped by 192% to £36.2m in the year to 31 March, as the firm has focused on profit and cash generation.

The Bolton-based electrical retailer also saw its profit before tax increase by 186% to £34.3m, while its net funds also increased 855% to £34.4m.

Although revenue dropped by 9%, the firm said this was in line with expectations, following actions taken to remove non-core channels and loss-making sales.

Despite the annual drop in revenue, AO World noted that it returned to revenue growth in Q4.

Founder and chief executive at AO, John Roberts, said: "We have made good progress on our profit performance in FY24, which is a testament to the success of our strategic pivot to focusing on profit and cash generation.

"We are now a much simpler, more efficient business and are performing better than ever for customers, with excellent and sustainable unit economics. Our focus now is on delivering profitable top line growth with an ambition for double digit revenue growth in FY25."

Looking forward, the firm said its objectives remained unchanged, despite the "ongoing macroeconomic challenges", stating that it is confident that it will achieve an adjusted profit before tax of between £36m-41m in the 2025 financial year.

It also reiterated its medium-term guidance of an adjusted profit before tax margin, double digit growth and earnings per share growing faster than revenue.

Head of markets at interactive investor, Richard Hunter, added: "AO World’s strategic and decisive actions to focus on profit and cash generation are now fully washing through, after the group reshaped its business model.

"In particular, the previous decisions to exit the German business, and remove its non-core channels and loss-making sales were difficult but necessary actions. To add to the challenge, these were compounded by a weakening of consumer sentiment, as well as a slight shift away from online purchases as customers reverted to physical shopping, as evidenced by many retailers over recent months.

"With much of the heavy lifting now completed in revitalising the business, AO World can now move on to the next phase of its development, although its mobile operations will need some care and attention."

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