Electronics retailer AO World flags drivers shortage, shares slump – Reuters

A truck is pictured outside the AO distribution centre in Crewe, Cheshire, Britain November 24, 2020. REUTERS/Carl Recine
Oct 1 (Reuters) – Online electronics retailer AO World (AO.L) warned on Friday of lower fiscal 2022 profits, the latest British firm to flag a hit from a shortage of lorry drivers that has disrupted supply chains, sending its shares sharply lower.
The company, which sells laptop computers, washing machines, mobile phones and printers, said annual adjusted core profit would be between 35 million pounds and 50 million pounds ($47.06 million and $67.23 million), compared with 64 million pounds it reported in fiscal 2021 on a demand boost during the pandemic.
Its shares tumbled 20% by 0732 GMT, hitting their lowest level in more than a year.
Britain's deficit of about 100,000 truckers after tens of thousands returned to the European Union following Brexit has left a gaping hole in supply chains and affected numerous businesses either directly or indirectly.
AO World said revenue in the first half of the year rose about 5%, on a like-for-like basis, adding that it expected growth in the second half to be at a similar rate.
AO World had benefited from the surge in demand for electronics and home appliances during the pandemic, with the company saying in July it was optimistic that it could deliver double-digit growth this fiscal year. read more
"The challenging market dynamics in both the UK and Germany resulted in lower volumes than expected which affected operational leverage, particularly in the second quarter," the company said in a brief statement.
However, AO World said it was "well placed" to meet customer demand during the Christmas period as it put in place measures to mitigate problems in logistics operations.
"While the softer-than-expected performance is partly driven by external factors, overall, in our view, this update will come as a disappointment, given the extent of the recent slowdown," analysts at JP Morgan wrote in a note.
The group's half-year revenue was up about 66%, compared with pre-pandemic levels two years ago.
($1 = 0.7438 pounds)
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