Bolton’s AO has said its cost-cutting drive is paying off with its third hike in predicted annual earnings in around as many months.
The electrical retailer said in a statement to the LSE that it now expects underlying earnings to be in the range of £37.5m to £45m for the full year, up from the £30m to £40m predicted last month.
AO had already increased earnings guidance in November and again in January as its turnaround plan to strip out costs has been bearing fruit.
The improved outlook follows a range of cost-cutting measures designed to save around £30m after the company recorded a £12m loss for the first half of the financial year amidst the cost-of-living crisis and labour and supply chain difficulties. The measures included closing its loss-making German operation and axing several senior and middle management jobs.
The firm also ditched unprofitable product lines while introducing delivery charges and cutting cashback incentives to reduce the cost of sales.
The statement added: “The steps we have taken to simplify the business and become more efficient have outperformed expectations and been delivered quicker than expected.”
“Margin improvement initiatives coupled with a continued resilient underlying customer base has driven higher retail gross margins than previously expected and we anticipate that this will continue for the remaining five weeks of the financial year.”
