Ao World Share Discussion Threads

[dlku] 25/11/2015 00:19

no he closed at 300p

[tim 3] 25/11/2015 00:03

Wonder if Simons still short ?

Guesiing he is.

[dlku] 24/11/2015 23:54

is it finished? Will credit insurance be revoked?

[staverly] 24/11/2015 23:35

One other thought ... their membership of FTSE-250 IMO looks endangered ... next 1/4 re-shuffle (early Dec ?) DYOR

[tim 3] 24/11/2015 23:07

I don't short for reasons I won't bore you with but for the following reasons I see this as a blatant short.

They are not profitable at present and there is no clear timeline as to when they will be profitable.

The German expansion which they say is on schedule is again unprofitable and again they give no indication as to when it will make money.

There is virtually no room to reduce overheads.

They operate in a fiercely competitive market with virtually no room to increase prices/margins.

Their main source of profit is probably warrenties and the opportunity for upside here is some what limited but the risks in this area are considerable with more regulation possible and products becoming more reliable.

The new overseas markets are risky look what happened to Dixons when it expanded to quickly it had to retreat out of many markets as a cost.

Most agree they are not cheap they and they don't pay a dividend,the market hyped them up as a pure internet play but that could easily change if the sector gets hit.

Once these start falling I can see it getting ugly as there is very little fundamental support to hold them up.

Time will tell and I could be totally wrong nobody knows for certain in this game but I think they will fall heavily at some point.

[rjmahan] 24/11/2015 22:10

staverly between 08 and 2010 eps on ASC had risen from 6.95 to 18.7.

AO hasnt made anything....

I am short and expect it to fall more tomorrow...

As a customer I have found them very cheap £40 less than nearest competitor on my washing machine. I want them to be cheapest - they go bust faster!

[staverly] 24/11/2015 16:04

For a better sense of perspective, when ASOS first hit a similar valuation in June 2010 - so just after FY10 ann. (£8 @ 74.7m shares), recall many observers felt Robertson's brainchild was richly valued on TTM P/E x42. And ASOS clearly had a viable future; does AO. ? Unquestionably the most mawkish AR I've seen in a long time.
IMO, even £600m m/cap still looks ridiculous.
I'm short.

[hpcg] 24/11/2015 12:41

No borrow on IG but I was able to short on City Index.

[m.t.glass] 24/11/2015 12:02

Spreadex taking downbets. IG might if you phone.

[m.t.glass] 24/11/2015 11:10

At present they seem able to get away with "expansion costs" as an excuse for losses. Each time they come out with a loss they can point to another new territory, to maintain the image of ongoing growth, and convince some that it will all come good eventually. As if getting big and famous worldwide takes priority over making and sharing profits.

[my retirement fund] 24/11/2015 11:03

I can see this outfit will go bust in a few years time. Margins are going to become slimmer and tighter and the death spiral is gathering a pace

[tim 3] 24/11/2015 11:01

Also add on sales where Currys make most if not all their money are usually much lower online.

[m.t.glass] 24/11/2015 10:58

Don't rely on price comparison websites, where AO do sometimes look good. Do a personal comparison with specific rivals and AO are not particularly competitive - nor do they appear to have the kind of margin that would allow them to do much about that.

[tim 3] 24/11/2015 10:50

Bought my last TV from Currys they were already cheaper than ao and they pricematched Tesco online for a further fifty quid off and I could see it and take it home there and then.

[dvb99] 24/11/2015 10:32

£670m market cap for a white goods reseller that doesn't make a profit!!!!

[m.t.glass] 24/11/2015 10:21

"... While the company has sought to win over investors, some commentators remain unconvinced and have warned that it could struggle to compete during Black Friday this week (27 November) because of its relatively poor brand awareness and low positioning on Google..."

(cityam.com)


As a company totally dependent on its online activity, the slightest technical glitch on this hectic Friday will hit AO harder than its rivals.

Last week I took delivery of a new AEG tall stainless steel fridge - bought from Curry's at a better price than AO, delivered promptly. AO were also not the best deal on two previous appliance purchases I made.
EDIT: AO were 5.27% dearer than Curry's on exact comparison, including same AEG cashback offer. AO's boast of being best on price because of no street overheads is a myth. Check it out on any large appliance.

[hpcg] 24/11/2015 09:11

Even the revenue growth is awful. High fliers can get away with no profit if they are re-investing and revenue is growing fast. Not only that but as revenue rises, margin should be increasing as fixed costs are diluted. What do we see here:

UK revenue up 14.5% - barely any growth
UK EBITDA down 33%
UK margin down to 2%

Then as you say dlku, cash is burning not increasing. A sustainably growing business generates cash to reinvest.

[m.t.glass] 24/11/2015 08:46

After corkscrewing sideways for 10 weeks around that 160 line.. might reasonably have been expected to show a step change (say 25p) upward or downward on issue of a half-year trading statement..

[argylerich] 22/11/2015 22:07

Or Ocado...

[tim 3] 22/11/2015 14:27

Exactly you can give the best customer service anywhere but if the business model dont make a profit your stuffed.(unless your Amazon ;)

[hpcg] 16/11/2015 06:28

Septimus - I'm flat here at the moment, and I also have had goods from AO and was very happy with the service. For investors though it has to make a profit and there seems no sign of that happening.

[septimus quaid] 14/11/2015 10:02

Not a holder and no real reason to do AO any favours but, credit where credit's due, having recently received an appliance from AO, I would say their delivery service is exemplary.

You get access to an app style website which, starting from a three hour delivery slot, narrows down to half an hour. The app has a map which shows you where the delivery van is relative to your property and how many drop-offs between you and same. You get a courtesy call, which in my case was about an hour and a half before delivery, giving a time (which I probably could have set my watch by).

Quick efficient drop off and they're off on their way.

Compared with Hotpoint who give you a "take it or leave it" three hour slot with a call centre which is very bad to get through to.