Ao World Share Discussion Threads

[effortless cool] 06/4/2018 15:13

Seems the market agrees with Rathean today!

[effortless cool] 06/4/2018 09:08

It was actually a very mediocre trading statement. Revenue marginally above expectations, adjusted EBITDA marginally below, and still nothing to indicate that this will ever be a viable business. I can't see any reason why anyone would want to hold these shares.

To my mind, the short thesis remains intact and I am happy to maintain my short position.

[rathean] 06/4/2018 08:48

Popular share? Decent trading state that without being spectacular. What is their debt position like?

[tjbird] 11/1/2018 13:41

like a kite

[clocktower] 11/1/2018 12:45

Today's RNS suggests that at last AO is on the road towards a profitable future, as critical mass seems to being achieved.

One of the big advantages is the AO Recycling facility, as the disposal problems increase for other small/medium sized sellers in the market.

[shepc] 23/11/2017 19:40

1.21 close, not bad, hit 1.02 last week, but don't follow why. Although can't seem to go far on the M6 without passing an AO. Lorry or even three.

[tim 3] 21/11/2017 14:00

So turnover up but so are losses seems a trend with these!

If there is some sort of correction then I believe shares like this with no profits and no dividend are probably just the type of share to get hit hard.

I stated earlier that they could be a target for DC at some point however I think they would have to fall a fair bit from here first as DC have their own problems at present and paying the current market value for a company that makes no profit would likely not go down well with shareholders but longer terms economys of size and increased online market share could be highly beneficial for them.Although DC has not had a great tack record in Europe so not sure how they would feel about getting involved there again!

[rathean] 21/11/2017 11:10

#Walbrock82 a good post re: CPW is simply a better business... for now. The question here is does one become a takeover target for the other? CPW is the UK market leader by a clear margin, would it consider buying AO to take the fight to bigger more profitable online competitors, Amazon being the obvious example?

[binarypilot] 06/11/2017 09:07

Whats a carphone?

[maddyc123] 06/11/2017 09:04

Any reason why share price has dropped today?

[walbrock82] 21/9/2017 14:11

Looking at AO World, there are a few reasons as an investor (not a customer) why you should invest in Dixons Carphone, instead.

Apart from Dixons paying you dividends and consistently produces profits. There are other things on AO World would raise some red flags, such as:

-During their IPO, the company raised £60m but paid the bankers £20m in fees, which is 33% of gross proceeds. And afterwards, the shares have consistently drifted lower.
-Also, during the IPO, their prospectus stated net income of £6.1m and soon after they never made a profit again.

You may think the company is investing a lot of capital to grow sales/turnover because, since 2011, sales did rose from £160m to £700m.
Think again, because since 2011 capex total £31m and depreciation total £21m, leaving £10m as growth capex.

In other words, AO World manages to utilise £1 to increase new sales of £54. Meanwhile, Dixons has a ratio of £1 = £19, and manage to produce profits.

To give some credit to AO World, their UK division is turning over a profit, but their European division is sucking all the profits out. Making matters worse is losses reported in Euros are exacerbated by weaker Pound upon conversion.
Still with a £500m valuation attach, investors should be seeing profits of £20m and profit growth of 30% EPS.

The above is a summary, and for the full version (including one major factor why I don’t like Dixons), the link is here

[saltaire111] 31/7/2017 15:40

Tim3 - good point, well made.

Just think that the likes of Asda are struggling to see where future growth is coming from. They have massive customer base, they know they need to diversify and the parent Walmart already sells this type of stuff in the states.

Salty.

[tim 3] 28/7/2017 09:11

Hi Saltaire

Not sure about the supermarket potential takeover although its always possible..

Sainsburys takeover of Argos was a masterstroke by Coupe imo because it allowed massive potential cost savings by moving Argos into the Sainsburys stores helping with the overcapacity issues and bringing more customers into Sainsburys at the same time.

Of course AO is online only so there is no potential for cost saving by closing stores and there is the small issue of it consistently not making a profit.

There may be a potential for a takeover with somebody like Dixons though as their product lines are similar and it would increase there online presence and save money by merging operations as well as improving buying power with manufactures.

IMO

[my retirement fund] 28/7/2017 06:28

Hows their banking facilities going?Are they bust yet?

[saltaire111] 27/7/2017 22:11

I'm sort of interested in buying some of these. My reasoning is that the major supermarkets are moving into new areas - Sainsbury bought Argos, Tesco buying Booker. Why not Morrisons or ASDA buying AO?

Stranger things have happened.

Why would they? Digital commerce footprint beyond the traditional boundaries of their existing business, international expansion, new revenue stream, diversification benefits. Might make sense?

Salty.

[greatwhitefunkmaster] 29/6/2017 15:11

On the slide!

[tim 3] 13/6/2017 08:28

Well so far support behaving as it should be technically could be a nice bounce here provided wider tech market does not crash imo.

[tim 3] 12/6/2017 12:10

And there we have it 120 big support here but with tech sell of could go,very little fundamentals to support it.

[tim 3] 07/6/2017 18:42

120 calling!

[papillon] 07/6/2017 17:26

larva 10 May '17 - 17:55 - 484 of 490 0 0
biggish gap to 300p

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

LOL. The "gap" has got a lot bigger since your post, larva!! LOL.

[septimus quaid] 07/6/2017 09:41

What were the terms of his £1 bet, did the company have to remain solvent for a given period of time?

A bigger example of stockmarket IPO hubris you would struggle to find (well maybe not as there are plenty to choose from).

To be fair though, I found their actual delivery service to be first class

[tim 3] 06/6/2017 19:31

Am certainly not a fan either.

If they were a traditional retailer making a loss year after year rather than an internet one what would their share value be?

One thing for sure if the market gets ugly and starts looking at fundamentals again then these could fall a very long way.

I guess there is always the possibility of a takeover.

Closed below support, next (major) support 120.

[phowdo] 06/6/2017 10:35

Cant see the attraction myself.
Anyone can increase market share by shifting boxes at a loss.

[tim 3] 06/6/2017 10:35

Chartwise there is good support here however the rapid fall looks worrying and could see support broken.

On fundamentals it just seems to be one reason after another for not being profitable.I also don't remember Dixons being so negative about the UK outlook when they updated a short time ago.On a positive side the increase in profitability in the Uk is encouraging but will it continue.