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May 2019 ertonline.co.uk


Profits are up but AO spends out preparing for Brexit


AO.com’s profits were up in 2018, according to its latest announcement, but the retailer made further investments in order to prepare for Brexit. However, full year performance for


AO’s financial year, the 12 months to 31 March 2019, is expected to fall within the range of current market forecasts and Group Adjusted EBITDA (excluding exceptional costs) is expected to be at the lower end of market expectations. In addition, the company reported


that Group revenue is expected to be around £900m, an increase of around 13 per cent year on year (up around nine per cent, excluding Mobile Phones Direct Limited). UK revenue for is expected to


be up by 5.4 per cent year on year (excluding Mobile Phones Direct


Limited), at around £748m. The retailer reported that as part of


its Brexit contingency planning, during the last quarter of its financial year it increased its usual core fast moving inventory levels by approximately £15m, with a corresponding impact on its cash position. “This will help ensure we can continue to deliver our market-leading proposition to our customers,” it said. Following the re-appointment of


John Roberts as CEO in January, AO has restructured its management team and, as a result of this together with charges for a loss making contract, which we are unable to terminate in Germany, the retailer is incurring exceptional costs in the region of £2.5m. John Roberts, Founder and CEO of AO.com, commented: “Over the


“Brexit continues to feed uncertainty” as March sales were down


In March, UK retail sales decreased by 1.1 per cent on a like-for-like basis from March 2018, and on a total basis, sales decreased by 0.5 per cent last month, against an increase of 2.3 per cent in March last year. These are the latest figures from


the BRC, covering the four weeks 24 February to 30 March 2019. The organisation added that last month’s figures are negatively distorted by the timing of the run-up to Easter, which is in April this year compared to March in the previous year. One way of correcting for this distortion is to look at the two-year average, since the Easter effect was reversed last year, boosting the sales growth in March 2018. Over the three months to March


this year, in-store sales of Non-Food items declined 1.5 per cent on a total basis and 1.7 per cent on a Like-for-like basis. This is above the 12-month total average decline.


Online, the three-month and 12-month average growths were 4.5 and 6.4 per cent respectively. Helen Dickinson OBE, Chief Executive of the British Retail Consortium, commented: “Brexit continues to feed the uncertainty among consumers. MPs must rally behind a plan of action that avoids no deal – and quickly – or it will be ordinary families who suffer as a result of higher prices and less choice on the shelves.” Sue Richardson, Retail Director UK at


KPMG, added: “March marked a truly disappointing end to the first quarter of 2019 for retailers. Not only did total sales fall 0.5 per cent compared to the same month last year, but no further clarity around Brexit came to light, and shoppers continue to waiver. “Retailers will be hoping for an end to


this sustained uncertainty – it’s clearly not good for business – but times have already changed, and agility remains the best form of defence.”


last eight weeks we have created a mindset shift from the numbers delivered in FY19; we are setting about realising our opportunities with pace and energy. “I am delighted by the reaction


of AO’ers and their passion for our future. We have already announced that we are testing a genuinely disruptive rental proposition. We have also expanded categories further into garden and DIY ready for the season


and we are accelerating AO Mobile to launch later this year in readiness for peak trading. “I am delighted to once again have


the privilege to lead the business and excited by the scale of value creation that lies ahead of us for the benefit of all stakeholders. I look forward to updating more fully in early June on how we are accelerating our plans to grow while leveraging the infrastructure we have invested in.”


“I am delighted by the reaction of AO’ers and their passion for our future. We have already announced that we are testing a genuinely disruptive rental proposition.”


John Roberts, Founder and CEO of AO.com


LIGHTWAVE ANNOUNCES EXPANSION INTO EUROPE


Lightwave, the UK smart home automation company, is launching a range of lighting and power solutions throughout Europe, including all major countries throughout the Spring season. The smart home brand offers fully integrated home automation to monitor and manage lighting, heating and power, and is compatible with Apple HomeKit, Amazon Alexa, Google Home and IFTTT. The Lightwave products can be controlled manually, via the Lightwave app or by voice with use of a smart speaker. Lightwave’s dimmer switches


and power sockets enable intelligent control, energy monitoring and two-way communication. They use the home’s existing wiring, keeping costs and time to install to a minimum. As of April 2019, its fully integrated smart sockets and light switches will be shipped across 19 European countries, and will be available via Apple’s online store, Lightwave directly


and distribution via other retailers. CEO of Lightwave, Jason Elliott, commented: “We are incredibly excited to be expanding into Europe. With more than 10 years of growth under our belts in the UK, we’re confident we are bringing the smartest socket available in Europe.” The Lightwave sales team, headed up


by CRO Adam Williams, has expanded in both the UK and Europe. Chris Jupp (previously Honeywell) will lead retail sales development in EMEA and Laura Davenhall (previously Roberts Radio) will manage the online retail channel. Lightwave devices offer an add-on


sales opportunity for customers investing in home entertainment and/or domestic appliances. There is a unique opportunity for electrical retailers who are also able to offer installation services and due to the modular nature of the Lightwave system, there is an ongoing revenue opportunity with switch and socket sales for each new room added.


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