UK's AO World raises profit outlook for the fourth time on better margins

(Reuters) -AO World Plc on Friday raised its full-year profit forecast for the fourth time since July as cost-cutting measures at the British online electricals retailer pushed up its margins, sending shares up about 11% in early trade.

The Bolton, northwest England-based company expects adjusted core profit for the full year ended March 31 to be at the upper end of its forecast range of 37.5 million pounds to 45 million pounds ($47.02 million to $56.43 million).

UK retailers are facing a challenging environment, with customers limiting their spending on discretionary items amid a cost of living crisis, but measures taken to cut costs have helped to improve margins.

AO said in November last year that it had reduced its spending on advertising and marketing, and cut down on overhead costs, without giving details.

"We anticipate that our progress in improving both operational cost efficiencies and margin in full-year 2023 will continue through the next 12 months and beyond," CEO John Roberts said in Friday's statement.

The retailer, which sells televisions, laptops, refrigerators, washing machines and microwaves, said that the continuing macroeconomic uncertainty and tough consumer environment did not adversely impact its trading in the last month of its fiscal year. Shares of the company were up about 10.8% to 75 pence at 0745 GMT.

The retailer has turned around its fortunes since closing its struggling German operations in the summer of 2022.

AO's revolving credit facility of 80 million pounds has been renewed with its lenders and has been extended to 2026, the company added.

($1 = 0.7975 pounds)

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Rashmi Aich and Sharon Singleton)