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Online retail march to the fore with results due from AO World and Quiz

Last updated: 01:00 05 Jun 2018 EDT, First published: 08:37 04 Jun 2018 EDT

AO warehouse

Online retail will be to the fore in a mixed bag of corporate results on Tuesday, although the news might not be good for all.

Full-year results from online electricals store AO World PLC (LON:AO.) comes with the company having announced in an April updated that its European business is reaching an inflection point.

The FTSE SmallCap firm said then that its full-year group revenues are expected to be around.£796mln, with an adjusted underlying loss (EBITDA) of £6mln.

In a preview note on AO, analysts at Morgan Stanley said, by division, they expect UK Revenue to have grown by 8% to £680mln with an adjusted EBITDA of £22mln.

They expect revenue from Europe of £116mln, 63% reported growth, but with an EBITDA from the region of -£27mln reflecting hefty investment.

The Morgan Stanley analysts pointed out that the main focus will be on AO’s current year outlook, particularly after Dixons Carphone Plc (LON:DC.) - the largest electrical retailer in the UK – issued a profit warning recently, partially due to a shrinking market for electrical goods.

Repeating an ‘underweight’ stance on AO World, they concluded: “While growth in Europe has exceeded expectations, the UK business still faces competitive and macro headwinds.

“Given the UK is the only part of the business close to profitability, any significant slowdown could affect AO's ability to invest in Europe.”

Quiz to provide online answers

Staying with retail, Quiz Plc (LON:QUIZ), the omni-channel fast fashion womenswear brand, will also report final results on Tuesday.

In a trading update in April, the group – which floated on AIM at the end of July 2017 – said its revenues rose by 30% in the year ended March 31, with its online business driving the clothing group.

Quiz said its online revenue grew by 158%, making it the group’s second-largest operation with sales of £30.6mln, though it is still less than half the size of its UK stores and concessions business which turned over £64.6mln.

The group, which was founded in Glasgow in 1993, was valued at £200mln when it floated last year having raising around £100mln in the process, mainly for the company’s founding investors.

At your Service

On the economics front the release of the final UK PMI report for May.

The Service sector PMI is forecast at 52.8, higher than the previous month’s reading but still the second-lowest reading since September 2016.

A reading above 50 is generally indicative of growth in the industry, and economists will be looking for the UK’s dominant sector to justify the view that the UK economy’s feeble 0.1% first-quarter growth rate was as much the result of snow and bad weather as it was underlying weakness.

Significant events expected on Tuesday June 5:

Finals: AO World PLC (LON:AO.), Quiz Plc (LON:QUIZ), Altitude Group PLC (LON:ALT), Carclo PLC (LON:CAR), DiscoverIE Group PLC (LON:DSCV), Fulcrum Utility Services PLC (LON:FCRM), GB Group PLC (LON:GBG), KCOM Group PLC (LON:KCOM), Vianet Group PLC (VNET), VP (LON:VP), WYG PLC (LON:WYG

Interims: Driver Group PLC (LON:DRV), Gooch & Housego PLC (LON:GHH), Summitt Therapeutics PLC (Q1) (LON:SUMM)

Economic data: UK PMI services index; US ISM non-manufacturing index; US PMI services index; US JOLTS

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