AO World, an electronics retailer, has raised its expectations for profit after showing "clear progress" over the past year.
Shares in the London-listed company rose by more than a tenth on Thursday. It's the latest upgrade after improving its profit outlook in November last year as its cost-cutting actions continue to bear fruit.
The retailer, which counts Mike Ashley's Frasers Group as a major shareholder, has cut jobs and closed its German business as part of its turnaround plan. On Thursday, AO told shareholders it expects adjusted pre-tax profits "at least" at the top of its previous guidance, of between £28million and £33million for the year to March 31.
It added that it expects to report revenues of around £1.04billion for the year, after its core business returned to growth in the final quarter. Nevertheless, the company will still have seen revenues decline by around 8% for the year.
John Roberts, chief executive officer and founder of AO, said: "I'm pleased with the clear progress that we're making after pivoting our focus to profit and cash generation during the 2023 financial year. As we expected at our half-year results, we returned to revenue growth in our core business during the fourth quarter and, as a result,
He added: "we're entering the new financial year with good momentum. With net funds on our balance sheet and a clear plan, we remain confident in our ability to deliver on our ambition for 10-20% revenue growth in the year ahead and medium-term profit guidance of 5% adjusted pre-tax profit margin."
Jefferies analyst Andrew Wade said the update showed an "impressive turnaround" at the company. Shares rose by 12.4% to 101p on Thursday morning.