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Shares in electronics retailer AO World fell more than 20 percent on Friday after the company revealed that driver shortages and chain disruption were holding back the business.
The UK group for online devices was an early pandemic winner, thanks to strong digital sales. However, the group said revenue for the half-year that ended Thursday increased by only 5 percent compared to the same period at the start of the Covid-19 restrictions.
Revenue from the United Kingdom rose by 6%, while that in Germany rose by 3% in local currency, well below analysts’ expectations. Fierce competition from major online retailers such as Amazon and the UK’s shortage of trucks are cited as reasons for the poor performance.
“The challenging market dynamics in both the UK and Germany led to lower-than-expected volumes, affecting the operating tax, especially in the second quarter,” the company said.
Its shares fell 22% in the early afternoon in London at 168.88p.
Tony Shiret, analyst at Panmure Gordon, said the company’s progress in Germany was a source of concern “that it is a more immature company there and that it should be able to grow regardless of market conditions”.
The overall growth in the second half of the year is expected to be similar to the first, with adjusted earnings before interest, tax, depreciation and amortization for the full year, which is expected to fall in the range of £ 35m to £ 50m – about 20 percent below consensus expectations. The company noted that profits in the second half of the year would be heavier than usual weight.
The Bolton Group specializes in the sale of household appliances such as washing machines and refrigerators. It benefited greatly from the trend toward home improvements early in the pandemic, when millions of people worldwide ended up in closures, raising the share price by 387 percent in 2020. It has since fallen by 60% in 2021.
Businesses in the UK have been struggling to maintain their stock following an exodus of truck drivers in the EU since the UK’s decision to leave the bloc in January. Gasoline deliveries were disrupted, causing panicked consumers to walk to gas stations over the past week. Products are also missing from supermarket shelves and retailers have warned of a shortage in the run-up to Christmas.
A survey by the Road Haulage Association estimates that the UK has a shortage of around 100,000 qualified transport drivers. The government has plans to issue 5,000 temporary visas for foreign truck drivers to come to the UK in the months leading up to Christmas.
However, business and industry leaders said the scheme is does not go far enough, and fails to address the main concerns of employees about immigration status and working conditions in the UK.