AO World: Record, customer-led results driving cash returns

AO has delivered record FY26 results with 11.4% revenue growth and 16.1% growth in Adj. PBT to £50.5m, slightly ahead of estimates. Moreover, in a global first, AO’s customer-led strategy has driven over 1m Trustpilot reviews with a 4.9/5 rating. Free cashflow was an impressive £66.4m, driving over £200m liquidity, and with the business on track for consensus expectations in FY27E, AO has announced a further £20m return to shareholders. Despite the uncertain macro-economic backdrop, the group’s operational strengths give management confidence in delivering FY27E consensus Adj. PBT expectations (£54.6m). AO’s PER rating remains highly attractive at under 13x Cal 2027 EPS and its stock price is significantly below our 170p Fair Value per share (equivalent to a 5.5% Cal 2027 FCF yield).