AO World PLC Annual Report and Accounts 2025
AO World PLC
Annual Report and
Accounts 2025
The UK’s Most Trusted
Electrical Retailer
Contents
Overview
Chair’s statement 01
Highlights of the year 02
Strategic Report
Our business model and strategy 04
Our ecosystem of expertise
and service 06
Our markets 08
Our brand 10
Chief Executive Officer’s
strategic review 12
Financial & Operational Review 14
Our risks 22
Section 172 Statement 28
Sustainability 31
1 Sustainable living 32
Task force on climate-related
financial disclosures (“TCFD”) 36
Climate-related Risks and
Opportunities 39
2 Fair, equal and responsible 42
3 Fit for the future 47
Our Governance
Governance at a glance 50
AO’s compliance with the 2018
Corporate Governance Code
(the “Code”) 51
Board of Directors 52
Corporate Governance Report 54
Nomination Committee Report 62
Audit Committee Report 65
Directors’ Remuneration Report 71
Directors’ Report 96
Statement of Directors’
responsibilities in respect
of the Annual Report and
the financial statements 101
Our Financials
Independent Auditor’s Report 103
Consolidated income statement 114
Consolidated statement of
financial position 115
Consolidated statement
of changes in equity 116
Consolidated statement of
cash flows 117
Notes to the consolidated
financial statements 118
Company statement of
financial position 150
Company statement of
changes in equity 151
Notes to the Company
financial statements 152
Important information 158
Glossary 159
The UK's most trusted
electrical retailer
25 years ago, AO was founded on a £1 bet.
Today, we’re the most trusted major electrical
retailer globally on Trustpilot with around
750,000 reviews and an average rating of 4.9/5.
We sell over 9,000 different electrical products on ao.com, from major
domestic appliances, small domestic appliances, audio visual equipment,
computing, haircare, mobile, gaming to smart home technology and more.
Millions of happy customers choose AO because we’re able to deliver quickly
with our tried-and-tested logistics network, as well as offering installation,
industry-leading recycling, finance and insurance – all underpinned by our
trusted service that’s magic in the moments that matter.
I am pleased to report on another year of strong
performance by AO.
Revenues in our B2C Retail
1
business have grown
by c.12% YoY, with total Group revenues (on a like
for like basis
2
) increasing by c.7% YoY to £1.1bn. On
a like-for-like basis, we have delivered outstanding
adjusted profit before tax of £45m
2
, with profits
growing faster than sales, at c. 32%. Our balance
sheet is robust and at the period end we had net
funds of around £23m following the acquisition of
musicMagpie and the repayment of its debt and
funding our Employee Benefit Trust to purchase AO
shares in the market to satisfy employee awards
in the period. The Group extended its revolving
credit facility in the period from £80m to £120m
to October 2028 on more favourable terms, and it
remains undrawn.
This strong performance was delivered despite
continuing challenges in our mobile business, which
is operating in a declining market and continues
to see significant competition. These challenges
have led to an impairment in the goodwill and
intangibles associated with it of c.£20m at year end.
Nonetheless, mobile, as a category, is strategically
important to the Group through both a consumer
and a supplier lens.
During the year, we acquired musicMagpie, one of
the UK’s leading mobile recommerce operators.
With highly complementary business models,
this acquisition will enable AO to enhance its
consumer mobile and tech proposition, offering
a differentiated service to our customers, and
unlock value through our reverse supply chain
whilst simultaneously advancing our sustainability
objectives.
Critically, over the year, we have continued to
perform well for customers. Our trust pilot score
Chair’s statement
has increased to 4.9 and we now have over 750,000
reviews, cementing our position as the most trusted
electrical retailer. Our AO Five Star membership
continues to grow strongly and we are increasing
our frequency and share of wallet with customers,
having re-engineered our model for cost effective
warehousing and distribution of smaller items and
newer categories.
Our culture and people are fundamental to
the success of the Group and it’s pleasing to
see another year of high engagement with an
average Employee Index Score for the year of 81.
Our people are happy, committed, have a sense
of belonging and are operating with a growth
mindset; we are working together cohesively and
collaborating brilliantly across the Group to drive
stakeholder value.
Through our evaluation of the Board and its
committees, I am confident that our ways of
working are very effective and there is appropriate
expertise around the table to effectively support
and challenge our leadership team. However, we
have embarked on a search for two new NEDs to join
the Board; the first to have experience of the plc
landscape and a financial background, as part of
our succession planning, and the second to have a
marketing and brand background to enhance our
existing skill set. With both appointments, we have
highlighted to our search partner the strong desire
to enhance Board diversity.
Towards the period end, we appointed Mark Higgins
to Chief Operating Officer (in addition to his existing
role of Chief Financial Officer). This appointment
reflects the way Mark and John have been running
the business together for some time, with Mark
taking additional responsibility for driving some
critical development activities. The Board has
been pleased with the progress Mark has made in
developing his skills and delighted with the impact
he has made on a number of key commercial topics.
I would like to give thanks to the Board, our
Executives and all our people for their hard work and
dedication throughout the year. As we look to FY26
we have a number of initiatives in the pipeline which
we expect to give customers more opportunities to
buy from us and more reasons to keep coming back.
Despite the wider macroeconomic challenges,
particularly employment cost increases, our
objectives remain unchanged and we are confident
in our ability to continue to grow revenue, alongside
Group adjusted PBT.
Geoff Cooper
Chair
1 B2C (business-to-consumer) Retail revenue relates to products and services purchased by B2C customers through the retail websites
(including membership fees and revenue attributable to protection plans sold with the products).
2 Like-for-like basis relates to the continuing operations of the Group, excluding the post acquisition revenue and PBT of musicMagpie.
Adjusted profit before tax is defined as statutory profit before tax adjusted for the fees relating to the musicMagpie acquisition and the
impairment charge relating to the Mobile cash generating Unit.
Overview Strategic Report Our Governance Our Financials Shareholder Information
AO Word PLC Annua Report and Accounts 2025 01
Highlights of the year
Our obsession with
amazing first-time
customer service and
creating magic in the
moments that matter is a
true brand differentiator
and a significant moat
around the business.”
John Roberts
Chief Executive Officer
We are focusing on driving
revenue growth and
profitability in product
categories in which we
can leverage our whole
ecosystem and deliver
the right return.”
Mark Higgins
Group Chief Financial
Officer and Chief
Operating Officer
Financial Alternative Performance Measures
LFL Revenue
1
£1,108m
(2024: £1,039m)
B2C Rev
2
Growth
12%
LFL adjusted PBT
1
£45.2m
(2024: £34.3m)
Financial
Revenue
£1,138m
(2024: £1,039m)
PBT
£20.6m
(2024: £34.3m)
Net Funds
3
£23.4m
(2024: £34.4m)
Product Range
Major domestic
appliances (MDA)
4,150
(2024: 3,883)
Small domestic
appliances (SDA)
1,848
(2024: 1,326)
Other
categories
3,137
(2024: 2,428)
People
Employee
index score
81
(2024: 81)
Labour
stability
65%
(2024: 48%)
Top 200
UK Best
Employer
Sustainability
MDA
recycled
1.2m units
(2024: 1.0m units)
Consumer
Tech recycled
4
191k units
(2024: 180k units)
Plastics
processed
9.3k tonnes
(2024: 11k tonnes)
1
LFL is Like-for-Like basis and relates to the
continuing operations of the Group, excluding
the post acquisition revenue and PBT of
musicMagpie. LFL revenue excludes the post
acquisition revenue of musicMagpie) of £29.7m. Adjusted PBT
excludes the fees related to the musicMagpie (mM) acquisition and
the impairment charge relating to the Mobile cash generating unit.
See page 18.
2
B2C (Business-To-Consumer) revenue relates to products
and services purchased by B2C customers through the retail
websites (including membership fees and revenue attributable to
protection plans sold with the products).
3
Net Funds is defined as cash less borrowings less owned asset
leased liabilities, but excluding right of use asset leased liabilities.
4
Figures given are for musicMagpie for the 12 months to
31 March 2025 versus the 12 months to 30 November 2024.
The AO family
AO World PLC Annual Report and Accounts 202502
Who do customers trust?
Trustpilot ratings
1
Excellent
Rating 4.9/5
747,674 Reviews
FY24: 532,308
4 & 5-Stars
94%
1, 2 & 3-Stars
6%
Great choice, easy to use online search engine,
fast delivery with very friendly staff. We have
also signed up as members as this offered
extra discounted prices, free delivery and
free old appliance removal for recycling. A
fabulous service – very happy.”
AO Customer review
Excellent all round. Ordered Wednesday,
delivered Friday. Guys arrived within
designated time slot. Lots of updates
beforehand and a call to confirm exact time.
Quick and efficient removal of old washing
machine then installation of new. Polite,
courteous, helpful, thorough. Really cannot
fault anything about the whole process from
start to finish and will definitely use AO again.”
AO Customer review
Our customer focus - ao.com
2
The AO smile is more than a logo, it’s how we make
customers feel in every interaction with us. That’s why
customers come back again and again.
Our Social Media
With a strong and engaged community of followers
on our AO social channels (including Facebook,
TikTok, Instagram and Pinterest), every day we tell
the story to ...
Over
2 million
followers
New customers vs repeat customers
New customers (670k)
Repeat customers (1,106k)
Cumulative customers %
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
FY22 FY23 FY24 FY25
1
Trustpilot scores sourced from their website, FY25: April 2025 and FY24: April 2024.
2
A customer is defined as an individual customer who has purchased through us via ao.com.
AO World PLC Annual Report and Accounts 2025 03
Overview Strategic Report Our Governance Our Financials Shareholder Information
Our business
model and
strategy
AO World PLC Annual Report and Accounts 202504
Brand trust
1
Customers are at the heart of our strategy, so we obsess
about providing the best possible proposition and
service experience.
Our people are core to delivering this by living and breathing
our values, treating customers like our grans and making
decisions our mums would be proud of, within a high-
performance culture in which they can grow and flourish.
Quite simply, the best service should always be no service.
We need to build everything to eliminate friction and waste
and work perfectly every time.
What we do, and how we do it, is not easily replicated.
Vertical integration and structural economic advantage
takes time – and sometimes blind faith. It is difficult to build
scale in low-frequency categories.
Consequently, AO has a strong, trusted brand identity,
underpinned by a globally leading 4.9 out of 5 from three
quarters of a million Trustpilot reviews.
Deepening customer relationships
2
We want to deepen our relationship with customers beyond
brilliant retail basics. In membership, not only have we
created a shared economics model that customers can
understand and invest in with us. It also drives frequency of
transactions, familiarity and loyalty.
Vertical integration enables us to control both costs and
value capture, driving efficiency throughout the group,
driving profit through the membership model.
As we capture more of our customers’ share of wallet, we can
leverage our structural advantage and drive profitability
further. This, in turn, enables our investment in shared
economics with members via exclusive extra discounts,
motivating them to further invest their share of wallet.
This model encourages customers to use their membership
more and, therefore, motivate renewal because they get
more value across more products.
Transactions on AO.com are even quicker and simpler with
a finance account so we encourage members to sign up,
which further drives repeat purchases.
This also enables us to offer promotional finance to spread
the cost, including exclusive member deals. We will further
drive share of wallet through the expansion of our non-MDA
product range and our mobile proposition.
Membership provides predictability and visibility of future
sales and spend, enabling further service enhancements
such as choice, pricing and services, as well as profits to
reinvest accordingly.
Brilliant retail basics - what sets us apart
3
These are the fundamental hygiene factors that determine
why a customer should choose to shop with AO.
We have a market-leading share in MDA and an expanding
non-MDA product range, meaning we serve the widest-
possible customer base, offering great prices whilst
maintaining appropriate levels of margin to meet our
financial targets.
Delivering a seamless shopping experience with trusted
customer service requires a slick, intuitive and engaging
website including inspiring product information with easy-to-
add supporting services and ancillary products.
Customers have a choice of payment options, including
finance and credit in partnership with NewDay. Plus, we
make things right if things go wrong.
Vertical integration, including in-house logistics and
recycling capabilities, enable us to offer a complete delivery
and services proposition.
This is supported by enhanced customer lifecycle services,
including the promotion of product protection plans, acting
as an agent for Domestic & General.
Over 25 years, we’ve built trusted partnerships with global
suppliers; we have a deep and broad understanding of their
strategic and operational context, leading to high-quality
SLAs, which meet both our expectations and those of
our customers.
AO World PLC Annual Report and Accounts 2025 05
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Our ecosystem of expertise and service
Our eco-system is a range of our expertise and services – from across retail
and logistics through to financial services, our very own recycling plant and
our newly acquired recommerce business.
Our customers are at the heart of everything we do and that’s why we are constantly evolving our eco-system to meet market
demand and ensure we achieve our mission. It’s not about what we do though – it’s about how we do it.
Product – From fridges and freezers, laundry
products and dishwashers, to smart tech,
computing and TV and entertainment. We sell
over 9,000 products on our multiple e-commerce
platforms, all at a competitive price.
Content – Our multimedia team produce our
in-house diverse content, which includes imagery,
videos, how-to guides and lifestyle, and energy
efficiency ratings.
Tech – Our bespoke shop functionality and pricing
tools enable us to sweep the market several times
a day to keep our prices competitive. Our My
Account functionality enables customers to order,
review and make changes to their orders up to the
day of delivery.
Our Webshop is supported by our contact centre.
Warranty and finance – We work with Domestic
& General (the UK’s leading specialist warranty
provider) to offer our customers a product
protection plan to provide them with the peace
of mind that their new product could be repaired
or replaced if required. On behalf of NewDay, we
promote a range of credit products at competitive
rates, but also use 0% interest free offerings and
buy now pay later for promotional purposes; we
ensure adherence to responsible lending practices
and provide simple and clear finance options for
our customers.
Our in-house logistics network – comprises five
distribution centres, with a total of over 1.4m sq ft,
16 delivery depots and around 800 trucks and 300
trailers, we are able to offer nationwide delivery
seven days a week with dynamic timeslots and
next day options.
Customer’s house – our services include the
basics of unpacking and inspecting customers’
products, to complex gas cooking and integrated
installations – we go the extra mile.
Recycling – Our purpose-built, state-of-the-art
WEEE (Waste Electrical and Electronic Equipment)
and plastics recycling facilities in Telford. Our
vertically integrated WEEE recycling facility
recycles well over one million large domestic
appliances annually, with over 40% of these being
recycled by Bertha (our fridge shredding machine).
Plastics from Bertha are refined using our AO
designed plastics recycling plant (with an annual
capacity of 25,000 tonnes), creating high-quality
consistent plastics for reuse in new products and
appliances.
Reuse of plastics back into products
Recycling
Warranty and
finance
Logistics
Webshop
Product +
content
+ tech
Customer’s
House
Waste
Re-commerce
Re-commerce – through our reverse supply
chain platform, musicMagpie, we offer customers
options to trade in old tech, whilst also giving
customers the option to buy second life products.
Where it’s possible to do so, we will look to resell any
products scrapped by our customers via our own
third-party outlets, such as elekDirect.
AO World PLC Annual Report and Accounts 202506
Key
Offices
Warehouses
Outbases
Recycling Plants
Locations
AO World PLC Annual Report and Accounts 2025 07
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Our markets
1
bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
2
ons.gov.uk/economy/inflationandpriceindices
3
obr.uk/efo/economic-and-fiscal-outlook-march-2025/
4
ons.gov.uk/employmentandlabourmarket/
peopleinwork/employmentandemployeetypes/bulletins/
averageweeklyearningsingreatbritain/latest
5
gov.uk/national-minimum-wage-rates
Inflation, interest rates
and consumer confidence
Technology and the
customer journey
Environment/Net zero
Impact
Consumers’ spending power is impacted by several macro-economic
factors.
The Bank of England base rate was reduced during FY25 from its
long-term high of 5.25%
1
in April 2024 down to 4.5% (as at March 2025).
Higher rates act to suppress the housing market as well as impacting
customers’ disposal income.
Despite reduced interest rates, inflation rose from the Bank of
England’s target level of 2% (during summer 2024) to its current 2.6%
(as at March 2025)
2
. Inflationary pressures from an increase in the
Ofgem price cap, higher food prices and an increase in regulated
water bills are expected to push inflation to a peak of 3.8% in mid 2025
before falling back to the 2.0% target from 2026 onwards
3
.
Wage inflation – annual growth in regular earnings – was 5.9%
4
for the
period December to February 2025. It is expected that this elevated
wage inflation will be supported by the National Minimum Wage
increase from April 2025
5
; however, uncertainty in the global economy
could lead to increased unemployment levels.
Financial pressures on consumers have given rise to an increase in the
demand for “Buy Now Pay Later” options when making major purchases.
Our response
Despite current uncertainty, further reductions in interest rates are
expected
1
, and should see the cost of borrowing and, specifically,
mortgage rates fall, giving rise to buoyancy in the housing market.
GFK’s Consumer Confidence Index
6
continues to marginally increase,
with current levels at -19 (March 2025), a two-point improvement
from this time last year. Our range of over 9,000 products give our
customers choice, so they can get the product they want at the price
point that suits them.
The majority of MDA sales are driven by distressed
7
purchases thus
providing AO with some resilience to macro-economic factors. Given
expected decrease in interest rates, the medium-term stabilisation
of inflation levels and consumer confidence we would expect to see
discretionary consumer spending supported as a result.
With our own in-house two-person delivery fleet, fuel is a key
component of our gross margin. As such, we have fixed most of our
fuel usage to an agreed fixed price for the financial year, providing AO
with some short-term stability.
We have offices, warehouses and outbases, which all consume energy.
Fixed-price agreements are in place for 90% of usage until October
2026, giving some longer-term stability to operational costs.
We recognise our employees are the ones who deliver our best-in-
class service and, as such, all eligible AOers received a minimum 2%
increase in basic pay in April 2025’s pay review.
AO offers customers access to a range of finance options to help
fund their purchases, whether it be revolving credit or promotional
instalment plans. The revolving credit adjusts rate and credit line
to the individual customer’s profile, ensuring responsible lending
and facilitating those needy purchases in a challenging economic
landscape. AO acts as Introducer in the distribution of AO Finance
through NewDay, the product being regulated by the Financial
Conduct Authority (“FCA”).
Impact
Reliance on technology for purchasing is increasing, and with over
59%
11
of the electricals market now transacted online and expected
to keep growing, retailers must adapt to market demand. Customers
want a low-touch purchasing journey via apps and mobile browsers.
Customers want to be able to compare products and brands as
well as being able to choose services and delivery slots that meet
their demands.
Customers entrust their personal data, including payment details
with retailers. Increased cybercrime has seen customers demand a
higher level of cybersecurity when transacting online.
There is rising demand for personalised experience and products.
Customers are moving to subscriptions, membership and
personalisation.
Our response
Our website and app are designed to be simple, easy and
empowering to use, ensuring that customers can shop in the way
that best suits them. We understand that today’s customers not only
want a hassle-free experience, but also seek to make informed and
personalised choices.
We simplify the process of finding the right product through intuitive
filters and popular search terms, as well as providing detailed
information on energy ratings and sustainable products, enabling
our customers to make responsible decisions.
Our “My Account” feature offers a personalised experience, allowing
customers to manage their orders effortlessly as well as track
orders,providing peace of mind from purchase to delivery.
With over 9,000 electrical products available on our website, we give
the customer a wide range of choice, by category and brand. Our
in-house two-person delivery service enables customers to deal with
us directly regarding time slots and services they require to make the
delivery and installation of their goods hassle free.
AO continually invests in the online proposition through improved
product visualisation and interactive product information, which
enables a better digital journey for our customers. AO’s operational
gearing gives the business the ability to move with consumer
demand with limited investment required.
AO has invested and continues to invest in leading customer identity
and access management technology to maintain the trust of
our customers.
Impact
There is an increased requirement for mandatory climate-related
disclosures as recommended by the Task Force on Climate-related
Financial Disclosures (“TCFD”). The implementation of IFRS S1 and
S2, as set out by the International Sustainability Standards Board
(“ISSB”) are all clear indications that corporate responsibility for
the environment continues to be a clear directive.
Consumers are becoming increasingly aware of energy costs and
as a result are demanding more energy-efficient products. Almost
half of consumers
9
consider energy efficiency an important
criterion when purchasing a MDA product.
Consumers are increasingly environmentally aware. 1 in 4
10
consumers are prepared to pay more to protect biodiversity or for
sustainable products and packaging.
Our response
We understand the importance of aligning our purpose, values
and strategy with the needs of our stakeholders to build long-term
value in a sustainable way. We see sustainability as an investment
to stay relevant for customers, suppliers and our people, while
driving down costs and realising efficiencies in our operations.
AO is dedicated to responsible recycling and reuse. Since the
inception of our in-house recycling plant we have recycled or
reused over 8m products. We continue to invest in our recycling
facility, with the addition of an extruder made in FY25.
With over 800 vehicles on the road 364 days of the year we are
continuously looking at ways to reduce our carbon footprint. In
FY25, we invested in technology to make our routing more efficient,
both reducing our environmental impact and the cost of delivery.
Along with our fleet partner, we have launched our new semi-
trailers, which give a 10% increase in capacity per vehicle and will
enable us to use compressed natural gas (“CNG”) across the vast
majority of the trunking fleet by 2030. CNG will become c.50% of
our core operation fuel usage from October this year. For trailers,
we have 50 x Longer-Semi Trailers entering the fleet this summer.
This effectively grows our capacity per trailer by around 5%,
thereby improving our efficiency.
AO’s acquisition of musicMagpie during FY25 allows it to
position itself to tap into the burgeoning market for refurbished
electronics, which has gained traction as consumers become
more environmentally conscious and budget-savvy. The rise of
the circular economy emphasises sustainability, and AO’s move to
integrate musicMagpie aligns with this trend, potentially appealing
to a demographic that values eco-friendly practices.
Our website, with its detailed listing of product details, empowers
the customer to understand the environmental rating of the
product they buy.
AO World PLC Annual Report and Accounts 202508
Our market
• AO’s current UK addressable market (which comprises
MDA, SDA, AV, consumer electronics, gaming, mobile
garden and DIY, smart home and personal care) is
£28.2bn
11
.
• AO remains a UK market leader in MDA, with 16.0%
market share.
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
£m
35
30
25
15
10
5
0
FY25
14
2323
24
25
29
28
28 2827
AO addressable market by year
11
Key
MDA
SDA
Personal Care
AV
CE
Mobile
Gaming
Garden & DIY
Smart Home
Lifestyle
Inflation, interest rates
and consumer confidence
Technology and the
customer journey
Environment/Net zero
Impact
Consumers’ spending power is impacted by several macro-economic
factors.
The Bank of England base rate was reduced during FY25 from its
long-term high of 5.25%
1
in April 2024 down to 4.5% (as at March 2025).
Higher rates act to suppress the housing market as well as impacting
customers’ disposal income.
Despite reduced interest rates, inflation rose from the Bank of
England’s target level of 2% (during summer 2024) to its current 2.6%
(as at March 2025)
2
. Inflationary pressures from an increase in the
Ofgem price cap, higher food prices and an increase in regulated
water bills are expected to push inflation to a peak of 3.8% in mid 2025
before falling back to the 2.0% target from 2026 onwards
3
.
Wage inflation – annual growth in regular earnings – was 5.9%
4
for the
period December to February 2025. It is expected that this elevated
wage inflation will be supported by the National Minimum Wage
increase from April 2025
5
; however, uncertainty in the global economy
could lead to increased unemployment levels.
Financial pressures on consumers have given rise to an increase in the
demand for “Buy Now Pay Later” options when making major purchases.
Our response
Despite current uncertainty, further reductions in interest rates are
expected
1
, and should see the cost of borrowing and, specifically,
mortgage rates fall, giving rise to buoyancy in the housing market.
GFK’s Consumer Confidence Index
6
continues to marginally increase,
with current levels at -19 (March 2025), a two-point improvement
from this time last year. Our range of over 9,000 products give our
customers choice, so they can get the product they want at the price
point that suits them.
The majority of MDA sales are driven by distressed
7
purchases thus
providing AO with some resilience to macro-economic factors. Given
expected decrease in interest rates, the medium-term stabilisation
of inflation levels and consumer confidence we would expect to see
discretionary consumer spending supported as a result.
With our own in-house two-person delivery fleet, fuel is a key
component of our gross margin. As such, we have fixed most of our
fuel usage to an agreed fixed price for the financial year, providing AO
with some short-term stability.
We have offices, warehouses and outbases, which all consume energy.
Fixed-price agreements are in place for 90% of usage until October
2026, giving some longer-term stability to operational costs.
We recognise our employees are the ones who deliver our best-in-
class service and, as such, all eligible AOers received a minimum 2%
increase in basic pay in April 2025’s pay review.
AO offers customers access to a range of finance options to help
fund their purchases, whether it be revolving credit or promotional
instalment plans. The revolving credit adjusts rate and credit line
to the individual customer’s profile, ensuring responsible lending
and facilitating those needy purchases in a challenging economic
landscape. AO acts as Introducer in the distribution of AO Finance
through NewDay, the product being regulated by the Financial
Conduct Authority (“FCA”).
Impact
Reliance on technology for purchasing is increasing, and with over
59%
11
of the electricals market now transacted online and expected
to keep growing, retailers must adapt to market demand. Customers
want a low-touch purchasing journey via apps and mobile browsers.
Customers want to be able to compare products and brands as
well as being able to choose services and delivery slots that meet
their demands.
Customers entrust their personal data, including payment details
with retailers. Increased cybercrime has seen customers demand a
higher level of cybersecurity when transacting online.
There is rising demand for personalised experience and products.
Customers are moving to subscriptions, membership and
personalisation.
Our response
Our website and app are designed to be simple, easy and
empowering to use, ensuring that customers can shop in the way
that best suits them. We understand that today’s customers not only
want a hassle-free experience, but also seek to make informed and
personalised choices.
We simplify the process of finding the right product through intuitive
filters and popular search terms, as well as providing detailed
information on energy ratings and sustainable products, enabling
our customers to make responsible decisions.
Our “My Account” feature offers a personalised experience, allowing
customers to manage their orders effortlessly as well as track
orders,providing peace of mind from purchase to delivery.
With over 9,000 electrical products available on our website, we give
the customer a wide range of choice, by category and brand. Our
in-house two-person delivery service enables customers to deal with
us directly regarding time slots and services they require to make the
delivery and installation of their goods hassle free.
AO continually invests in the online proposition through improved
product visualisation and interactive product information, which
enables a better digital journey for our customers. AO’s operational
gearing gives the business the ability to move with consumer
demand with limited investment required.
AO has invested and continues to invest in leading customer identity
and access management technology to maintain the trust of
our customers.
Impact
There is an increased requirement for mandatory climate-related
disclosures as recommended by the Task Force on Climate-related
Financial Disclosures (“TCFD”). The implementation of IFRS S1 and
S2, as set out by the International Sustainability Standards Board
(“ISSB”) are all clear indications that corporate responsibility for
the environment continues to be a clear directive.
Consumers are becoming increasingly aware of energy costs and
as a result are demanding more energy-efficient products. Almost
half of consumers
9
consider energy efficiency an important
criterion when purchasing a MDA product.
Consumers are increasingly environmentally aware. 1 in 4
10
consumers are prepared to pay more to protect biodiversity or for
sustainable products and packaging.
Our response
We understand the importance of aligning our purpose, values
and strategy with the needs of our stakeholders to build long-term
value in a sustainable way. We see sustainability as an investment
to stay relevant for customers, suppliers and our people, while
driving down costs and realising efficiencies in our operations.
AO is dedicated to responsible recycling and reuse. Since the
inception of our in-house recycling plant we have recycled or
reused over 8m products. We continue to invest in our recycling
facility, with the addition of an extruder made in FY25.
With over 800 vehicles on the road 364 days of the year we are
continuously looking at ways to reduce our carbon footprint. In
FY25, we invested in technology to make our routing more efficient,
both reducing our environmental impact and the cost of delivery.
Along with our fleet partner, we have launched our new semi-
trailers, which give a 10% increase in capacity per vehicle and will
enable us to use compressed natural gas (“CNG”) across the vast
majority of the trunking fleet by 2030. CNG will become c.50% of
our core operation fuel usage from October this year. For trailers,
we have 50 x Longer-Semi Trailers entering the fleet this summer.
This effectively grows our capacity per trailer by around 5%,
thereby improving our efficiency.
AO’s acquisition of musicMagpie during FY25 allows it to
position itself to tap into the burgeoning market for refurbished
electronics, which has gained traction as consumers become
more environmentally conscious and budget-savvy. The rise of
the circular economy emphasises sustainability, and AO’s move to
integrate musicMagpie aligns with this trend, potentially appealing
to a demographic that values eco-friendly practices.
Our website, with its detailed listing of product details, empowers
the customer to understand the environmental rating of the
product they buy.
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AO FY25 UK
product sales
£967.5m
6
nielseniq.com/global/en/news-center/2025/uk-consumer-confidence-up-one-
point-in-march/
7
Mintel, Major Domestic Appliances, UK Report 2022 62%
8
Analysis of GFK data for the twelve months to 1 April 2025
9
gfk.com/blog/how-brands-can-hit-the-energy-efficiency-sweet-spot
10
deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer-
what-consumers-care-about.html
11
GFK, gross value, for the twelve months to the 1 April 2025
AO World PLC Annual Report and Accounts 2025 09
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Our Brand
The delivery guys were prompt calling
me with information and delivered the
goods and magazine and teddies wow!
What a great company.”
Jeannie
Trust – Fuelling our brand strategy
We remain committed to reinforcing our position as the
UK’s most trusted electrical retailer. This foundation
drives efficiency, ensures focus and gives consumers
clear reasons to believe in us.
In a world full of uncertainty, trust matters more than
ever. That’s why our brand purpose is built around being
trusted. With a Trustpilot rating of 4.9 from over 700,000
reviews, our customers don’t just have to take our word
for it, they can rely on the voices of countless others
across the UK who already trust AO.
Marketing
Grabbing consumer attention in today’s crowded media
landscape means having a voice that’s bold, consistent
and unmistakably AO. Our creative is built to stand out:
visually distinctive, emotionally engaging and instantly
recognisable across every channel. From TV to social,
digital to print, we ensure AO shows up with clarity,
confidence and character, wherever our customers are.
Our media strategy continues to evolve, guided by data,
insight and a sharp focus on effectiveness. We prioritise
delivering the right message to the right audience
at the right time, allowing us to build meaningful
reach and frequency at scale. By focusing on high-
impression environments and formats that connect
with audiences at key moments, we’re maximising
visibility and strengthening relevance across the entire
customer journey.
We want more customers to choose AO as their first
choice for electricals. To achieve that, we’re building
long-term brand fame whilst giving consumers
compelling reasons to consider us in the moments
that matter. At the same time, we continue to improve
the efficiency of our media buying by selecting the
most effective channels to drive results. Striking the
right balance between brand building and short-term
performance remains central to our approach, ensuring
every campaign not only reaches more people, but also
drives action and long-term loyalty.
Our strategy is designed to attract new customers
while also strengthening loyalty and advocacy from
our existing base. One standout initiative has been the
launch of AO at Home, our printed magazine delivered
to households across the country, which has been
created to tell great stories about our products.
The magazine, long term, has the aim of increasing
category awareness and improving repeat purchases.
AO World PLC Annual Report and Accounts 202510
We have a
growth mindset
Creativit and thinking big
is what we do.
We're a high performing team;
alwas learning and stretching.
We challenge ourselves to seek
better was of doings things.
We see opportunities others don't,
and thinking dierentl strengthens
our future.
We make decisions
that make our
mums proud
We empower our people to make the right
decisions, not necessaril the eas ones.
We inspire each other to be our true selves
and the best that we can be.
We genuinel care, we listen to each other,
and we do everthing we can to make
things better.
Having a positive impact on the world
in which we live is the right thing to do.
Social media
As social platforms continue to evolve, so does our
approach. We remain focused on creating content
that is not only platform specific but also audience
first ensuring every post, video and interaction feels
relevant, engaging and on brand.
Influencer marketing continues to be an integral
part of our strategy, helping us connect with
communities through voices our customers
already know and trust. A stand-out example
this year was our collaboration with TikTok
creator @cleanwithbea, whose content centres
around supporting individuals and families in
need. Together, we launched a joint initiative that
resonated deeply with audiences, generating over
2.1 million views and winning a national award for
Best Collaboration with a Content Creator at the
Global Social Media Awards.
Campaigns like this demonstrate the power of
authentic storytelling around all of our products,
specifically non-MDA as well as meaningful
partnerships, reinforcing our brand values whilst
driving awareness, engagement and impact across
social platforms.
Sponsorship
We’re proud to bring the AO brand to life through
partnerships and programmes that connect us with
people and communities in powerful and tangible
ways. Our continued sponsorship of the AO Arena
in Manchester gives us a prominent presence in
the heart of the city, aligning our name with one
of the UK’s most iconic entertainment venues and
strengthening our brand visibility.
In addition to our partnerships with Manchester
Thunder and Altrincham, we’ve also continued our
support of grassroots initiatives of Jag Tags (through
Jacksonville Jaguars) and our own grassroots
programme, a key part of our commitment to social
impact. These initiatives span a range of grassroots
activities across the UK and aim to create greater
access to opportunities for young people through
sport. Over the next five years, we’re committed
to supporting 500,000 children by providing
opportunities that may prevent participation.
This is about more than brand awareness. It’s about
delivering meaningful change and reflecting the
values that guide our business. As our CEO explains:
“Talent is evenly spread, but opportunity is not.”
We take this responsibility seriously and are proud
to be helping to level the playing field for the next
generation, one community at a time.
Our Values
AO World PLC Annual Report and Accounts 2025 11
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Chief Executive Officer’s strategic review
Another year of strong progress
It’s 25 years since the now
famous £1 bet in a Bolton pub
that brought AO into being.
It’s been a fantastic journey of innovation and
investment, resilience and rejuvenation and sheer
hard work.
Today, we have operations spanning Retail,
Warehousing and Logistics, Recycling, circularity
and Financial Services. We are vertically integrated
to maximise control of the customer journey whilst
simultaneously capturing the maximum amount of
the value we create.
Our Group turnover is over £1.1bn, our like-for-like
(“LFL”) Adjusted PBT is over £45m, and we directly
employ c.3,000 people, engaging many more.
We began this financial year with a commitment
to grow our B2C retail sales by over 10%, so
I’m delighted to report that the AO team
delivered c.12%.
We also guided that said profits would grow faster
than sales as a result of our operational gearing.
LFL adjusted PBT grew c.32% to c. £45m, which is the
clearest possible proof that our model is working.
At the year end, we had cash in the bank of £27m
with an unused RCF of £120m on refreshed and
improved terms dated to 2028. This position
also accounts for c.£35m net cash spent on
the musicMagpie acquisition and the EBT
share purchase.
As ever, these numbers are the output of the
incredible work of all AOers, and their relentless
commitment to delivering brilliantly for our
customers. The performance also wouldn’t have
been possible without the support from our
suppliers who have yet again worked with us to
deliver amazingly for our mutual customers.
Looking forward, we have a number of initiatives in
the pipeline which we expect to give customers more
opportunities to buy from us, and welcome back
customers who have received our excellent service.
Despite the wider macroeconomic challenges,
particularly employment cost increases, our
objectives remain unchanged and we are confident
in our ability to continue to grow revenue, alongside
Group adjusted PBT.
Significant competitive moats
We are now the number one rated company of scale
in the world across all categories on Trustpilot, with
over 750,000 reviews at an average rating of 4.9/5.
This is an incredible achievement and holds a huge
value for the brand and business.
It’s particularly impressive given the nature of
what we do. Our products and services have a
huge impact on people’s lives, and we sell them in
one of the most competitively transparent price
environments. What’s more, we fulfil largely on a
two-man delivery basis that requires us to enter
customers’ homes – rather than simply handing
over a parcel – and complete hugely complex tasks
like product installations, as well as removing items
to be recycled within our operations. There are
an awful lot of moving parts, but the AO machine
is well-oiled and highly efficient, as our customer
ratings demonstrate.
We do all of this in partnership with world-leading
manufacturers and brand owners. We’re fully
integrated into their businesses, both commercially
and through their supply chains, and our status
as the most trusted electrical retailer is critically
important to them.
Our shared obsession with amazing first time
customer service and creating magic in the
moments that matter is a true brand differentiator
and a significant moat around the business.
To do this at scale, and with structurally better unit
economics than our competitors, is extremely hard
to copy.
We’re in a low-frequency category and so building
brand and reputation also takes time and
significant investment. First-time customers cost a
lot more than repeating customers – so when we get
customers to commit to being members, they are
meaningfully more valuable.
And of course, our people are our biggest
differentiator. Whether they support customers
directly or indirectly, or work with our partners,
their passion and dedication is humbling and I’m
incredibly proud of what we’ve all achieved together
this year.
You can’t pay people to care and yet it is that
ingredient that is the magic and core to our culture.
We’ll continue to invest in creating and fostering an
environment for our people to grow into the best
version of themselves.
AO World PLC Annual Report and Accounts 202512
All of these are moats around our business
and building them is hard yet they are assets
that sit on the balance sheet at zero. They also
require significant investment, because the cost
of innovation is front loaded and takes time to
pay back.
Growing loyal customers,
expanding categories
It took us over 10 years to serve the first million
customers and we served about 10m customers in
the following 10 years. In the last five years, we’ve
served 7.5m unique customers – many of them
repeating – and over 5m of them had never shopped
with us before 2021.
Category-wise, in the first five years of offering non-
MDA products, we sold just over 3m units. In the last
five years, we’ve sold nearly 5m units, and many of
those customers originally bought only MDA from
us. We have also fixed the unit economics in the
newer, non-MDA categories whereby virtually all
orders are margin accretive compared to the first
five years when they were margin dilutive as we built
scale, reputation and credibility.
Our gap now is simply one of education and making
customers aware that we sell these new categories
with a better price and proposition than our
competitors. It will take time, but we can do this very
cost effectively, by marketing directly to our own
base – and it is working.
Our finance base continues to grow, as does its
value. We now have over 500,000 finance customers
with just under £1bn of available finance to spend
with us. Over 1m customers see the value of AO Care
Insurance and pay monthly to protect themselves
from the unforeseen cost of product failure.
Our membership programme overarches all of these
customer cohorts. We are pleased with the progress
of membership, where customers pay £39 per year
to benefit from free delivery, free recycling and
exclusive prices. All metrics, including acquisition
and renewal rates as well as the share of wallet that
members reward us with, are on track.
All these cohorts of customers are more valuable
than a standard customer to us, so, as time
progresses, and more customers become members
and more members buy more services from us,
the more we are able to share the economics to
bring them even better value. As well as widening
the moat, this also gives us more predictability
and visibility of future spend and sales to make the
business ever more robust.
Mobile
The most challenged part of the group remains
our mobile division because the market continues
to structurally move away from the phone and
contract bundle market towards SIM only, with
handset renewal cycles slowing again. These
challenges have led to an impairment charge for the
Mobile business. Nonetheless, Mobile as a category
is strategically important to the Group, both
through a consumer and supplier lens. We intend
to offer both a SIM only and credit backed SIM free
products on ao.com in the future. We will review our
post pay connection business as we do not have
appetite for continued losses in this area.
musicMagpie
During the year, I was delighted to welcome the
team from musicMagpie to the AO family. Steve
Oliver founded and built an amazing culture
that dovetails perfectly into our AO world.
The opportunities that exist by plugging their
capabilities into our platform are significant, and will
enable us to share even more value with customers
to make AO even more of a no-brainer choice.
musicMagpie is the world’s biggest seller on both
eBay and Amazon Marketplace and so has a huge
amount of rich data and capability for us to use,
while removing lots of customer acquisition costs
that we can pass back to customers through higher
trade in and residual product values. It’s early days,
but all signs are very exciting.
Mitigating increased costs
The changes within the 2024 Budget has added
to our cost bill, as it has for every other retailer.
However, we believe we can largely mitigate the
cost headwinds through a range of initiatives. We
anticipate that our sales will remain robust because
our core customer base is the least affected by
economic environment, and the majority of our
sales are distressed purchases and replacements.
Looking ahead
We are now five years since the Covid spike in
volumes through the 2020 and 2021 lockdown
period; consequently, the three years since have
seen record low volumes. However, people have
been working at home more than ever, meaning
electrical products have been used more. Whilst
it’s impossible to predict exactly, I’m hopeful that
over the next couple of years, we will start to see
some renewal cycles flowing in to market demand
and we are now extremely well placed to capitalise
fully when that does arrive. As a result of all of the
above, I am optimistic about the year ahead and
believe we have the right people, strategy and
operational model to make the most of the exciting
opportunities in front of us.
John Roberts
Founder and Chief Executive Officer
1
Figures stated on this page exclude any revenue or profit/loss from musicMagpie
AO World PLC Annual Report and Accounts 2025 13
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Financial & Operational Review
“We have continued to deliver
exceptional service to our
customers and I’m pleased with
the resultant revenue growth and
profitability.”
Adjusted profit before tax growth
outpaced revenue growth
We have successfully returned to growth,
repositioning the business with our membership
model underpinning sustainable long-term value
creation. Group revenue has grown over 9% in the
year, with our underlying retail business delivering
double digit growth. Our impressive Trustpilot rating
(4.9/5) demonstrates that our large customer base
is consistently delighted by our service. The well
documented pressures on the UK consumer have
inevitably impacted demand in the electricals
market, however, our core business of MDA – which
represents about 60% of our total revenue – remains
robust. In the coming year I expect us to continue to
grow revenue, control and leverage our costs with
scale towards our medium term 5% PBT target, and
convert those profits to cash.
Operational highlights
B2C Retail
Our B2C Retail business is one of the UK’s market
leaders in MDA retailing. We serve customers
directly through our website, ao.com as well as
through various marketplaces. Established over 20
years ago, we offer a comprehensive range of MDA
products, smaller domestic appliances, computing,
AV, mobile phones, consumer electronics, gaming
and smart home products.
Ao.com, is the cornerstone of our retail operations
and we pride ourselves on our exceptional customer
service, extensive product range and competitive
pricing. We are committed to enhancing the
customer experience through improved product
information, diverse payment options, flexible
delivery and installation options, and recycling
services. By continuously monitoring the market, we
maintain our price promise to customers.
This year, over 650,000 new shoppers have chosen
to buy from us bringing the total historical customer
base on ao.com to over 12.5 million. We continue
to report market-leading customer satisfaction
scores with a Trustpilot rating of 4.9/5, on over
750,000 reviews, which undoubtedly supports a
customer repeat rate of over 60% during the year.
It also reflects our unwavering commitment to
outstanding service, which we firmly believe is the
most economical way to serve customers – that is,
getting it right first time.
Our share of the total MDA market increased in the
year by 1.1% to 16%, meaning that we have plenty
of headroom to grow further in this core category.
We continue to expand our product range in all
categories, particularly those outside MDA, and now
sell over 9,000 different SKU’s; an increase of around
1,500 in the year.
Maintaining and improving brand awareness
is key to driving new customers, and ensuring
repeat customers keep returning. We continue to
invest in advertising and marketing spend, with an
increase in year on direct acquisition costs with
immediate transaction links, as well as continued
brand investment across sponsorships, postal mail
brochures and other media.
As anticipated, there has been an impact to
operational costs, particularly in our logistics
operation, from inflationary pressures both in the
year and as the benefit of multi-year contracts
roll off. The largest increase in both quantum and
percentage terms has been employment costs.
This will only further increase in FY26 because of
government policy changes to minimum wage
and employers NI. We anticipate that this is likely
to continue for the next few years, and so we will
increasingly look to mitigate these costs through
rationalisation, outsourcing and off-shoring.
Our Care production protection offering performed
resiliently as customers continue to recognise the
value and peace of mind that our plans offer. We
have extended our partnership with Domestic &
General in relation to the sale and promotion of our
Care product protection plans to December 2033.
Shortly before the end of the period we extended
our partnership for a further seven years with
New Day, who provide our Customer Finance. The
extension allows for a number of new innovative
finance products that we look forward to being
released in the coming year.
Mobile
Mobile is the largest category in the electrical sector
by value, and a strategically important product for
AO to make available to its customers - given it is
the product they change the most frequently and
have the most emotional attachment to. However,
AO World PLC Annual Report and Accounts 202514
our Mobile business has faced a challenging
year, and the new contract mobile phone market
decline of c13% has been driven by depressed
customer demand, a lack of handset innovation
and a move towards disaggregated contracts. The
shrinking market, has forced up acquisition costs
through affiliate channels and reduced margins as
competitors fight for share which has ultimately led
to an impairment in the goodwill and intangibles of
the Mobile business of £19.6m. We have focused on
delivering a competitive and compelling proposition
for our customers, but this has resulted in losses in
the year.
We have made strategic progress, notably securing
an exclusive licence from Lebara to operate a
mobile handset webshop under the Lebara brand,
leveraging their customer base. In addition, we
entered into an agreement with Samsung to provide
customers buying handsets on the Samsung
website with a bundled airtime contract.
As we enter the new financial year we are evaluating
the non-core mobile websites with a view to finding
a path to profitability, or closing those sites. We
are looking to find sustainable solutions with the
mobile network operators on whose behalf we
connect customers to ensure that both parties
make a sensible economic return. We will also
enhance the offering on our main ao.com website
and expect to launch a mobile virtual network
operator proposition and improved customer
finance offerings that will leverage our brand and
position our proposition in a way that resonates with
customer demand.
musicMagpie
We were delighted to welcome the musicMagpie
team to the AO family in December 2024. The
acquisition will augment our capability and value
capture in the consumer technology categories
as well as further driving our ESG credentials. We
expect that in time this will improve the affordability
of many products on ao.com for customers, helping
to further differentiate the AO proposition.
Logistics
Our market-leading in-house logistics infrastructure
enables the nationwide delivery of millions of
products annually, seven days a week, serving
both AO’s retail business and third-party clients.
Our delivery network operates from our central
hub in Crewe and encompasses warehouses and
distribution centres with a total of over 1.4 million
sq ft of space, supplemented by a network of 16
delivery depots across the UK.
With our continued focus on profit and cash
generation, our logistics division continued to
look to drive costs down and enhance efficiencies
within our delivery and warehousing operations
throughout the year. Our operations are adaptable
to the retail business’s demands for driver resources
and can leverage our operational gearing through
third-party logistics. Our expertise in complex
two-person delivery, which is highly valued in
our industry, allows us to achieve incremental
profitability without detracting from our
core business.
It is critically important that our people and our
delivery partners are happy and feel valued in
the work they do, given how central they are to
delivering exceptional service to our customers.
During the year we reviewed the structure of driver
payments which has resulted in increased tenure
with a consequential link to customer satisfaction.
As part of the Group’s wider roadmap for technology
development, during the year we commenced the
process of replacing our warehouse management
systems which are expected to go live in FY26. We
continue to invest in our fleet with a focus on driving
capacity per vehicle as well as moving our trunking
fleet to compressed natural gas fuel, with the target
of having the vast majority transitioned by 2030.
We also outsourced the warehousing of smaller
products to a third-party early in FY25. This change
has improved unit economics and enabled us
to expand the range of products available to
customers giving them more reasons to buy from us.
Recycling
Our recycling plant in Telford is one of the most
sophisticated fridge recycling facilities in Europe
and adhere to the highest UK and European
standards. This ensures the safe and efficient
capture of environmentally harmful gases and oils.
We specialise in recycling refrigeration products,
including large American style fridges, but also
process all old fridges and other white goods. Our
highly skilled repairs team refurbishes appliances
that still have a useful life, which are then sold
with a warranty through our established base of
trade customers.
We recycled or reused over 1.2m products in
the year, bringing the total number of products
recycled or reused to over 8.5 million. We continue to
promote recycling by making it easy and accessible
to all our customers.
We invested in our plastics refining facility during
the year with the addition of an extruder which
processes the plastics flakes into pellet form – a
more commoditised and valuable product. This
has helped us develop our circular economy
strategy with clients such as Volution Group and
Ultra-Polymers and we were pleased to have been
awarded BEAMA’s Net Zero Collaboration Award for
our work with Vent-Axia (a Volution Group brand),
creating ventilation products from our recycled
fridge plastics. Our medium-term strategic objective
continues to be “Closing the Loop” partnerships with
key manufacturers to supply recycled products
to make electrical appliances and in doing so
maximising value recovery.
AO World PLC Annual Report and Accounts 2025 15
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Financial & Operational Review continued
We continue to collect third-party volumes using
our own logistics network, providing efficient service
from council amenity sites, while reducing the
number of miles driven.
We continue to monitor potential legislative
changes, including Extended Producer
Responsibility and the possibility that retailers
will have to take back old waste products for free
when they deliver new ones. Although this will add
complexity to our operation and comes at a cost,
with our vertically integrated logistics and recycling
businesses we would be best placed amongst
our competition to deal with such a requirement
should it arise and indeed it could provide further
downstream opportunities.
Technology
During the year we continued to deliver against
our multi-year technology strategy, with strong
progress across digital, data, and core systems
transformation. Our focus remained on enhancing
customer experience, increasing operational
efficiency, and building a scalable, resilient
technology foundation for future growth.
We commenced Phase 2 of our ERP transformation
programme, aiming at delivering significant
process simplification and improved data visibility
across supply chain & warehouse management.
Our application modernisation agenda advanced
further, including implementation of a new Contact
Centre platform that will improve customer support
experience and operational insight.
We also made progress in our data and analytics
strategy—expanding our use of machine learning
and advanced analytics to inform business
decisions and enable more personalised
customer interactions.
In parallel, we continued to invest in cyber security
and resilience – focussing on technology, people
and process - maintaining a strong security posture
in an evolving threat landscape.
Looking forward we will complete the second
phase of our ERP transformation programme
in FY26. We will continue evolving our digital and
data platforms—deepening the integration of AI/
ML capabilities into core business processes and
expanding the use of real-time data to improve
responsiveness and performance. As part of
our modernisation strategy, we will focus on
rationalising legacy systems, accelerating cloud
adoption, and continuing to shift undifferentiated
workloads to enterprise-grade platforms.
Customer experience will remain a key priority.
We will further enhance our personalisation
capabilities, with new tools and data models aimed
at delivering more relevant and engaging customer
journeys across channels.
Finally, we will build on our progress in technology
governance, architecture, and delivery capability—
ensuring we can scale sustainably, innovate
responsibly, and support the evolving needs of
the business.
Financial performance
The 2025 Financial Year saw a continued focus on
growing revenue whilst generating profit and cash.
The financial year covered a period of depressed
consumer confidence because of the ongoing
cost-of-living crisis as well as geopolitical events
giving rise to uncertainty and volatility. Despite this
backdrop, we maintained our strategy of delivering
profitable, cash generative growth, through the
following key steps:
1. Improving gross margin
We continued to improve our gross margin by
optimising product margins and outsourcing the
warehousing of small products to a third party.
This transfer facilitated improved unit economics
which has allowed us to increase the range of small
products we offer to customers.
2. Optimisation of processes
A culture of continual improvement has delivered
efficiency wins across our key operations including
Logistics and Recycling. The vertically integrated
nature of our business enables us to benefit from
small changes in business units, generating financial
gains to the P&L quickly, as well as capability wins
for the business as we look to deliver profitable
revenue growth.
3. Ongoing overhead control
We maintain our disciplined approach to overhead
cost control. We are investing in making operational
efficiencies to deal with inflationary pressures
across all areas of overheads, specifically in our
headcount cost.
4. Conversion of profit to cash
Converting profit to cash is a key component of our
ability to deliver further growth. It has enabled us to
invest in assets to drive the long-term profitability of
the business. The current year has seen us continue
to invest in our plastic processing plant at our
recycling business and acquire musicMagpie to
further strengthen our vertically integrated model.
We increased and extended our Revolving Credit
Facility in October 2024 with the total facility
increasing to £120m with the facility now due to
expire in October 2028.
Our priorities for the current financial year remain to
leverage our cost base and strengthen our balance
sheet for profitable growth. AO remains a market
leader in MDA in the UK with a 16% share of the
total market, which provides us with a strong and
resilient base from which to grow. Our strategy is to
invest prudently in the business, seize the significant
market opportunities that we see in front of us, and
leverage our growing and loyal customer base.
AO World PLC Annual Report and Accounts 202516
Financial & Operational Review continued
The following commentary, unless otherwise stated, covers our UK business only and includes musicMagpie from the point of
acquisition on 12th December 2024.
Revenue
1. Revenue Year ended £m
31 March
2025
31 March
2024
(represented
see note 5)
%
Change
B2C Retail revenue 831.9 743.5 11.9%
B2B Retail revenue 116.9 130.5 (10.5%)
Mobile revenue 94.4 106.3 (11.2%)
Re-commerce revenue 42.6 10.6 297.6%
Third-party logistics revenue 30.5 27.6 10.8%
Recycling revenue 21.3 20.8 2.6%
1,137.5 1,039.3 9.5%
For the 12 months ended 31 March 2025, total Group revenue (including musicMagpie) increased by 9.5% to £1,137.5m
(2024: £1,039.3m). LFL revenue increased YoY by 7% to £1.108bn.
B2C retail revenue
Revenue in our core B2C Retail business has increased 12% YoY in the in line with our plan to achieve double-digit revenue
growth. This increase has been driven by growth in product, service and delivery and product protection plan revenue. Product,
service and delivery revenue is generated from ao.com, marketplaces and third-party websites.
This performance comes as a result of our increased drive to grow not only our MDA market share but also in other electrical
appliances. Our MDA revenue increased YoY by c8%, with our total MDA market share increasing c1% to 16%.
There was an increase in service revenue, which includes membership income, fees for delivery, recycling, installation and
related services mainly driven by the increase in product revenue.
B2B retail revenue
Revenue has decreased 10.5% YoY in B2B, as expected, in line with the groups focus on optimising for profitability.
Mobile revenue
Mobile revenue generated from commissions paid by the phone networks per connection, decreased as a result of a decline in
the total new contract market, and as we optimise our margin and acquisition cost structure.
Re-commerce revenue
Recommerce revenue is generated from product sales through Elekdirect and musicMagpie as well as reworked recycled
products through AO Recycling. Revenue grew YoY by £32.0m mainly as a result of the acquisition of musicMagpie on
12th December 2024.
Third-party logistics revenue
Third-party logistics increased YoY by 10.8%, generating total revenue of £30.5m. Our expertise in complex two-person delivery
is highly valued in our industry, and we undertake a number of deliveries and other services on behalf of third-party clients in
the UK including Hisense and Simba. This revenue delivers incremental profitability. The business will continue to maximise this
revenue opportunity to leverage our operational gearing, without it distracting from the core business.
Recycling revenue
Recycling revenues increased 2.6% over the year, which again was a pleasing performance when taking into account the wider
trading environment. Increased MDA sales and uptake of our recycling service by customers increased processed volumes year
on year along with the introduction of the palletisation of plastic. This increase in volumes was offset by a decrease in output
prices for recycled materials due to market forces.
AO World PLC Annual Report and Accounts 2025 17
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Financial & Operational Review continued
Gross margin
2. Gross Margin Year ended £m
31 March
2025
31 March
2024
%
Change
Gross profit 276.0 243.3 13.5%
Gross margin 24.3% 23.4% + 0.9 ppts
Gross profit, including product margins, services and delivery costs, increased by 13.5% to £276.0m (2024: £243.3m), against
a sales increase of 9.5%. Gross margin increased by 0.9ppts to 24.3%. This increase reflects the significant steps taken
by the business to offset inflationary increases in operational costs through operational efficiencies, pricing actions and
optimising margin.
Selling, general & administrative expenses (“SG&A”)
3. Selling, General & Administrative Expenses (“SG&A”) Year ended £m
31 March
2025
31 March
2024
%
Change
Advertising and marketing 44.4 40.5 9.7%
% of revenue 3.9% 3.9%
Warehousing 62.0 52.2 18.8%
% of revenue 5.4% 5.0%
Other admin 125.7 115.0 9.3%
% of revenue 11.0% 11.1%
Administrative expenses before adjusting items 232.1 207.7 11.7%
% of revenue 20.4% 20.0%
Adjusting items 22.9 – 100%
% of revenue 2.0% –
Total Administrative expenses 255.0 207.7 22.9%
% of revenue 22.4% 20.0%
SG&A costs, excluding the adjusting items (see Alternative Performance measures for further detail) increased to £232.1m
(2024: £207.7m). Costs increased as a percentage of sales as a result of increased warehouse costs.
Advertising and marketing costs increased to £44.4m (2024: £40.5m) but remained flat as a percentage of revenue at 3.9%. We
have seen a small increase in acquisition spend as a percentage of total revenue and have chosen to invest in direct marketing
channels and move away from TV spend.
Warehousing costs, which include the costs of running our central warehouses for both our customers and for our third-party
customers, the outbase infrastructure and our recycling operation increased to £62.0m (2024: £52.2m). The impact of inflation
saw an increase in general property costs including rates; increased operational labour costs as well as an increase in rent for
one of our central warehouses. Operational efficiencies including outsourcing the warehousing of SDA products and leasing
warehouse space to third parties acted to partly offset the inflationary costs.
Other admin costs have marginally decreased as a percentage of revenue, with total pound spend in the year of £125.7m
(2024: £115.0m). Inflationary pressures, mainly driven by wage inflation offset by our continued drive to right size the business
and drive efficiencies.
Alternative performance measures
The group tracks a number of alternative performance measures in managing its business. These are not defined or specified
under the requirements of IFRS because they exclude amounts that are included in, or include amounts that are excluded from,
the most directly comparable measure calculated and presented in accordance with IFRS or are calculated using financial
measures that are not calculated in accordance with IFRS. The Group believes that these alternative performance measures,
which are not considered to be a substitute for, or superior to, IFRS measures, provide stakeholders with additional helpful
information on the performance of the business. These alternative performance measures are consistent with how the business
performance is planned and reported within the internal management reporting to the Board. Some of these alternative
performance measures are also used for the purpose of setting remuneration targets. These alternative performance
measures should be viewed as supplemental to, but not as a substitute for, measures presented in the consolidated financial
statements relating to the Group, which are prepared in accordance with IFRS. The Group believes that these alternative
performance measures are useful indicators of its performance.
AO World PLC Annual Report and Accounts 202518
Financial & Operational Review continued
Adjusted profit before tax
Adjusted profit before tax is calculated by adding back or deducting Adjusting Items to Profit Before Tax. Adjusting Items are
those items which the Group excludes in order to present a further measure of the Group’s performance. Each of these items,
costs or incomes, is considered to be significant in nature and/or quantum or are consistent with items treated as adjusting in
prior periods.
Excluding these items from profit metrics provides readers with helpful additional information on the performance of the
business across periods because it is consistent with how the business performance is planned by, and reported to, the Board
and the Chief Operating Decision Maker.
Adjusting items of £22.9m for the year ended 31 March 2025 are as follows:
• On 12th December 2024, the Group acquired the whole of the issued and to be issued share capital of musicMagpie plc. Costs,
relating to advisor fees, incurred during the period in relation to this transaction total £3.3m; and
• The continued challenging trading conditions in the mobile market triggered an impairment review of the Mobile Cash
Generating Unit (“CGU”) resulting in an impairment charge of £14.7m recognised to reduce the goodwill in relation to this CGU
down to nil and a further impairment of £4.8m against the carrying value of intangible fixed assets.
Due to their size and one off nature, these costs have been treated as adjusting items and are added back in arriving at
Adjusted profit before tax. There were no Adjusting Items in the prior year.
LFL adjusted profit before tax (PBT)
To give a meaningful comparison against prior years and in line with guidance previously given to the market we have stated
a LFL adjusted PBT number. This is Adjusted PBT adding back the pre-tax losses of musicMagpie of £1.7m for the period from
acquisition to 31st March 2025 to enable comparison on a LFL adjusted basis.
The reconciliation of statutory PBT to Adjusted PBT and LFL adjusted PBT is set out in table 4.
4. Adjusted PBT and LFL Adjusted PBT
Year ended £m
31 March
2025
31 March
2024
%
Change
Profit before tax 20.6 34.3 (40%)
Adjusting Items 22.9 – 100%
Adjusted profit before tax 43.5 34.3 27%
Adjusted profit before tax as % of Revenue 3.8% 3.3%
musicMagpie losses 1.7 –
LFL adjusted profit before tax 45.2 34.3 32%
LFL adjusted profit before tax as % of revenue 4.1% 3.3%
Taxation
The tax charge for the year was £10.9m (2024: £9.6m) resulting in an effective rate of tax for the year of 53.0%. The effective rate
of tax is higher than the UK corporation tax rate for the period of 25% predominantly due to the impact of the non-deductible
adjusting items (see above) in particular the goodwill impairment of £14.7m and the acquisition costs of £3.3m. Excluding these
adjusting items, the effective rate of tax for the year would have been 28.3%.
Pillar Two legislation has been enacted in the UK to introduce the multinational top-up tax and domestic top-up tax to
accounting periods beginning on or after 31 December 2023. The Group have performed an assessment of this legislation and
do not expect a potential exposure to Pillar Two income taxes.
Our tax strategy can be found at ao-world.com/ responsibility/group-tax-strategy.
AO World PLC Annual Report and Accounts 2025 19
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Financial & Operational Review continued
Retained profit for the year and earnings per share
The Group’s retained profit for the year was £10.5m (2024: £24.7m).
Earnings per share were as follows:
12 months ended £m
31 March
2025
31 March
2024
Profit
Profit attributable to Owners of the Parent Company from Continuing operations 9.7 24.7
Profit attributable to Owners of the Parent Company from Discontinued operations 0.8 –
Earnings attributable to owners of the parent company 10.5 24.7
Adjusting items- see table 4 above 22.9 –
Adjusted earnings attributable to owners of the parent company 33.4 24.7
Number of shares
Weighted average shares in issue for the purposes of basic earnings per share 571,918,807 577,184,050
Potentially dilutive shares 21,413,462 21,058,825
Diluted weighted average number of shares 593,332,269 598,242,875
Earnings per share from continuing operations (pence per share)
Basic earnings per share 1.70 4.29
Diluted earnings per share 1.63 4.14
Adjusted basic earnings per share 5.70 4.29
Earnings per share from continuing and discontinued operations (pence per share)
Basic earnings per share 1.83 4.29
Diluted earnings per share 1.76 4.14
Adjusted basic earnings per share 5.84 4.29
Adjusted basic earnings per share is calculated by adding back the Adjusting items – see table 4 above
Cash resources and cashflow
At 31 March 2025, the Group’s available liquidity, being Cash and cash equivalents plus amounts undrawn on its revolving credit
facility, was £147.3m (2024: £116.4m). On 8 October 2024, the Group amended and extended its Revolving Credit Facility with the
total facility increasing from £80m to £120m which now expires in October 2028. The total amount utilised at 31 March 2025 on
the existing facility was £0.1m and represents letters of credit (2024: £3.7m of guarantees and letters of credit).
During the year, the Group had a cash outflow of £12.7m (2024: £21.0m inflow) as set out in the table below:
As at £m
31 March 2025 31 March 2024
UK Germany Total UK Germany Total
Cashflow from operating activities 56.8 1.2 58.0 62.1 (0.5) 61.6
Cashflow from investing activities (13.5) – (13.5) (7.6) – (7.6)
Cashflow from financing activities (57.1) (0.1) (57.2) (32.9) (0.1) (33.0)
Cash movement in the year (13.8) 1.1 (12.7) 21.6 (0.6) 21.0
Cashflow from UK operating activities £56.8m (2024: £62.1m)
Despite the improvement in the operating performance in the year as detailed above, operating cashflows reduced largely due
to an increase in tax payments (£9.3m v £1.2m) as a consequence of the majority of tax losses being utilised in the prior year.
Working capital continued to be well controlled with key movements set out in the table below.
The Group’s movement in working capital outflow is set out in the table below:
As at £m
31 March 2025 31 March 2024
UK Germany Total UK Germany Total
Inventories 88.5 – 88.5 79.5 – 79.5
Trade and other receivables 191.0 – 191.0 205.1 – 205.1
Trade and other payables (212.9) – (212.9) (228.0) (0.1) (228.1)
Net working capital 66.6 – 66.6 56.6 (0.1) 56.5
AO World PLC Annual Report and Accounts 202520
Inventories increased by £9m in the year principally as a result of the acquisition of musicMagpie (£5m) and within our Retail
business where we continue to improve availability as well as broadening the range of products, particularly in new categories.
Inventory days were 47 days at 31 March 2025 (31 March 2024: 43 days).
Trade and other receivables reduced by £14m to £191m. This was driven in the main by the impact of lower connection volumes
in our Mobile business with cash received from past connections outweighing new income recognised.
Trade and other payables reduced by £15m to £213m. This again was impacted by Mobile with reduced connections impacting
the purchases in the last quarter in addition to a reduction in upfront payments received from the networks. In the rest of
the Group, the phasing of purchases in Q4 of each year in Retail impacted the year end position and the acquisition of
musicMagpie added c£6m of payables to the current year. Creditor days at 31 March 2025 were 52 (31 March 2024: 55) reflecting
continued support from our supplier base.
Cashflow from UK investing activities £13.5m outflow (2024: £7.6m outflow)
Cash capital expenditure in the year of £8.8m principally related to the continued refresh of delivery vehicles in Logistics and
further investment in our Recycling activities. In addition, in December 2024, the Group acquired the whole of the issued share
capital of musicMagpie for net cash consideration of £5.7m.
Cashflow from UK financing activities £57.1m outflow (2024: £32.9m outflow)
The cash outflow principally related to lease repayments of £21.2m (2024: £18.4m), the purchase in the market, by the
Company’s EBT of shares in the Company totalling £11.1m (2024: £nil) including transaction fees, repayment of borrowings
acquired with musicMagpie of £19.1m and net interest paid of £5.7m (2024: £6.9m). The prior year also included the repayment of
borrowings on the Group’s revolving credit facility of £10.0m.
Net funds and total net debt
As a result of the above movements, Net funds and Total net debt were as follows:
As at £m
31 March
2025 £m
31 March
2024 £m
Cash and cash equivalents at year end 27.4 40.1
Borrowings - Repayable within one year (0.2) (0.2)
Borrowings - Repayable after one year (1.7) (1.9)
Owned asset lease liabilities - Repayable within one year (0.7) (1.6)
Owned asset lease liabilities - Repayable after one year (1.4) (2.0)
Net funds excluding leases relating to right-of-use assets 23.4 34.4
Right of use asset lease liabilities - Repayable within one year (17.7) (15.4)
Right of use asset lease liabilities - Repayable after one year (41.5) (49.8)
Net debt (35.9) (30.8)
Borrowings of £1.9m (2023: £2.1m) relate to a mortgage used to partly fund the acquisition of one of the Group’s recycling sites.
Lease liabilities decreased by £7.4m to £61.4m (2024: £68.8m) principally reflecting capital repayments of £21.2m offset partly
by net new leases of £10.4m (including the reassessment of lease terms) mainly relating to leased premises in our Logistics
business and £3.4m of property leases acquired with musicMagpie.
Mark Higgins
Group Chief Financial Officer and Chief Operating Officer
AO World PLC Annual Report and Accounts 2025 21
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Our risks
Plc Board
• Has overall responsibility for effectiveness of AO’s internal
control and risk management process.
• Approves risk appetite and risk capacity and agrees on the
principal risks and mitigation strategy.
Audit Committee
• Reviews corporate risk register bi-annually; is notified of
any significant changes in perceived risk as appropriate.
• Annually appraises the Group’s Enterprise Risk
Management and Internal Control Framework and makes
a recommendation to the Board as to its effectiveness.
• Oversees implementation of GRC tool in readiness to meet
Code requirements.
Risk Management Committee (“RMC”)
• Meets twice a year to review the Business Unit Risks, the
status of the existing Corporate Risk Register (“CRR”) and
whether all risks are still current and relevant.
• Appraises newly identified risks to determine whether
these impact existing risks or require inclusion on the CRR
in their own right, including an assessment of how each
risk is being mitigated, its inherent and residual risk and
any changes.
Group Audit & Risk
• Shares risk management information and best practice
across the AO Group.
• Provides independent assurance on risk management
and controls.
• Monitors compliance, identifies gaps and improvements,
recommends corrective action.
• Facilitates the administration of the governance, risk
and compliance tool, which enables key controls self-
attestation, improved management information and
validation for the UK controls declaration.
• Issues the annual risk survey, summarises resulting into a
thematic reporting pack for the RMC.
Business Unit Risk Management
• Meetings twice a year for each business unit or more
frequently as required to assess emerging and existing
risks, how these are being mitigated and how changes from
within that business unit, or the wider Group, or even at a
macro level, may impact them.
• Each business unit has its own risk register, assessing the
likelihood and impact of the relevant risks, which together
combine to form our Corporate Risk Register.
Other risk management bodies
• A Data Security and Protection Steering Committee
and Data Protection and InfoSec teams that support
information security and data protection governance.
• SM&CR Steering and Oversight Committee to ensure we
are treating customers fairly and supporting financial
services governance.
• A senior Health and Safety Committee that brings
together the various health and safety teams within the
business to share knowledge and ensure the right culture is
promoted right across the Group.
How do we manage risk?
To manage our risks, we have developed an Enterprise
Risk Management Framework (“ERM”) with policies
and processes in place for identifying and addressing
risks and with clearly defined lines of responsibility,
accountability and delegation of authority. An effective
ERM allows us to identify, appropriately monitor and,
to the extent possible, mitigate these risks in line with
our risk appetite, so that we can deliver our strategic
objectives and protect value for our key stakeholders.
Internal Audit and Business
Unit Risk Management Committees
Retail
.
Mobile
.
Logistics
Recycling
.
Financial Services
.
musicMagpie
Tech
.
People
.
Financial and Legal
Principal
risks
Internal
audit plan
Audit
Committee
PLC
Board
Risk
Management
Committee
Corporate
risk register
AO World PLC Annual Report and Accounts 202522
Risk Assessment
The likelihood and impact of each risk is assessed against
the Group’s Risk Assessment matrix, which determines its risk
factor and resulting risk category that ranges from minimal
to significant or aggressive. This is then balanced with an
“intuitive” assessment: Do these scores look right both from
an individual perspective and comparatively? Are we missing
anything? This process allows us to regularly understand the
strength and performance of the controls in place and to
address any potential gaps and weaknesses.
Principal risks
These are the most significant risks faced by the business,
based on a likelihood and impact assessment. These are
set out overleaf. In addition, we carry some significant
accounting risks.
Our risks have varying likelihoods and impacts and
range from operational risks in our day-to-day activities;
strategic risks due to our high growth and international
expansion strategy and external factors such as the market
environment; and legal risks given the regulatory frameworks
to which we are subject.
Risk Appetite
Overall, the Group has a “balanced” approach to risk
taking; we will not be unduly aggressive with our risk taking,
but, being mindful of our distinct appetite for strategic,
operational and legal risk, we may accept a number of
significant risks at any one time in order to foster innovation
and to facilitate growth. We recognise that it is not possible
or necessarily desirable to eliminate some of the risks
inherent in our activities. However, these must be reviewed
against the assessment of other principal risks to ensure
that the level of net risk remains within the overall accepted
risk appetite. For example, where we have already accepted
Key Achievements in FY25 Key Actions for FY26
• Expanded the Risk function to include Fraud, Health
& Safety and Loss Prevention under the Director
of Audit & Risk, enabling improved collaboration,
coordinated activity and increasing their independence
and objectivity.
• Extended the ERM to include musicMagpie, identifying risk
by reconciling relevant business practices to AO’s existing
risk registers, and through SLT interview/group discussion;
all risks have been assessed and have been given a gross
risk rating.
• Completed a material fraud risk assessment and
assurance mapping exercise for the Economic Crime
and Corporate Transparency Act. The key controls will
be included within the Groups GRC tool for periodic self-
attestation and Internal Audit validation.
• Working towards the UK controls declaration (Provision
29 of Corporate Governance Code change), all risks
from the business unit risk registers have been uploaded
into the GRC tool with clear risk ownership assigned. We
have begun to identify and map key controls, starting in
Finance and Tech.
• Deeper dive into risks on the musicMagpie risk register
and, where possible, improved quantification. Assurance
mapping of controls and residual risk scoring to be
completed.
• Completion of testing of GRC tool in Finance, Tech,
Logistics and Recycling.
• Repeat controls identification, assurance mapping,
training, UAT and rollout of the GRC tool to remaining
business units in FY26.
• Periodic reporting on self-attestation compliance to the
Plc Board and Audit Committee by the close of FY26.
an aggressive or material risk, this would then limit the
acceptance of additional material risks. The Company’s
Risk Appetite Statement is reviewed annually, in line with the
strategic direction of the Group, recent experience and the
regulatory environment.
Emerging risks
We have a combined top-down and bottom-up approach
to risk identification. Our Director of Group Audit and Risk
meets with the senior team of each of our business units on
twice per year (and more frequently as required) to assess
emerging (and existing) risks, how these are being mitigated
and how changes from within that business unit, or the wider
Group, or even at a macro level, may impact them. Each
business unit has its own risk register, assessing the likelihood
and impact of the relevant risks, which, together, combine to
form our Corporate Risk Register.
The legal team performs regular horizon scanning to
understand emerging regulatory or legal risks and
developments in governance and the ESG team raise
developments in the ESG field – in particular, relating to
environmental and climate risk.
We have an ESG steering team that supports local business
owners to identify, mitigate and manage climate risk (both
physical and transitional) to instil an overarching approach
to ESG risk management. ESG risks continue to be identified
and manage risk at a local level within business units.
We monitor market developments and macro-economic
developments, and these are discussed at business unit risk
management meetings.
Introduced in FY22, we run an annual risk survey where senior
leaders from across the Group are asked to have their say
on threats to AO in the short and medium to long term. The
results of the survey will feed into the Risk Management
Committee, reconciled to the Corporate Risk Register, and be
included in the upcoming Board discussions on risk.
AO World PLC Annual Report and Accounts 2025 23
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Our risks continued
UK Electricals
Market
IT Systems,
Cybersecurity and Agility
A
B
Relevant strategic pillar
1 2 3
Nature of risk
Uncertainty in the UK (and global) economy has continued with the
conflict in Ukraine, the situation in Gaza and recent trade tariffs being
imposed by the US.
Inflation continues to squeeze many consumers, which can affect
consumer demand (and, therefore, sales), sales rates or cancellation
rates of product protection plans, defaults on mobile phone
contracts or cancellations or a reduction in out-of-contract income
or upgrade rates.
Additionally, our suppliers may be affected by global supply chain
issues due to increased operating and transportation costs.
All these factors can drive competition and make forecasting
challenging.
Control and mitigation
Customer proposition remains strong and in our core category of
MDA it is difficult to replicate our infrastructure and processes.
Robust relationships with suppliers ensure we receive our fair supply
of stock.
Our price match promise and technology ensure that customers get
the best deals, and our digital acquisition capabilities ensure strong
levels of traffic to our websites.
Outside of MDA, we have re-engineered the model to ensure we can
offer smaller appliance and newer categories in a cost-effective way.
We have a good finance proposition, which enables more customers
to easily spread the cost of their purchase.
We closely monitor competitor activity and have the ability to react
quickly to ensure our proposition remains competitive. We continue to
develop our customer retention strategies.
Relevant strategic pillar
1 2 3
Nature of risk
AO’s IT systems are critical for ongoing operations.
Significant downtime of the website or warehouse management
system as a result of a successful systems breach or failure could
affect the ability to trade and could affect our reputation.
The loss of sensitive information may compromise our future
strategies or the loss of data relating to individuals may result in
regulatory complaints/investigations and negative publicity.
Failure to invest in and develop our technological systems could cause
us to rely on inefficient systems and processes
Control and mitigation
All self-built applications are built with high levels of redundancy,
operational monitoring, active alerting, security controls and fault
tolerance. These systems are supported 24/365.
Off-the-shelf products are subject to a procurement and review
process to ensure that their failure modes, availability service levels
and security qualities are well understood.
Information Security risks are mitigated through our security
operations centre and dedicated infosec personnel. Gap analysis is
conducted with Gartner focusing on 16 key metrics.
Regular training and simulations are undertaken alongside external
penetration testing. Policies and standards are defined and
communicated.
Improved data management and backup processes through
enhanced security and the ability to restore critical data within a
significantly reduced timescale.
Overall change during the year
No change
We continue to see “soft” demand in our markets. Our MDA category
has proved fairly resilient; however, the Mobile category has seen a
material decline and more intense competition.
We have seen product protection plans take-up rates remain broadly
the same YoY and cancellation rates relatively stable.
Whilst our supply chains have not been materially impacted by the
geo-political conflicts or the US trade tariff programme to date, there
is still potential for disruption.
Overall change during the year
Increase
We are driving down our “Tech debt” and have improved the
operational qualities of our systems estate, with regard to availability,
performance, recovery and security.
We have transitioned our finance systems to Dynamics 365 and are
looking toward Telephony and Warehouse Management System
transformation over the next 12 months. The cyber threat landscape
continues to become more complex and there have been recent
attacks on major retailers. Against this, AO has continued to make
improvements its cybersecurity posture.
Link to strategy
1
Brand Trust
2
Deepening Customer
Relationships
3
Brilliant Retail Basic
Risk trend
Increase
No change
Decrease
AO World PLC Annual Report and Accounts 202524
Changes to and Compliance with
laws and regulations
C
Relevant strategic pillar
1 2 3
Nature of risk
Changes in regulations or compliance failures may affect our
strategy or operations, in particular in the following areas:
Data protection and privacy
• The basis upon which the Company offers and sells product
protection plans including marketing requirements, rules around
commission arrangements or fair value requirements or the basis
upon which revenue from the sale of such plans is accounted for
• Financial Services regulation, consumer duty and rules around
commission arrangements
• Driver employment status or general employment rights;
• Health and safety
• Mobile and Ofcom rules and guidance
• Environmental, Social & Governance
Control and mitigation
Regulatory developments are routinely monitored to ensure that
potential changes are identified, assessed and appropriate action
is taken.
AO is supported by a legal team who promote awareness and
best practice, an internal audit team which provide assurance on
compliance and a health and safety function.
Further specific governance and steering committees oversee key
regulatory risks, such as data protection and security, health and
safety and financial services.
Third-party legal advice is sought where necessary and any
recommendations are implemented and subject to ongoing
monitoring.
Regular training is conducted, through the learning management
system and, in operational areas, face-to-face Health and Safety
module, as appropriate.
H&S risk assessment programme is in place covering all areas.
Policies and standards defined and communicated.
Relevant strategic pillar
1 2 3
Nature of risk
Culture is a key ingredient in the success of the business and a unique
differentiator from our competitors.
A failure to maintain the culture could affect all areas of the business
including our ability to attract and retain customers, and our
relationships with suppliers and partners. This risk could increase
with outsourcing of certain areas of the business. It could be further
impacted by significant erosion of our leadership team and/or not
having the right amount and capability of dedicated people across
the Group.
There is further the risk of industrial action in our operational areas
due to pay expectations.
Risk drivers include wage inflation, working policies, areas of national
skills shortage and engagement.
Control and mitigation
The Group’s leadership team has a shared responsibility to drive
culture throughout the business on the basis of AO’s values.
Engagement is promoted both locally and Group-wide through
various forums. Employee surveys and engagement groups run to
understand any issues and what we can do better.
Any outsourcing will be done to selected partners who we are
confident will live the same culture and values and understand AO’s
ethos and philosophy.
Attractive remuneration and benefits packages with incentives
for senior management and the value creation plan for the whole
employee population help to attract, motivate and retain. We ensure
that pay levels for all employees are fair and benchmarked. We work
closely with the unions to understand any issues.
Learning and Development hub and programmes develop our people
alongside a variety of apprenticeship programmes.
Overall change during the year
Increase
The pace of regulatory change is increasing and the new government
has promised a wave of new UK legislation to reshape and redefine
compliance standards. From employment law changes, FCA
developments and OFCOM rule changes to greater general scrutiny
in digital markets and increased powers for enforcement bodies; we
will need to stay ahead to navigate these changes effectively.
Overall change during the year
No change
Our culture has benefited from the further stability of the business
over the year and our ways of working are now settled and embraced.
Our Engagement Index Score score has remained materially
constant YoY.
Culture
and people
D
AO World PLC Annual Report and Accounts 2025 25
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Our risks continued
Relevant strategic pillar
1 2 3
Nature of risk
A disastrous event occurring at, or around, one or more of the Group’s
sites, including our main distribution centres, may affect the ongoing
performance of our operations and negatively impact the Group’s
finances and our customers.
Control and mitigation
Our multi-site distribution network in Crewe reduces the single point
of failure risk and reliance on any one distribution centre.
Dedicated engineering teams on site with daily maintenance
programmes to support the continued operation of the multi-site
distribution network in Crewe and Head Office.
A number of standalone controls are in place to mitigate a major
event occurring at one of the Group’s sites.
Insurance policies are also in place to further mitigate this risk.
Relevant strategic pillar
1 2 3
Nature of risk
The achievement of our strategy is partly dependent upon relations,
support and the service provided by key suppliers. If there was
failure on the part of the suppliers or partners, or a breakdown in our
relationship, this would affect our proposition to the customer, and
ultimately sales and profit.
Key partners include:
• Manufacturers and distributors;
• Delivery partners;
• Mobile network operators;
• Finance and Insurance providers;
• B2B and Third-Party Logistics clients; and
• Plant and information technology systems suppliers.
The risk includes the ability to achieve favourable terms, competitive
rebates being agreed,the ability to attract premium brand suppliers
and the risk that we fail to ensure we get a fair allocation of stock
where it is available in limited quantities.
Control and mitigation
There is ongoing management of relationships with key suppliers
to ensure strong business relations. We are careful to listen to the
concerns of all suppliers and clients and act accordingly; have
regular meetings at both operational levels and strategic levels
with key suppliers, and put in place clear service-level agreements
to ensure suppliers have a good understanding of, and are able to
meet,our expectations.
In terms of rebates, these are formally agreed with suppliers via
annual trading terms. Rebates for stretch targets are not included
in financial reporting until the targets are achieved. There is ongoing
management of stock availability and stock procurement to
minimise supply chain disruption and customer dissatisfaction. This
is balanced with the continuous management of working capital to
ensure cash liquidity and headroom.
Overall change during the year
No change
There is ongoing work towards the implementation of an improved
Crisis Management Plan across the Group.
During the year, we have undertaken a BI exercise in conjunction with
our insurances brokers to give us a comprehensive view of impact
analysis for logistics and recycling.
Overall change during the year
Decrease
Our manufacturer and supplier relationships have continued
to be strong over the year, with the improvement in liquidity and
simplification in strategy enabling us to enhance these even further,
ensuring good allocation of available stock.
Our relationships with D&G and NewDay remain strong and we have
renewed our contracts with both parties as we ensure we deliver the
right insurance and finance offerings in this regulated space.
Whilst the continued decline of the post-pay mobile market puts
pressure on relationships with MNO partners, this is balanced with
some improvements in reaching strategic partnerships.
Business
Interruption
E
Key Commercial
Partnership
F
Link to strategy
1
Brand Trust
2
Deepening Customer
Relationships
3
Brilliant Retail Basic
Risk trend
Increase
No change
Decrease
AO World PLC Annual Report and Accounts 202526
Viability assessment
In accordance with paragraph 31 of the 2018 UK
Corporate Governance Code, the Directors have
assessed the viability of the Company and the
Group over a three-year period to 31 March 2028.
The Directors believe this period to be appropriate
as the Company’s and the Group’s strategic
planning encompasses this period, and because
it is, typically,a reasonable period over which
the impact of key risks can be assessed within a
fast-moving retail business, and changes in the
economic environment that may alter customer
demand patterns. The Directors are mindful;
however, of the heightened uncertainty driven
by the current macro-economic climate and
accept that forecasting across this time frame is
more challenging.
In making this viability statement, the Directors have
reviewed the overall resilience of the Group and have
specifically considered:
• A robust assessment of the emerging and
principal risks facing the Group, including those
that would threaten its business model, future
performance, solvency or liquidity. These risks,
and how they are mitigated, are set out above on
pages 24 to 26; and
• Financial analysis and forecasts showing current
financial position and performance, cash flow and
covenant requirements.
The Directors have reviewed the Group’s annual
and longer-term financial forecasts and have
considered the resilience of the Group using
sensitivity analysis to test these metrics over the
three-year period. This analysis principally involves
varying the key assumptions, being revenue growth,
gross margin and wage inflation, and evaluating the
monetary impact of these severe but plausible risks,
in isolation and combined, and the likely degree of
mitigating actions available to the Company over
the three-year period if such risks did arise.
Based on the Group’s current position, the Board
has a reasonable expectation that the Group and
Company will be able to continue in operation and
meet its liabilities as they fall due, retain sufficient
available cash and not breach any covenants over
the period of their assessment and the remaining
term of the current facilities. As is customary when
dealing with longer-term debt facilities, the Board
would expect these to be renewed well in advance of
their next term with the current facility due to expire
in October 2028.
Going concern statement
The Group’s business activities, together with the
factors likely to affect its future development,
performance and position, are set out in the
Strategic Report on pages 02 to 48. The financial
position of the Group and its cash flows are
described in the Chief Financial Officer’s review
on pages 14 to 21. In addition, the Notes to the
Financial Statements include the Group’s policies
and processes for managing its capital, its
financial risk management objectives, details of its
financial instruments and hedging activities, and
its exposures to credit risk and liquidity risk. Further
information on our risks is on pages 24 to 26.
Notwithstanding net current liabilities of £9.2m as
at 31 March 2025, the financial statements have
been prepared on a going concern basis which
the Directors consider to be appropriate for the
following reasons:
The Group meets its day-to-day working capital
requirements from its cash balances and the
availability of its £120m revolving credit facility
(which was amended and extended in October 2024
to now expire in October 2028).
The Directors have prepared base and sensitised
cash flow forecasts for the Group for a period of 12
months from the expected approval of the financial
statements (“the going concern period”) which
indicate that the Group will remain compliant with
its covenants and will have sufficient funds through
its existing cash balances and availability of funds
from its revolving credit facility to meet its liabilities
as they fall due for that period. The forecasts take
account of current trading, management’s view on
future performance and their assessment of the
impact of market uncertainty and volatility.
In assessing the going concern basis, the Directors
have taken into account a severe but plausible
downside to sensitise its base case by applying a
sales risk of 15%, which restricts revenue growth
to levels below those achieved in the year ended
31 March 2025. Further sensitivities have been
modelled to reduce gross margin by 1% and to
assume greater than inflation staff costs for non
head office staff.
Although not modelled in the severe but plausible
downside scenario, the risks above could be
offset with controllable mitigations across various
expense categories and discretionary spend. Under
this severe but plausible downside scenario the
Group continues to demonstrate headroom on
its banking facilities and remains compliant with
its quarterly covenants, which are interest cover
(Adjusted EBITDA being at least 4x net finance costs)
and leverage (Net debt to be no more than 2.5x
EBITDA). The likelihood of a breach of covenants is
considered remote and hence headroom against its
covenants has not been disclosed.
Consequently, the Directors are confident that the
Group and Company will have sufficient funds to
continue to meet its liabilities as they fall due for
at least 12 months from the date of approval of the
financial statements and therefore have prepared
the financial statements on a going concern basis.
AO World PLC Annual Report and Accounts 2025 27
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Section 172 Statement and engaging
with our stakeholders
The Board has a duty under section 172 of the Companies Act
2006 (“s172”) to act in a way they consider, in good faith, would be
most likely to promote the success of the Group for the benefit of
its shareholders. In doing so, the Board must have regard to the
matters set out in s172.
Section 414CZA of the Companies Act 2006 requires
the Board to describe in this Annual Report how,
during the financial year, they have had regard
to the matters in s172 when performing their duty
(a “s172 statement”). This section (pages 28 to
30) should be taken as the s172 statement for
the year ended 31 March 2025 and is intended to
give information relevant to the requirements on
employee engagement and fostering business
relationships set out in the Large and Medium-sized
Companies Regulations 2008 (SI2008/410).
To fully understand how the Board has regard to the
matters in s172, readers are encouraged to read the
“How we create value” section on pages 04 to 05, the
“Fair, equal and responsible” section on pages 42 to
46 and the “Stakeholder voice into the Boardroom”
section on page 61.
To enable them to have regard to the matters set
out in s172, the Board seeks to understand the
interests of stakeholders and, therefore, receives
regular updates on the Group’s engagement
with the various stakeholder groups. The
Group’s key stakeholder groups are Customers,
People, Suppliers and Partners, the Community,
Shareholders and Regulators. The engagement with
each of the key stakeholder groups is described in
more detail below:
An example of how the Board have regard to
the matters in s172 when making decisions
During 2024, the Board were asked to consider a proposal to acquire musicMagpie PLC. In considering the proposal, the
Board had particular regard to:
• The likely consequences of this decision in the long term:
the Board considered that the acquisition presented
a strategic opportunity to integrate one of the UK’s
leading mobile recommerce operators into the wider
AO business. With highly complementary business
models, the Board considered that the acquisition
would enable AO to broaden its customer offerings while
simultaneously advancing its sustainability objectives.
• The interests of its employees: as explained above,
the Board considered the acquisition would support
growth, which would benefit team members by securing
employment for both existing AO employees and
employees of musicMagpie.
• The need to foster the Company’s business relationships
with suppliers, customers and others: the Board
considered that a top-tier trade-in service was essential
for AO to enhance its consumer tech offering and
that musicMagpie represented a significant enabler
in unlocking value through AO’s reverse supply chain.
Moreover, the Board considered that musicMagpie itself,
as part of the enlarged AO business, stood to leverage
AO’s existing supply channels, which could lower its
cost of acquisition and allow them to scale refurbished
technology with operational precision. musicMagpie’s
commitment to customer satisfaction and its
exceptional brand are closely aligned with our values,
and our shared cultures create a strong foundation
for collaboration.
• The impact of the Company’s operations on the
community and the environment: the Board considered
that the alignment of the two business positioned
them to drive growth and innovation in an increasingly
environmentally-conscious market.
• The desirability of the Company maintaining a
reputation for high standards of business conduct: the
Board considered that musicMagpie’s commitment
to customer satisfaction and its exceptional brand
were closely aligned with AO’s values, with these shared
cultures creating a strong foundation for collaboration.
AO World PLC Annual Report and Accounts 202528
Key stakeholder group How we engage What matters to them How we have responded
Customers
Understanding our
customers is critical to the
success of our Group. This
allows us to continually
improve our customer
proposition, thereby
driving sales, increasing
profitability, and allowing us
to invest in and innovate our
capabilities, and leverage
new opportunities.
• Dedicated, highly
responsive customer
service centre, a variety
of digital communication
channels, including
social media platforms
and Chatbot
• Dedicated account
management for
B2B clients
• Collection of customer
satisfaction metrics,
use of feedback and
review platforms (such
as Trustpilot), extensive
customer research,
including surveys, data
analytics and virtual
customer lab sessions
• Brilliant customer service
through the purchasing
journey and during the life
of their products
• Value for money
• Environmental impacts
and compliance matters,
such as the protection of
their data
• Continuous focus on
the quality of product
information, including
information on product
running costs
• Continuous improvements
in communications and
processes in the event
of order issues, delays or
faulty products
• Initiatives designed
to promote brilliant
customer service, such
as membership, our 5*
service level agreement
and our “expert agent”
programme
People
Our AO culture is the most
important element in
binding the competencies
in our business model
together.
• Regular business updates
provided through our
electronic information
channels and the CEO’s
in-person “State of the
Nation” updates and
Q&A sessions
• Feedback mechanisms
including employee
surveys, engagement
forums, listening groups
and a confidential
whistleblowing hotline
• Formal partnership
with USDAW (in Logistics
business)
• A positive culture,
well-being, and health
and safety
• Reward and benefits
• Career and development
opportunities
• One-day training sessions
for all new starters, led
by the CEO, providing
an understanding of
AO’s mission, purpose
and values
• Bespoke health and
safety training courses
designed and continual
investment in safe working
practices
• Pay increases applied to
all team members, several
talent development
programmes and AO Play
(our interactive learning
and development tool
containing numerous
courses).
Suppliers and
Partners
Our relationships with
suppliers and partners
remain critical to our
performance. We believe
that we and our suppliers
benefit the most where we
have long-term, mutually
supportive relationships,
and work with them to
ensure that our respective
standards and expectations
of business conduct are
adhered to.
• Annual “top to top” (CEO)
meetings to understand
how we maximise our
mutual objectives
• Buying visits to see
and understand
product roadmaps and
capabilities
• Steering and governance
meetings with finance
partners
• Long-term, mutually
supportive and
collaborative
relationships
• Customer proposition
enhancements, including
the provision of quality
product information and
brilliant after-care
• Payment practices
• Continued focus on
effective supplier
onboarding
• Quarterly review sessions
with all key suppliers to
ensure plans are working
and aligned
• Continual improvements
to product information
and recommendations
to better explain the
manufacturers’ products
AO World PLC Annual Report and Accounts 2025 29
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Section 172 Statement and engaging
with our stakeholders
continued
Key stakeholder group How we engage What matters to them How we have responded
The Community
As a Group, we aim to build
relationships and support
the communities where we
operate. We consider the
social and environmental
impact of our operations
and are fully committed to
responsible retailing.
• Supporting charities,
participating in
fundraising initiatives and
promoting sports and
youth groups
• Employability forums and
linking with employment
services and educational
institutions
• Participation in recycling
forums and fostering
relations with the
Environment Agency
and bodies, such as
WEEELABEX
• Environmental
performance and
recycling of waste
products
• Investment and
community support
• Sustainability initiatives
• Continued focus on our
environmental impact
and investigation of
alternative fuel vehicles
for our logistics fleet
• Continued investment
in our in-house recycling
capabilities
• Promoting fundraising
efforts through the
AO Smile Foundation’s
matched fundraising
programmes
Shareholders
Access to capital is vital to
the long-term performance
of our business. We aim to
provide our shareholders
with fair, balanced and
understandable information
on our strategy, business
model, culture, performance
and governance.
• Financial results
presentations
• Institutional investor
roadshows and investor
conferences
• Regular meetings
with shareholders and
analysts, conducted by
the Executive Directors
and, where relevant to
their area of responsibility,
the Chair and the Board
Committee Chairs
• Performance, returns
and the provision of
operational and financial
information
• Opportunities and
strategic ambition
• Risk appetite and
governance controls
• Continued focus on
profitability and cash
generation
• Continuous improvement
of operational and
financial controls,
including support systems
• Regular communication
between the Board
and the investment
community
Regulators
Compliance with and
anticipating changes
to regulations is key to
our continued success.
Important regulatory bodies
include the FCA, due to both
our market listing and our
financial services activities,
the ICO, due to the volume of
customer data we process,
and VOSA, due to the size of
our logistics fleet.
• Attending regulatory
updates and horizon
scanning
• Participation in
regulatory surveys
• Participation in industry
consultations, such as
the recent consultation
to amend or replace the
current Waste Electrical
and Electronic Equipment
(WEEE) Regulation
• Compliance and
cooperation
• Environmental impact
• Public safety
• Maintaining an effective
internal control
framework and meeting
all public disclosure
requirements
• Progressing on our carbon
reduction programme
• Embedding a SMCR
governance framework,
with Board-level oversight,
to protect consumers
of our financial
services products
AO World PLC Annual Report and Accounts 202530
Sustainability
Our operations, behaviour and how we treat our people and communities
have a wide-reaching impact on the environment and society.
We understand the importance of aligning our purpose, values and strategy with the needs of our stakeholders to build
long-term value in a sustainable way. We see sustainability as an investment to stay relevant for customers, suppliers and our
people, whilst protecting the plant and driving down costs and realising efficiencies in our operations.
Sustainability is entrenched across AO’s business with our continued investment in our vertically integrated recycling
facilities and plastics refining facility (with the addition of the “extruder” added during the year) and our recent acquisition
of musicMagpie, which buys unwanted tech and sells refurbished products, supporting the circular economy and driving
down waste.
We are driving forward initiatives to reduce carbon in our logistics operations and continue to promote the well-being of our
people and our community outreach projects.
1
Sustainable
living
2
Fair, equal and
responsible
3
Fit for the
future
* A materially assessment was conducted in 2022 to identify the topics that are driving AO’s current and future ESG performance, defining these as
risks, impacts or opportunities. As part of our enterprise risk management processes we have this year, revisited the assessment and report our
material sustainability risks remain unchanged as against previous years.
Our ESG strategy is made up of 3 pillars addressing our material topics*,
and our long-term objectives remain unchanged
Sustainable
living
Re-Use &
Recycle Circular
Economy
Product
Innovation
Engagement,
Well-being
and Inclusion
Talent
Health & Safety
Ethical Practices
and Resilient
Supply Chains
Data
Protection and
Cybersecurity
Charity &
Community
Carbon
Reduction
Fair, equal and
responsible
Fit for the
future
1
3 2
AO World PLC Annual Report and Accounts 2025 31
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Promote circular and sustainable consumption and recycling
We’ve invested significantly in our in-house rework
and recycling capabilities over the years, taking
responsibility for the lifecycle of the products we
sell. We offer our customers the option of collection
of their Waste Electrical and Electronic Equipment
(“WEEE”) and take it back to our facilities. Our
priority is to repair and refurbish an appliance where
this is appropriate, giving it a new lease of life thus
preventing goods from being prematurely recycled.
If reuse is not appropriate, we responsibly recycle
the product, maximising the value recovered.
Our plastics refining facility was enhanced through
the year with the addition of an extruder which
refines the plastics flakes into pellet form – a
more commoditised and valuable product. This
has helped us develop our circular economy
strategy with clients such as Volution Group and
Ultra-Polymers and we were pleased to have been
awarded BEAMA’s Net Zero Collaboration Award for
our work with Vent-Axia (a Volution Group brand),
creating ventilation products from our recycled
fridge plastics.
We continue to work with an MDA manufacturer to
meet our goal of creating a fridge from our fridge
plastics. Progress is slow, and the legal requirements
to achieve food grade plastic is a challenging
process. However, laboratory tests and trials have
been very successful and several prototype fridges
have been manufactured. The final step is to be
granted food grade approval, which is likely to be
another 9–12 months.
With the acquisition of musicMagpie this year we’re
able to offer our customers the ability to trade-in
unwanted consumer tech, either when buying new
tech from us, or as a standalone service.
Sustainable living
1
Recycle and reuse KPIs
c.8.6m
MDA appliances received since
opening Telford for recycling or reuse
c.1.2m
MDA appliances received in Telford in
FY25 for recycling or reuse (up 11.6%)
c.57k
Damaged and faulty appliances processed at our
reuse/rework facility in Crewe in FY25 (up 26.7%)
FY24 1.0m FY24 45k
c.9.3k
Tonnes of Plastics processed at
our plastics recycling and refining
facility in FY25 (down 17%#)
c.3.5k
Tonnes of packaging processed
at Telford in FY25 (up c.30%)
c.191k
*
Used consumer technology products were resold or
rented through Music Magpie in FY25 (up 6.09%)
FY24 11k FY24 2.7k FY24
*
180K
AO Armour
AO Armour is a new initiative implemented this year to maximise the value capture of “returned”
products by minimising damage on the return journey. We used to use bubble wrap when collecting
unwanted or faulty product. Now, we have started to use AO Armour; thick padded wraps with lids,
which surround and are strapped to each individual product. Initial findings are showing more
unwanted products making it back to retail grade rather than being damaged on the return journey.
Faulty products are also returning in better condition, which helps diagnose faults.
Since its inception, musicMagpie has had a core principal message for consumers: “smart for
you, smart for the planet.” As one of the largest recyclers of consumer mobile phones in the UK,
sustainability and the circular economy are embedded within its business model. musicMagpie’s core
strategy is simple: to provide consumers with a smart, trusted and sustainable way to sell unwanted
items and buy or rent refurbished consumer technology and physical media products.
Nearly 200,000 used consumer technology products were resold or rented in FY25. In addition, the
Group re-sells millions of books and disc media each year that could have ended up as waste.
# volumes managed down due to market headwinds
*Figures given are for the 12 months to 31 March 2025, vs 12 months to November 2024
AO World PLC Annual Report and Accounts 202532
The non-renewable energy
sources used to power our
buildings, recycling facilities
and the products we sell, fossil
fuels used in our transport fleet,
and manufacturing within our
global supply chains, all create
greenhouse gases that are
warming our planet.
At AO, we are committed to reducing our
consumption appropriately where we can and seek
renewable energy alternatives where cost effective.
We also know that we must consider the impact, not
just within our own operations but across our entire
value chain, including how our customers use the
products that we supply to them and ultimately
how they are repaired or recycled at the end of their
first life.
Note: Emissions quoted in the following sections are for the
AO Group excluding the acquired musicMagpie Group, unless
specified otherwise.
The total direct and indirect emissions of our Group
during FY25 are estimated to stand at 1.49 million
tCO
2
e (FY24 1.41m), up 5.2% but our carbon intensity
ratio is down from 21.12 to 20.12 (5.1% reduction) given
an increase in revenues (and an increase in delivered
units of c.15%)
Scope 1 – Fleet and Gas
The direct emissions of the AO Group for FY25
were c.1.3% of our total emissions (broadly flat
YoY). The major contributor to our scope 1 emission
is UK diesel due to the activities of our in house
logistics and recycling fleets. The transition to
a decarbonised fleet is a long-term strategic
priority. In absolute terms our scope 1 emissions
have increased very slightly YoY (+64 tCO
2
e – a
0.3% increase). This is mainly due to an increase in
reported gas usage with updated emission factors
negatively affecting us. Vehicle emissions were
down very slightly, again with update emission
factors driving an increase but we have reduced fuel
consumption YoY due to our continued investment
in telematics and we are seeing benefits as we start
to transition to alternative fuels.
Over the last 12 months, we have seen improvements
in the technology of electric home delivery vans
(EVs), with increased payload and range capabilities
and have placed orders for 10 such vehicles to
trial which are expected to arrive in the Summer.
Assuming these are successful, we would look
to roll in further EVs in our normal replacement
cycle over the medium term to drive down our
scope 1 emissions.
In relation to tractor units, we continue to monitor
development of electric and hydrogen options,
which are gathering pace. In the meantime we
continue with our strategy of using bio Compressed
Natural Gas (CNG) tractors as a transitional
measure, now operating 10 with a further 20
expected to be operational within FY26. CNG
price fluctuations have stabilised and we’ve seen
a consistent saving per annum versus diesel.
Importantly, the CO
2
saving of a fully Bio- CNG
fleet is circa 7,000 Tonnes annually, which could
represent a c. 84% reduction for our trunking fleet.
We expect to trial an electric tractor unit to trial
next year.
We have been assessing the viability of longer-semi-
trailers (LST), which add 10% more capacity than
our mega trailers and which could save a further
800 tonnes of CO
2
. The LSTs are compatible with
the CNG tractor units. We have purchased 20 LSTs
and these have been working well at certain sites.
Some sites may not be appropriate for LSTs given
space and so this is being factored into our property
strategy to ensure we can accommodate these
larger trailers. Orders for a further 50 LSTs have
been placed.
To support a further roll out of Electric Vehicles we
recognise the need to ensure our properties can
deliver appropriate charging and infrastructure.
We have engaged a consultancy to conduct
infrastructure feasibility assessments to determine
the number of EVs that can operate from each
site without major infrastructure upgrades and to
highlight the design choices available to Logistics
(including the integration of existing energy
infrastructure), the capex/opex implications,
phasing of works in line with the EV rollout and the
benefits of each design choice. This will include an
impact assessment of the use of Solar PV canopies
where applicable.
Scope 2 – Electricity and other
environmental considerations
Scope 2 is relatively small, with the previous market-
based figure taking into consideration AO’s wide
adoption of renewable energy purchasing to date.
However, given the increase in renewable energy
costs we have made a commercial decision to
switch to non-renewable energy part way through
the year. Both market based and location based
emissions have increased through the year (up
81% and 9% respectively) due to the use of non-
renewable sources, change in market-based
emission factors and an increase in absolute energy
usage as we expand our operation and obtain more
accurate data from some of our sites.
46% of our Scope 2 emissions are generated by our
two recycling sites, and we are exploring whether
this usage and the associated costs could be offset
against our sustainable initiatives.
Supporting the transition to a low-carbon economy
AO World PLC Annual Report and Accounts 2025 33
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Sustainable living continued
1
In addition to the above, our focus over the year has
been to work on initiatives to reduce our electricity
consumption across the estate, as follows:
• Voltage optimisation has been trialled in one
of our warehouses, which reduces the voltage
entering our property from the grid; consumption
at the site has dropped c.7% Further sites
are planned.
• Smart meters have also been installed to ensure
that the majority of our AO controlled electricity
(not landlord supply) has regular meter readings
rather than manual submissions. This should lead
to more accurate information in consumption,
and help us identify when and where we
overconsume, therefore how to reduce.
• Lighting has been upgraded at the Magpie
facilities, including updating older LED fittings
and replacing T5 fluorescent tubes.
Other environmental initiatives include:
• ESOS actions progressed.
• Retained Magpie’s zero waste to landfill status
for operational waste streams and worked on
reducing the volume of waste going to EfW
(energy from waste).
• Installing waterless urinals in certain sites to save
water consumption and enhance the condition of
the pipework.
• Training was completed with Reconomy to
improve waste awareness and segregation
practices for the Magpie group which has resulted
in an overall decrease in waste volumes.
Key environmental initiatives for FY26 include:
• Rainwater harvesting installation opportunities at
high consuming sites.
• Installing smart water meters at high consuming
sites to further understand when and where
we consume.
• Air conditioning reports to take place to ensure
we are managing efficiently.
• Fork Lift Truck charging opportunities
• Further voltage optimisation installations.
• Horizontal wind turbines – we are trialling these
on Magpie’s warehouse roof in conjunction with a
supplier to see how the turbines perform at lower
height; if successful we could utilise the renewable
energy it generates.
Scope 3 and sustainable products
The indirect emissions in the GHG inventory
dominate our Group emissions, with Scope 3
(emissions in the value chain) representing over
98% of total emissions. The overwhelming majority
of these Scope 3 emissions are linked to product
lifecycle as a result of their manufacture, use
and disposal. We are exploring whether any of
these emissions could be offset against our reuse
initiatives, through AO Recycling, Elek Direct and
musicMagpie.
We recognise that while customer energy usage
falls under our Scope 3 emissions, where we are
indirectly responsible, it accounts for c. 67% of our
total reported emissions.
In FY25, we have taken deliberate steps to promote
energy efficiency and reduce carbon consumption
among our customers. By collaborating closely with
our suppliers, who have supported these efforts
through promotional funding, we have integrated
energy efficiency into our joint business plans. Our
commitment is reflected in the active promotion
of energy-efficient products, working towards
embedding environmental responsibility within our
strategy. We have maintained consistent messaging
on ao.com, enhanced website functionality, and ran
targeted brand and marketing campaigns.
The YourEko tool on the website allows customers
to compare MDA products based on energy
consumption and lifecycle costs, helping them
make cost-effective and sustainable choices. We
have also provided guidance on product usage
to ensure customers are aware of energy-saving
settings with category-specific energy usage videos
now supporting MDA products. Our website features
energy rating filters, and highly efficient appliances
are showcased under the “Trending” menu.
AO World PLC Annual Report and Accounts 202534
Greenhouse gas emissions
Scope 1, 2 & 3 Greenhouse Gas Emissions
1
for AO Group excluding musicMagpie
Year ending 31 March
% change
FY25 v FY24 2025 tCO
2
e 2024 tCO
2
e 2023 tCO
2
e 2022 tCO
2
e 2021 tCO
2
e 2020 tCO
2
e
Scope 1 (direct emissions): Total
emissions from operations and
combustion of fuel -0.4% 19,725 19,794 21,919 38,081 31,958 26,587
Scope 2 (indirect emissions):
2
Total
emissions from energy purchased
Market-based 81.1% 514 284 304 2,992 1,284 1,697
Location-based 7.8% 2,533 2,350 2,350 3,396 3,411 3,679
Total gross Scope 1 and 2:
Market-based 0.8% 20,238 20,078 22,222 41,073 33,242 28,284
Location-based 0.5% 22,257 22,114 24,268 41,477 35,369 30,266
Carbon Intensity ratio:
3
Tonnes of CO
2
e per
£m of revenue -5.9% 20.05 21.31 21.31 30.32 21.29 28.55
Scope 3
4
Category 1: Purchased goods &
services -5.3% 454,472 479,733 445,349 – 260,044 –
Category 3: Fuel and energy 0.4% 5,278 5,258 5,344
Category 5: Waste in operations
5
65.8% 7 4.5 4.54
Category 7: Commuting -5.4% 2,228 2,356 3021
Category 9: Downstream transport 2.5% 381 372 705
Category 11: Use of sold products 10.9% 1,001,762 903,129 1,036,426 – 928,296 –
Category 12: End-of-life treatment of
sold products
5
14.8% 627 546 621
Other Scope 3 emissions – – – – – 14,564 –
Total gross Scope 3 emissions 5.3% 1,464,754 1,391,397 1,491,470 – 1,202,904 –
Total gross Scope 1, 2 and 3 (location)
emissions 5.2% 1,487,012 1,413,542 1,515,738 – 1,238,273 –
% change
FY25 v FY24 2025 2024 2023 2022 2021 2020
Energy use kWh
(Scope 1 and 2) 9.5% 13,465,184 12,297,977 13,442,795 15,769,141 13,156,641 14,573,240
1
FY20 and FY21 Scope 1, 2 and 3 (where reported) emissions included our emissions in those categories for both the UK and Germany. Figures reported for more recent
years relate only to the UK. All calculations across Scope 1–3 use UK Gov GHG emissions factors.
2
Emissions from electricity use, Scope 2, have been estimated using “location-based” and “market-based” approaches. For the location-based approach, the
average emissions factor for the country is used, applying country-specific emissions factors published annually by the International Energy Agency (“IEA”). The
alternative market-based approach refers to renewable energy certificates, and where no supplier-specific data is held, factors published for residual emissions.
3
In order to express our annual emissions in relation to a quantifiable factor associated with our activities, we have used revenue as our intensity ratio as this is a
relevant indication of the size of our operation.
4
Emissions in Scope 3 relating to categories 1 and 12 have been estimated using secondary data (industry average); for category 5 we have used secondary data and
some supplier data and for category 11 we have used primary (product efficiency) and secondary (product lifespan).
5
We have updated FY24 and FY23 (but not prior years) to include the updated emissions factor determined by the government to make a meaningful comparison
against FY25.
We acquired musicMagpie on 12 December 2024 and, to make a meaningful comparison, emissions of the Magpie Group have
not been included in the above table. For the period from acquisition to 31 March 2025, Magpie’s scope 1, 2 (location-based)
and 3 emissions were 218, 74 and 6,216 tCO
2
e respectively giving a total of 6,508 tCO
2
e for that period. The enlarged Group’s
emissions (i.e. including those Magpie emissions) for the year were 19,943; 2,607 and 1,470,970 tCO
2
e for scopes 1, 2 (location-
based) and 3 respectively, with an aggregate total of 1,493,520 tCO
2
e (a 5.7% increase for the enlarged Group YoY). Following
assessment we have concluded that the emissions from musicMagpie not significant in the context of AO Group FY23 emissions
and therefore no change has been made to our baseline and FY23 remains the appropriate baseline year.
AO World PLC Annual Report and Accounts 2025 35
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Task force on climate-related financial
disclosures (“TCFD”)
Governance
The Board recognises the importance of understanding and
managing the impact of potential climate-related risks and
opportunities on AO’s business and strategy and because of
this we have reintroduced an ESG steering group to help drive
our strategy forward and facilitate cross-group collaboration
amongst local area owners.
We confirm that the following section of the Annual
Report includes all climate-related financial
disclosures consistent with the Taskforce on
Climate-related Financial Disclosures (“TCFD”)
recommendations and recommended disclosures
and is in line with the current Listing Rules
requirement (as referred to in Listing Rule 9.8.6R(8))
having considered section C of the TCFD Annex
“the Guidance for all sectors”.
These disclosures also satisfy the Companies
(Strategic Report) (Climate-related Financial
Disclosure) Regulations 2022.
Audit Committee
Recycling
Risk Management Committee
Decarbonisation Group
(Fleet and Estates)
Product
Board
ESG Steering Group
Governance
Board’s oversight
of climate-
related risks and
opportunities
The Board has oversight of material climate-related risks and opportunities, receiving updates from the Risk
Management and Audit Committees. The Board receives an annual written update on ESG progress which includes
climate related matters and specifically updates on the Group’s recycling strategy and decarbonisation strategy
(and status of the scope 1 emissions) with discussions also held on product lifetime emissions. Separately, it also
reviews and approves the sustainability section of the annual report including the detailed GHG disclosures and
progress YoY. Further, the Board also oversees and approves major capital expenditure, such as the acquisition of new
vehicles and trailers as and when current leases expire or vehicles come to the end of their useful life, and monitors the
resulting effect in GHG emissions from the Group’s fleet. Written papers are produced by the management teams to
aid the Board in its considerations. The Audit Committee considers climate-related topics as part of its review of the
effectiveness of risk management and the associated system of internal control. Our Risk Management Committee
meets at least twice per year to discuss to discuss all key risks (including any ESG risks) but has, from a day-to-day
perspective, delegated the steering of climate risks to our ESG Steering Group and local risk owners, to help drive
progress in our key pillars of: a) Recycling; b) Decarbonisation (Fleet and Estates); and c) Product Emissions, and
facilitate cross-group collaboration amongst local area owners.
We have scheduled an annual ESG overarching review of strategy and progress. However, all significant matters
requiring Board approval are considered from an environmental impact perspective as part of its s.172 obligations. For
example, this year, the Board considered and approved the direction on our fleet transition with further CNG and LSTs
being purchased to aid carbon reduction as well as the EV trials. The Board also has oversight of our circular economy
strategy with our reuse and recycling facilities (including Magpie) being key components of that. During the year, the
Board reviewed our Scopes 1, 2 and 3 emissions for the UK Group and our scenario planning and ESG metrics and targets
from which metrics and some targets have now been set.
Management’s
role in assessing
and managing
climate-
related risk and
opportunities
Management are responsible for identification, assessment and management of climate-related risks and
opportunities, as part of our integrated risk management processes, which are maintained at a business unit level, with
the support of the Director of Group Audit and Risk and ESG Steering Group. Risks raised have been incorporated into
relevant risk registers. Twice per year, business unit risk registers are debated by the RMC, with critical risks recorded on
the corporate risk register. These risks are subject to periodic review to determine whether the risks are being mitigated
within risk appetite.
Our ESG Steering Committee was re-established over the year, to help drive progress in our key working groups of: a)
Recycling; b) Decarbonisation (Fleet and Estates); and c) Product Emissions, and facilitate cross-group collaboration
amongst local area owners
AO World PLC Annual Report and Accounts 202536
Strategy
Climate-
related
risks and
opportunities
identified over
the short,
medium, and
long term
In the table on pages 39 to 41 we explain the climate-related risks and opportunities that could have a significant effect on
our strategy, operations and finances. Risks have been considered across the short term (1 to 3 years) the medium term (3 to
5 years) and the longer-term (5 years plus), in alignment with our wider risk management procedures and financial planning.
These risks and opportunities pose different challenges to our business depending on how successful we are at mitigating
the impacts of physical climate change as a global society.
As can be seen, the overall risk and potential financial impact of climate change on AO increases with time. The short
term is affected by transitional risks, with physical risks becoming more impactful in the much longer term. Based on this
assessment, we believe that there is no immediate material financial risk or threat to our business model. Further, the areas
of highest potential impact are those which we are already taking action to address through our working groups.
Impact of
climate-related
risks and
opportunities
on our
businesses,
strategy,
and financial
planning
Our climate-related risk assessment and climate scenario analysis has provided the basis from which we can begin to
properly assess the impact of climate-related risks and opportunities on our business strategy and financial planning. In
the table on pages 39 to 41 we primarily focus on the qualitative impact of climate-related risks on our business. Whilst some
limited quantitative impacts have been given for the short to medium term, we expect to evolve our assessment over time
and intend to provide further detail in future reports, including more detail around the interdependencies of our climate-
related risks and opportunities and their ability to create value over time.
Resilience of
our strategies,
taking into
consideration
different
climate-related
scenarios,
including a
2°C or lower
scenario
During FY24, we carried out qualitative scenario analysis at temperature increases of 1.5°C and 4°C over the longer term
(i.e. to 2050), which aligns with the Government’s regulatory aspirations for net zero by 2050. Our analysis was carried out
internally based on our own research and by reference, in particular, to the Intergovernmental Panel on Climate Change (the
“IPCC”). As part of our enterprise risk management processes during the reporting period, we have, reassessed the scenario
analysis performed last year but do believe any material updates are warranted.
The IPCC have considered a spectrum of possible futures that differ in terms of the level of projected warming and society’s
ability to adapt to the changes ahead.
Orderly transition Hot house world
A scenario consistent with the Paris Agreement goal of
keeping global warming below 2°C at a c.1.5°C level.
• While this amount of warming increases the physical
risks to a degree, in particular, the frequency and
severity of extreme weather, more severe physical
climate impacts are avoided.
• This would involve the introduction of more stringent
climate policies and greater innovation and investment
in infrastructure by the businesses and governments,
meaning transitional risks are more notable.
• Carbon pricing is introduced in the 2020s and gradually
increases through the 2030s.
A scenario where global warming increases by > 4°C.
In this world, humanity doesn’t just fail to reverse its
emissions curve, it doubles down on fossil fuel extraction
and energy-intensive lifestyles. As nations dig up and burn
more and more coal throughout the century, the world
warms by 4.4°C. A 4°C temperature increase intensifies
the impacts seen at the 1.5°C degree scenario with severe
physical risks
• Severe physical risks are encountered
• Transitional risks are initially quite low as limited action
is taken and current policies remain in place
As can be seen from the table on pages 39 to 41 the overall risk and estimated* potential financial impact of climate change
on AO increases with time. The short term is affected by transitional risks, with physical risks becoming more impactful in
the much longer term. Based on this qualitative assessment, we believe that there is no immediate material financial risk
or threat to our business model; however, this conclusion may change once quantitative scenario analysis is undertaken.
Further, the areas of highest estimated potential impact are those which we are already taking action to address through
our working groups. The business strategy and model will need to evolve and we have started to think about mitigations.
Fundamentally, we still see that there will be a market for electrical products and physical delivery will still be necessary;
however, the method of delivery will be subject to change with evolving technologies, and the nature of products may change.
AO World PLC Annual Report and Accounts 2025 37
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Risk management
Our processes for
identifying and
assessing climate-
related risks
Risks are identified and assessed by each of the business units, as part of our integrated risk management processes,
which are maintained at a business unit level, with the support of the Risk and Audit team. Twice per year, business unit
risk registers are reviewed by the Risk and Audit team. Critical risks are recorded on the corporate risk register and are
subject to periodic review to determine whether the risks are being mitigated within risk appetite. Principal risks are
approved by the Board
Our processes
for managing
climate-related
risks
All risks are assigned a risk manager, to ensure that risk is properly controlled and mitigated, or where appropriate
tolerated, by the business unit. As with all risks, decisions taken against a particular risk will be scrutinised by the RMC
with any risks tolerated above our appetite threshold, discussed further with the Audit Committee and/or Board. Our
Risk and Audit team is supporting the business units to better identify and assess environmental risks to ensure these
are appropriately managed
How our processes
for identifying,
assessing and
managing
climate-related
risks are
integrated into our
risk management
Our business unit and corporate risk registers include ESG-related risks. Climate-related risks are subject to the same
assessment criteria as other risks, and these are classified as either short term (1–3 years), medium term (3–5 years)
and longer term (5+ years), in alignment with our wider risk management procedures and are subject to the same
assessment of likelihood and impact as discussed in our Risk Management section on pages 22 to 27.
Metrics and targets
Metrics used to
assess climate
related risks and
opportunities
We currently use our greenhouse gas emissions (in Scopes 1, 2 and 3) together with our carbon intensity ratio as
metrics to help us understand and manage climate-related risks. These emissions and ratios are reported on page 35.
Further in the context of recycling opportunities, we use metrics such as:
• the number of appliances received for recycling and reuse;
• the number of products put into reuse;
• tonnage of packaging recycled;
• tonnage of plastics recycled; and
• Number of used consumer tech resold or rented.
Scope 1, 2 and 3
GHG emissions and
related risks
AO reports on all of the greenhouse gas (“GHG”) emission sources as required pursuant to The Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, which implement the
Government’s policy on Streamlined Energy and Carbon Reporting. The methodology used to calculate our GHG
emissions and energy use is the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) and
ISO 14064. Our carbon footprint is calculated by estimating the individual greenhouse gases that result from AO’s
activities, converted into a carbon dioxide equivalent (tCO
2
e). In FY23, we partnered with an expert third party, Green
Jam, to calculate our Scope 1, 2 and 3 emissions for the year ended 31 March 2023 and for our UK-only Group which we
are using as our baseline for future targets. We have repeated our calculations in all 3 scopes for the year under review
and these are shown in the following section. Risks related to these emissions are set out on pages 39 to 41 above, with
the main medium-term risk relating to carbon pricing.
Targets used to
manage climate-
related risks and
opportunities
and performance
against targets
We are aligned to the Government’s target of net zero by 2050. In meeting this aim, we intend to set our own interim
science-based targets across our Scope 1 and 2 emissions in the medium term once we have a better view of the
technology and infrastructure required to fully decarbonise the fleet and our longer term energy requirements.
In the short term, we are targeting a reduction of Scope 1 emissions through our logistics programmes, which centre
around the use of CNG for trunking, improving vehicle capacity through use of the new LSTs and better home delivery
boxes and using enhanced telematic solutions to drive most efficiently. We are targeting for all our heavy goods
vehicles to be CNG based (or lower carbon alternative depending on technology developments) by 2035.
In relation to our Scope 2 emissions, we are targeting the use of 100% renewable energy in our operations, although we
have recently taken a backwards step and reverted to non-renewable as the current market demand for renewable
has made prices soar and, therefore, too costly. Our focus is, therefore, driving down absolute reduction in energy
consumption per site, through the initiatives outlined on pages 33 to 35.
Performance against these targets is shown in the GHG emissions reported on page 35.
In terms of our opportunities, we have set qualitative targets to:
a. maximise the amount of e-waste collected from AO customers;
b. optimise product reuse; and
c. maximise the amount of plastics recycled.
Our Remuneration Committee has, again, considered climate-related targets in the context of Executive
compensation but given the uncertainty on the UK’s energy strategy, infrastructure and policy, it has not
incorporated climate-related metrics in its incentive schemes to date.
Task force on climate-related financial
disclosures (“TCFD”)
continued
AO World PLC Annual Report and Accounts 202538
Opportunities
TCFD
category
Description
of impact
Timeframe Mitigation
strategy
Increase brand
awareness and
reputation by
demonstrating our
recycling capabilities
and circular
economy strategy
Transition
opportunity
(Reputation)
Increased sales
and lower costs of
acquisition
We are increasing our
communications to customers, as
well as continuing to develop the
communication of our strategy
and achievements to all our
stakeholders. In the year ahead,
we are expanding our existing
plastics refining facility to include
an in-house extrusion process
following which recycled material
can be used more easily in new
products as part of our circular
economy strategy. There is
opportunity to expand our “reuse”
operations, particularly in the
consumer tech space, following
our acquisition of musicMagpie
Extended Producer
Responsibility
Transition
opportunity
(Policy and
Legal)
Increased sales (and
profits); lower cost
of compliance
£
With our own reuse and recycling
facilities and in-house logistics
we can manage free take back
efficiently for both products
our retail entity sells but also
for third parties. We continue to
consider expanding or building a
further recycling site to grow our
recycling capabilities.
Diversification of our
product ranges and
product categories,
e.g. an increase in
heatwaves leading
to increased demand
for air conditioning
technology (Retail).
Transition
opportunity
(Market)
Increased ranges
and sales
We continue to build relationships
with suppliers in such categories
whilst monitoring market trends
and consumer behaviour.
Climate-related Risks and Opportunities
Estimated Financial Impact – Without Detailed Quantitative Modelling
£ £ £ – Significant impact on Group £ £ – Moderate impact on Group £ – Limited impact on Group
Key
Short timescale Medium timescale Longer timescale
AO World PLC Annual Report and Accounts 2025 39
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Climate-related Risks and Opportunities continued
Transitional Risk TCFD
category
Description
of impact
Time Frame
of impact
Mitigation
strategy
Extended
Producer
Responsibility
Transition
risk (Policy
and Legal)
Increasing regulatory
drivers for retailers to take
responsibility for WEEE take-
back and packaging, which
could increase operational
complexity and costs (Retail,
Logistics and Recycling).
£
With our own recycling
facility and in-house logistics,
we can manage free take
back efficiently. We are
considering building a further
recycling site to expand our
recycling capabilities (see
opportunities below).
Rights to
Repair
Transition
risk (Policy
and Legal)
Increasing regulatory drivers
for retailers to sell products
that are capable of easy repair,
which could reduce sales of
new products and costs (Retail,
Logistics and Recycling).
£
Reuse operations provide
ability for products to have
a second life.
Opportunity for us to expand
our product offering to include
associated parts.
Reputational
damage
Transition risk
(Customer
Reputation)
Failing to meet the demands of
an increasingly environmentally
conscious customer base could
impact reputation and result
in a reduction of sales and
market share. Regulatory risk of
“greenwashing” leads to loss of
trust (Retail).
£
Use our market insights to
respond to consumer interests
and respond quickly to shifts
in consumer demands. Work
closely with our suppliers to
understand the environmental
impact of their products. Focus
on building brand awareness
of in-house recycling and
rework capabilities.
Fleet
transformation
Transition
risk (Market)
Increased cost of transitioning
to non-fossil fuel-based fleet
and/or that technologies
selected initially could become
sub-optimal.
Risk that the location and/or
infrastructure at our sites is not
suitable to meet the needs of
new technologies (Logistics).
££
Use of CNG in trunking, as an
interim measure. Use of LSTs
should reduce the number of
trunking vehicles required. Trial
alternative low-carbon fuels (EVs
and/or Hydrogen).
Site planning (e.g. the viability of
solar panels, distance from sub-
stations and pipe infrastructure)
when renewing leases at our
existing sites or planning for
new ones.
Carbon pricing
and legislation
Transition
risk (Policy
and Legal)
Governments may impose a
carbon tax, a requirement to
buy and sell carbon permits,
mandatory carbon offset
programmes, sector-specific
carbon taxes affecting
electrical product, and
increased emissions reporting
and disclosures.
£
Fleet transformation
Reduced energy consumption
Product emissions programme
Estimated Financial Impact – Without Detailed Quantitative Modelling
£ £ £ – Significant impact on Group £ £ – Moderate impact on Group £ – Limited impact on Group
Key
Short timescale Medium timescale Longer timescale
AO World PLC Annual Report and Accounts 202540
Physical
Risk
TCFD
category
Description of impact –
orderly transition
Description of impact –
hot house world
Mitigation
strategy
Physical
risks
impacting
our supply
chain
Physical risks
(Acute and
Chronic)
Risk around our suppliers’
ability to source raw
materials for products,
transport disruption,
adapting warehousing
space and increasing our
inventories, and potential
supplier failure.
££
Further scarcity/quality
of raw materials, severe
transportation problems
and warehousing
availability and storage
challenges.
Investment in emergency
supply chain planning
and contingency would
be required and we
could face a period of
business disruption. In
certain geographical
locations, there could be
water scarcity affecting
manufacturer production.
£££
Increased supply
chain planning and
risk modelling may be
required to minimise
disruption and ensure
sufficient customer
availability.
Physical
risks
impacting
our site (e.g.
increased
frequency
of power
outages,
flood risks,
heatwaves)
Physical risks
(Acute and
Chronic)
Cost increase through
building adaption measures.
It could be expected that
there would be an expansion
of low-emission zones that
may restrict certain vehicles
from entering or toll charges
may be applied.
Additionally, increasingly
unpredictable weather
events, such as floods and
high winds, may impact
our buildings, and our
assets held within, and
power outages, therefore,
increasing costs and
reducing service levels.
£
Sea level rise would be
more pronounced and
lead to increased scarcity
of commercial land
availability; potential
for migration of people
that may affect delivery
efficiency.
Potential damage to
buildings and increased
maintenance can
be expected with
unpredictable and extreme
weather activity.
There could also be
reduced water availability
or issues with drainage for
commercial sites due to
potential scarcity.
Heat waves could affect the
well-being of our people –
distribution sites would need
to be properly cooled. ££
Buildings may need to
be adapted or retrofit
for climate change
or energy-efficiency
purposes.
Location of sites to be
considered taking into
account long-term view
of weather impacts (e.g.
coastal areas) and also
access to energy.
Physical
risks
impacting
our ability to
deliver
Physical risks
(Acute and
Chronic)
Disruption caused by, e.g.
flood risk and heat waves or,
very cold events resulting in
national road infrastructure
problems. If drops per
route decrease as a result
of such physical issues,
profits would fall (and sales
could be affected if delivery
capacity is affected).
£
Disruption to infrastructure
such as roads and bridges
£££
Heat waves could affect
the well being of our people
to deliver – vehicles would
all need to be fitted with
aircon and drop numbers
may need to be reduced to
address health and safety
concerns.
£
Potential relocation of
sites to better support
network.
AO World PLC Annual Report and Accounts 2025 41
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Fair, equal and responsible
2
Our AOers are the foundation of our business,
and their dedication, innovation and ambition
contribute to our success and sustainability. We
believe that happy people care more and do the
right thing. So, we make sure they are happy by
giving them autonomy where appropriate, support
where needed and a great and a safe working
environment, in which they are treated fairly
and with respect. They are empowered, they are
incentivised and they know they are trusted. We love
watching them grow and thrive. We aim to recruit
and retain the best talent and look for people
who live our values. They care not only about our
customers but other AOers, our suppliers and, of
course, they do it all with a sense of fun.
Culture and engagement
We regard our internal culture as a fundamental
driver of our success, and invest accordingly to
nurture it. Enabling AO and its people to be the
best versions of themselves and to maximise their
performance potential underpins our AO “Let’s Go”
culture and is how we deliver for our customers.
Our exceptional 4.9 Trustpilot rating and strong
engagement index results don’t happen by
accident; they are the result of how our culture
enables AOers to relentlessly strive for a better way.
Our ambition is to be a business that:
• Inspires its people through great leadership,
creating trust and accountability to deliver
exceptional results
• Enables our people to collaborate and innovate,
supported by the right information and tools to
do their job
• Empowers people to thrive by creating an
inclusive environment where people feel they
belong and can be their true selves.
To ensure there is a broad awareness and
understanding of business-wide performance, and
the financial and economic factors affecting AO,
we hold a monthly “State of the Nation” led by our
CEO who provides a business update with separate
live Q&A sessions. There are also monthly meetings
with senior management, from which we provide a
structured cascade so that all AOers hear the latest
messages from their senior manager. We also use a
number of internal social media channels, such as
Yammer and YouTube, to ensure all AOers are kept
up to date with the latest news and developments
across the Group and to enable two-way
conversations between AOers across the business.
To support our engagement strategy, we use a
variety of ways to engage with AOers to understand
what matters to them. Our Always Listening
strategy, with employee listening groups and
engagement surveys, allows us to measure our
engagement, perform culture health checks and be
proactive in developing future people initiatives.
Three employee surveys have been conducted in-
house during FY25, which assessed our Engagement
Index Score (based on six key indicators of
happiness, commitment and effort, loyalty and
retention, belonging, meaningful work and growth).
The first was conducted in June 2024, which resulted
in a score of 82, the second in September 2024
which resulted in a score of 81 and a third in January
2025 which gave a score of 80. The average of these
3 scores is 81, which translates as engagement at
AO is regarded as Very Good. Importantly, we are
also seeing a good response rate with c.83% of all
AOers (2,123 people) participating in our most recent
engagement survey. Recently, we were also named
as a top 200 UK best employer following a survey
carried out by the Financial Times and Statista
following an anonymous survey of employees to
find the top 500 companies.
We use the results from our engagement surveys,
employee forums and external metrics, such as
Glassdoor, to take action to improve the people
experience. This insight allows us to work to increase
our engagement scores as well as other identified
priority areas that need to be addressed so that we
can focus on local and Group-level actions.
Chris Hopkinson, a Non-Executive Director, is our
People Champion and has Board responsibility for
our engagement initiatives and leading employee
forums. Chris reports back to the Board and this,
along with our regular People updates, allows the
Board to assess and monitor culture. It will be key to
ensure our culture translates to, and is maintained
in, our offshore outsourced areas.
Reward and well-being
We believe that a fair and attractive reward
package makes an important contribution to both
employee engagement and the attractiveness of
AO as a place to work.
April 2025 sees a return to a performance-related
approach to the annual pay award in conjunction
with a cost-of-living award for everyone (at
2% minimum), responding to both the settling
economic environment and the feedback within our
engagement surveys that AOers value recognition.
In addition to the increased National Minimum
Wage rates, increased Employer National Insurance
contributions, and a reduced threshold for those
contributions, the impact to the Group will be
c.£8.5m per annum on a like-for-like basis.
AOers have access to digital GP services, flu jabs
and free eye tests and have employee assistance
programme access, which includes confidential
counselling, financial well-being support and
pension workshops. Manager training workshops
have been delivered in FY25 to develop skills and
confidence in supporting people with mental
health challenges and managing sickness absence.
A pro-active women’s health group has been
established with AOer champions volunteering to
further support managers and AOers from a lived
experience perspective to develop better and more
meaningful reasonable adjustments. In 2024, we
introduced a Women’s Health policy and were proud
to partner with Endometriosis UK, reinforcing our
AO World PLC Annual Report and Accounts 202542
commitment to understanding endometriosis and supporting
AOers affected by it. Through this initiative, we have trained
dedicated champions within our Women’s Health support
group to offer meaningful support, guidance and advocacy
for those living with the condition.
We’ve continued to give AOers the flexibility to have a work–life
balance that works for them by offering automatic holiday
carry over of up to 5 days, extra unlimited holiday buying and
flexible bank holidays where AOers can request to “swap” up
to three bank holidays for days that are more meaningful
for them.
We have developed a clear strategy to improve the overall
well-being benefits of AOers by focusing on four key aspects:
mind, body, financial and social. In FY25, we launched Total
Reward Statements to enable AOers to understand the full
value of their pay and benefits, influencing AOers to take
advantage of benefits they may be underutilising through
flexible benefits, holiday buy scheme, pension workshops,
healthcare cash plans and bonus sacrifice.
We offer an annual Sharesave (SAYE) scheme to all
employees, providing them with the opportunity to purchase
ordinary shares in the Company. This helps to encourage
employee interest in the performance of the Group. Further,
during the year, we continued to grant awards under our
restructured Value Creation Plan, which gives all AOers an
opportunity to share in the value created by the Company
over the next five years.
Talent
We need to attract, develop and retain the best Talent.
Our engagement and culture form a key part of that, but
as we look to deliver on our medium-term strategy, we need
to ensure we have defined and mapped our capabilities
(addressing any gaps) and allow our people to develop
and grow in line with the business’s needs, nurturing a
growth mindset.
Attract: We continued to evolve our people proposition in
line with our work from work strategy, to give candidates a
compelling reason to join and remain at AO as they develop a
fulfilling career. Our “Hiring The AO Way” ensures hiring teams
remain focused on hiring for high performance and potential,
with our attraction and selection processes underpinned by
AO’s values and a great candidate experience. This enables us
to design a focused and robust selection programme to raise
the bar for all senior hires, with candidates meeting with either
the CFO or CEO as a final stage to the selection process.
Develop: Our priorities this year have surrounded: (i) building
high performing teams; (ii) ensuring high-calibre leadership;
and (iii) providing personal and career development for all.
Priority What we’ve done
High-performing teams High
Performing Teams
• Strengthen capabilities.
• Maintain a high-performance culture
across all teams, led by local managers,
living AO values.
• Established AO Leadership skills framework, a consensus of what great
leadership looks like at AO, we are clear on current performance and
potential of our leadership teams, and on our approach to succession.
• Senior leaders have updated their level 1 value chains and capabilities.
• Managers trained and competent in performance management skills to
create and lead high-performing teams.
• Guidance for managers and AOers on how to have difficult conversations,
and where to find the right support.
High-calibre leadership
• Ensure our leaders and aspiring leaders
have the skills they need to be the point of
difference at AO, recognising their needs
and making sure they are motivated and
rewarded for their leadership roles.
• Look at the way we are organised, how we
are structured and where and how we carry
out our work to ensure we optimise our
efficiency and effectiveness.
• Individual leadership development.
• Leader-led change programmes/projects to enhance capability,
performance and well-being.
• Manager development through our licence-to-manage programme.
Career development for all
• Provide first-class personal and career
development for all
• Invest in the development of knowledge,
skills and experience to enable AOers to
have rewarding and progressive careers.
• Introduce graduate career pathways.
• Apprenticeship levy to provide breadth of learning: In the past year, we have
invested over £500,000 of levy funds into the development opportunities
of our teams. Our apprenticeship programmes have expanded by 50%
and we’ve seen a rise in engagement from our Tech teams. During National
Apprenticeship Week, we celebrated 42 AOers successfully completing their
qualifications since March 2024.
• STAR programme. Future Leader/Emerging Talent programme.
• AO Play – our digital learning platform offering bite-sized, industry-expert-led
videos and podcasts.
• Learning-at-work week saw 500+ AOers participate in hosted internal and
external webinars and learning-related games, with AO Leaders stepping up
to deliver awareness sessions for AOers to learn more about our business.
AO World PLC Annual Report and Accounts 2025 43
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Fair, equal and responsible continued
2
Retain: It is pleasing to end the year meeting
our targets for voluntary turnover and labour
stability. These have been met by our focus on
engagement and culture, reward and well-being,
and development.
Over the next year, we will continue to raise
the bar in the quality of new hires and focus on
high-performance and career development for all
to ensure that our people are set up for personal
and business success.
Equity, diversity and inclusion
(“EDI”)
We are proud of AO’s inclusive environment in which
everyone can succeed, grow their career and be
rewarded for their efforts. There is no doubt that,
as well as being simply the right thing to do, this
diversity of thought and contribution can make
AO a better business for our customers and all
stakeholders. This is reflected in our EDI statement:
“AO is for everyone. We should all feel that we
belong. That’s why we are creating a welcoming and
inclusive place to work.”
During the year, we have continued to collate Group-
wide diversity data and, as result, we now hold DE&I
data for 80% of all AOers, up from 75% a year ago.
The data enables us to design initiatives that deliver
real change to diversity, equity and inclusion at AO.
We have continued to raise awareness of and
celebrate diversity through a variety of initiatives
at a local level, enabling AOers to contribute to
shaping our inclusive culture and feel safe to share
their personal stories and experiences. We have
also reignited our inclusion focus groups to actively
listen to feedback and enlist peer to peer support
to improve the experience for current and future AO.
The groups offer support to each other and provide
feedback on areas of change and improvements,
contributing to progressive policies and approaches
that support Women at AO, Neurodivergent AOers,
People with Faith and Beliefs and our LGBTQ+
community. We’ve continued to support LGBTQ+
initiatives through our Out-Loud Community,
participating in Bolton Pride and Crewe Pride and
created a new focus group for Religion and Belief to
look at how we can make AO a more welcoming place
for people who follow/practise a religion.
We celebrated international women’s day with a
week’s programme of events, including leadership
workshops, confidence building and inspirational
talks from Sarah Venning (NED and Global Chief
Digital & Data Officer for Merlin Entertainment) and
Namrata Sarmah (founder and CEO of Women in
Product UK and Non-Executive Director for the Open
University Business School). We’ve also continued
with our women in leadership programme aimed
at providing support to women to develop their
careers to hopefully drive an increase in female
representation at more senior levels, with quarterly
networking events and sponsoring 20 women
to attend the “Actually She Can” conference,
a leadership event designed to empower women to
invest in themselves.
Our aim with these priorities is to engage all
and prospective AOers to build a fully inclusive
environment in which people feel safe, respected,
included and themselves.
We have introduced the AO Health Passport, which
ensures that all AOers have a simple process
to openly discuss any potential reasonable
adjustment needs with their manager. These
adjustments could be for new AOers ensuring
their joining experience meets their needs, or for
existing AOers covering long-term or temporary
adjustments. The Health Passport is for managers
to document details of any reasonable adjustments
they have agreed and/or support that is needed by
the team member. AOers hold their own copy of the
passport and can easily and discretely share this
with others as they feel it is necessary, i.e. with a new
manager, or when additional support is needed, for
example, to attend meetings, interviews or help with
aspects of their job or learning events, making sure
the AOer gets the agreed help and support when
they need it. We’re proud of this step to continue
making AO an inclusive, accessible and supportive
place to work.
Gender representation and
gender pay gap
AO’s 2025 Gender Pay Gap Report highlighted that
our overall gender pay gap (as at the snapshot date
of 5 April 2024) is 5% on both a mean and median
basis (significantly below the ONS average of 13.1%).
However, our gender pay gaps (on a median basis)
and at individual entity level are generally higher,
ranging from 5% in Recycling to c.33% in AO World –
the listed Company. Here, the gap is predominantly
due to the stronger representation of men at
more senior levels and, to some degree, because
of industry-led higher pay in male-dominated
Tech roles. In terms of gender representation, our
Logistics and Recycling businesses are, typically,
male dominated, with only 20% and 16% female
representation, respectively, as at the snapshot
date. Retail and enabling functions have c.48% and
39% female representation.
As at 31 March 2025, our Senior Leadership team
(i.e. the direct reports to our two Executive Directors)
was 33% (FY24: 36% female) with the decrease
being due to adding musicMagpie’s (male) CEO to
our leadership team. The number of female AOers
across the whole business was 32% (FY24: 32%).
Our latest Gender Pay Gap Report, with a snapshot
date of 5 April 2024, can be found at https://www.
ao-world.com/wp-content/uploads/2025/03/
Gender-Pay-Gap-2025-FINAL-v2.pdf. Please see the
statement for the work we’ve done and are still doing
to drive down the gaps in gender representation and
gender pay.
AO World PLC Annual Report and Accounts 202544
Ethnicity
We currently do not report on ethnicity representation across our workforce, but, as noted above, we now have better data from
AOers to understand ethnic backgrounds for the majority of AOers and our ethnicity pay gap. We will continue to promote the
benefits of holding diversity data with a view to improving even further, to be able to better understand the backgrounds of our
teams and devise an appropriate strategy to become more ethnically diverse.
Listing Rules diversity disclosures
In accordance with Listing Rule 9.8.6(R)10, annex 2, we set out our Board diversity data
1
as at 31 March 2025 below:
Gender:
Number
of Board
members
Percentage of
the Board
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
2
Number in
Executive
management
Percentage
of Executive
management
Men 6 85.7% 3 2 100%
Women 1 14.3% 0 0 0%
Other categories 0 0 0 0 0
Not specified/prefer not to say 0 0 0 0 0
Ethnicity:
Number
of Board
members
Percentage
of the Board
Number of senior
positions on the Board
(CEO, CFO, SID and Chair)
2
Number in
Executive
management
Percentage
of Executive
management
White British or other white
(including minority-white groups)
7 100% 3 2 100%
Mixed/multiple ethnic groups 0 0% 0 0 0%
Asian/Asian British 0 0% 0 0 0%
Black/African/Caribbean/
Black British
0 0% 0 0 0%
Other ethnic group, including Arab 0 0% 0 0 0%
Not specified/ prefer not to say 0 0% 0 0%
1
Data has been collected by a survey of the Board, conducted by the Company Secretary.
2
The position of SID is currently vacant.
As can be seen in the above tables, AO has not met any of the FCA’s targets on Board diversity: we have not met the target
of 40% of the Board being women, none of the Board’s senior positions are held by women and none of the Board are from
an ethnic minority background. As described elsewhere in the Annual Report, the Directors recognise the FCA’s diversity
targets and remain supportive of the recommendations of the Parker and Hampton-Alexander reviews; they are committed
to increasing female and ethnic representation on the Board and throughout the wider organisation, as they believe that the
business should have a culture that truly accepts diversity of thought, equity and inclusion.
In conducting its search for new Non-Executive Directors, we have in the past, and will continue in the future, to specifically
highlight to our search partner that increasing the diversity of the Board, in all aspects, is an important consideration with
these appointments and will have diversity requirements for candidate shortlists with a view to increasing female and ethnically
diverse representation. Most importantly, however, we will only appoint candidates who we judge can contribute strongly to the
Board’s experience and skillset. This will continue to be the Board’s approach in making any new appointments.
Disabled people
Disabled people have equal opportunities when applying for positions at AO and we ensure they are treated fairly. Procedures
are in place to ensure that disabled AOers are also treated fairly in respect of career development. Should an AOer become
disabled during their course of employment with the Group, we would seek, whenever practical, to ensure they could remain as
part of our team.
AO World PLC Annual Report and Accounts 2025 45
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
Fair, equal and responsible continued
2
Equal opportunities
AO is committed to maintaining good practice
in relation to equal opportunities and reviews its
policies on a regular basis in line with legislative
changes and best-practice benchmarking. It is
Company policy that no individual (including job
applicants) is discriminated against, directly or
indirectly, on the grounds of colour, race, ethnic
or national origins, sexual orientation or gender,
marital status, disability, religion or belief, being part
time or on the grounds of age or, frankly, anything
else. Our inclusion policy underpins our talent
attraction and recruitment process. Once people
join AO, we aim to ensure that: working practices,
career progression and promotion opportunities
are free from discrimination or bias, and AOers
are aware of their own personal responsibility in
ensuring the support of the policy in practice.
In the opinion of the Directors, our equal
opportunities policies are effective and adhered to.
We have put an inclusion lens over our leadership
pipeline and succession process and have built
inclusive practices into our leadership programmes.
This is coupled with comprehensive inclusion
learning content on our learning hub for all AOers.
Health and safety
At AO, we are committed to maintaining a safe
working environment for all our employees and
customers. We drive a culture aimed at continuous
improvement whilst maintaining consistently
high standards. Health, safety and well-being is
always on the agenda at AO and we have multiple
structured ways of communicating health and
safety throughout the Group.
We deliver a thorough inspection schedule to
ensure that all our departments and premises
are managing risk to a good standard. We use the
inspections and a range of KPIs to monitor the
performance in each business unit.
This year, we have met our objective of achieving
the RoSPA gold award in both the Logistics
and Recycling business units. This is further
complimented by the ISO45001 management
system in Recycling. We have also rolled out our new
“red team exercises” across Logistics and Recycling.
We ran several exercises with over 100 managers
and supervisors to test our control measures
and resilience to a high-risk scenario. We have
used the learnings from this to further strengthen
our controls.
One of our main aims this year has been to grow
the risk ownership model with our operational
management. We have delivered multiple initiatives
to develop and empower our managers to take
further ownership of risk in their areas.
Our health and safety principles are built on:
• Regularly updates to the Board on health and
safety performance;
• Providing all stakeholders with support to manage
risk in their departments;
• Inspecting each operational area of the business
on a risk-based frequency ;
• Assessing risks to the business and our people,
providing measures to control these risks;
• Providing adequate information, instruction
and training to all people working on behalf of
the business;
• Investigating all workforce incidents with the aim
of preventing a reoccurrence; and
• Continuing to drive performance against the
standards set out in the ISO45001 management
system and RoSPA criteria.
AO World PLC Annual Report and Accounts 202546
Ethical practices and resilient
supply chains
Our Modern Slavery statement for the year-ended
31 March 2024 was published during the year
and can be found at https://www.ao-world.com/
responsibility.
During the year, we have continued to drive our
working group to better monitor modern slavery
risks and other ethical supply chain risks and
to share ideas and practices. We have further
enhanced our procurement processes through
implementing a contract management system that
ensures colleagues are onboarding suppliers in a
more governed way and undertaking appropriate
due diligence checks.
We also have in place a formal anti-bribery
policy and whistleblowing procedures. Our
whistleblowing procedures allow our people to
raise any issues of impropriety in confidence.
As noted in the governance section, we have
undertaken an assessment of these procedures
during the year and are confident these continue to
work effectively.
Following the implementation of the FCA’s
Consumer Duty rules last year, we analysed our
practices and those of our partners to ensure that
we meet or go beyond the required standards. Our
CEO, John Roberts, was appointed as our Consumer
Champion ensuring we that treat every customer
like our gran, and that we are delivering good
outcomes and acting in good faith for consumers
when we look at the types of financial products
and services we promote and the price and value of
them. We continue to run monthly financial services
governance meetings ensuring we fulfil our legal
obligations and are treating customers fairly.
Our policies, including cybersecurity, GDPR, modern
slavery, anti-bribery and treating customers fairly
are supported through stakeholder training with
employee modules included in our online employee
learning hub, which helps to ensure that these
principles are fully understood and are at the
forefront of minds.
Board independence, diversity and
Executive remuneration
Our Corporate Governance Report sets out
further details of our governance around
Board independence and diversity and
Executive remuneration.
Risk management
Details of our risk management practices can be
found on pages 22 to 27.
Tax strategy
As part of our Group strategy, we believe in doing
what is right and fair. Our tax strategy seeks to serve
the overall Group strategy, in order to minimise
risk and uncertainty and to provide a stable tax
environment to support the business in achieving
this. We will continue to review the tax strategy to
ensure that the two are aligned on a regular basis.
Our key objectives include, managing our tax
affairs responsibly with integrity and transparency,
paying the right amount of tax at the right time and
complying will all applicable tax filing obligations in
a timely manner.
A copy of our current tax strategy can be found
at on our corporate website at ao-world.com/
responsibility.
Data protection and cyber security
As an online retailer serving millions of customers,
protecting their data, and ensuring safe online
shopping, is critical to our business. We have data
protection and information and cyber security
teams, which set out our policies in this area and
support stakeholder training with employee
modules included in our online employee learning
hub – helping to ensure that the GDPR principles
are fully understood and at the forefront of our
minds. The Data Protection and Security Committee
meets quarterly to oversee our data protection
and information security strategy, assess risk
and monitor market developments. We continue
to invest in this area, particularly in relation to
information security and have seen progression of
number of initiatives to reduce our risk in this area.
Community and charity
Supporting our community and charitable causes is
massively important at AO, led from the top with our
CEO’s well-publicised support for restoring funding
for youth services matched by private philanthropy.
Our corporate sponsorship programme, therefore,
centres on supporting young people to thrive, with
a particular focus on sports programmes which
can help improve both physical and mental health
and help address loneliness. All our AOers are
encouraged to do their bit for our wider society, but
we try not to be prescriptive on this and urge them
to support causes close to their hearts.
During the year, we have been involved in the
following initiatives:
• Continued sponsorship of Manchester Thunder,
one of the country’s leading netball teams, raising
awareness of the sport in general and the team’s
journey to professionalism.
• Continued with our grass roots sponsorship
programme through which we’ve pledged funds
for sports kits for a hundred UK grass roots youth
teams, including ones our mini AOers are part of.
• Continued sponsorship of Jacksonville Jaguars
Jag Tag Programme, which will being American
football to around 300 UK schools.
• Continued our sponsorship of BLGC, Altrincham
Football Club and Lancashire County Cricket
Club Youth Medical team.
Fit for the future
3
AO World PLC Annual Report and Accounts 2025 47
Our Financials Shareholder InformationOur GovernanceOverview
Strategic Report
The AO Smile Foundation continues to make a
positive contribution to the wider community. When
AOers raise money for a charity close to their hearts,
AO Smile boosts the money raised by up to 50%.
In FY25, AOers raised almost £50k for charities
across the UK, which was boosted by £22k by the
Smile Foundation.
These include Alder Hey Children’s Hospital,
Cash4Kids, Cheshire Buddies, Alzheimers Society,
Wildlife Trust, Prostate Cancer UK, Macmillan
Cancer Support and the National Autistic Society.
We continue to offer two paid Make a Difference
(“MAD”) days to every AOer, encouraging AOers to
support their local communities and the causes
that matter to them. Since April 2024, 22 good
causes have benefited from MAD days, which have
involved 167 AOers donating 1,336 hours of their time.
The AO Smile Foundation has the potential to
be a massive driver of engagement and brand.
During FY25, we put more focus onto Smile in
internal communications, which saw almost 200
AOers chose to donate via payroll giving to Smile,
and engagement with boosts and MAD days has
increased take up by c.20% and c.10%, respectively.
We’ll continue to promote engaging with Smile
through FY26, including involving our engagement
champions across the business with a particular
emphasis on increasing MAD days taken.
Further, given our current cash position, we’re
continuing to match employees’ payroll giving
donations with AO World donations (aggregate
employee payroll giving donations amounted to
c.£24k this year). We also regularly make product
donations to worthy causes.
During FY25, AOers based in Crewe voted to support
a new OnSide Youth Zone called The Dome, which
is close to our logistics hub, and AO became a
Founder Patron which is a four year commitment
of £25k p.a. A committee of AOer volunteers are
actively involved in developing a programme of
activity with the Dome, including mentoring, staff
engagement and site visits for over-16s preparing to
enter work.
Our musicMagpie colleagues also engage in
volunteering, city partnership and support local
charities. During the year, musicMagpie has raised
donations for Sign Post for cares and has allowed us
of the Hazel Grove warehouse for Kids Xmas Mission.
“Please extend our warmest thanks to everyone in
AO Smile Foundation who played a part in making
this thoughtful gift possible. The money you raised
together will help us continue our life-saving work
and give people more moments with the people
they love.”
Cancer Research UK in response to £550 donation
raised by an AOer, which was boosted by £225 from
Smile Foundation.
Non-financial and sustainability
information statement
The table below constitutes AO’s non-financial and
sustainability information statement, produced
to comply with Sections 414CA and 414CB of the
Companies Act 2006, and with the requirements
of the Non-Financial Reporting Directive. The
information set out below is incorporated
by reference.
Reporting requirement
Policies and standards
that govern our approach
Information necessary to understand
our business and its impact, policy due
diligence and outcomes
Environmental Environmental policy Sustainable living, pages 32 to 35
SECR/GHG emissions, page 35
Employees Group employee handbook, Whistleblowing
policy, Health and safety policy and Equal
opportunities policy
Our culture, page 42
Fair, equal and responsible, pages 42 to 46
Social matters Modern slavery policy
Data protection policy
Fit for the Future, pages 47 to 48
Human rights Modern slavery policy
Code of conduct
Anti-corruption and bribery Anti-bribery policy
Principal risks and impact on the business Risk Report, pages 22 to 26
Description of business model Our business model, pages 04 and 05
Non-financial KPIs KPIs, page 02
Climate-related financial disclosures TCFD, pages 36 to 38
Our policies and procedures are available on our
corporate website or from our Company Secretary
on request.
The Company’s Strategic Report is set out on
pages 02 to 48 and was approved by the Board on
17 June 2025 and signed on its behalf by:
Julie Finnemore
Company Secretary
17 June 2025
Fit for the future continued
3
AO World PLC Annual Report and Accounts 202548
Our
Governance
I truly believe that AO should be the customer
service blueprint to all businesses.”
AO Customer review
Our Governance
Governance at a glance 50
AO’s compliance with the 2018
Corporate Governance Code
(the “Code”) 51
Board of Directors 52
Corporate Governance Report 54
Nomination Committee Report 62
Audit Committee Report 65
Directors’ Remuneration Report 71
Directors’ Report 94
Statement of Directors’
responsibilities in respect
of the Annual Report and
the financial statements 99
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
AO Word PLC Annua Report and Accounts 2025 49
Board Tenure (In years)
The Board’s composition is reviewed regularly with a view to ensuring a
diverse mix of backgrounds, skills, knowledge and experience as well as deep
expertise in retail and customer focus and technology.
Board Role and Independence
1 Chair (Independent on
appointment)
2 Executive Directors
3 Independent NEDs
1 Non-independent NED (Chris
Hopkinson is considered non-
independent in respect of his
Board tenure only)
Female 14%
Male 86%
Board Gender
Board meeting attendance
The table below summarises the attendance of the Directors
during the year-ended 31 March 2025.
Director
Meetings
eligible to
attend
Geoff Cooper 8/8
John Roberts 8/8
Mark Higgins 8/8
Chris Hopkinson 8/8
Shaun McCabe 8/8
Peter Pritchard 8/8
Sarah Venning* 7/8
* An ad hoc meeting was held at short notice in August 2024, to discuss
progress on the acquisition of musicMagpie PLC. Sarah Venning was unable
to attend this meeting due to pre-arranged commitments relating to her
executive role with Merlin
Skills matrix
Geoff
Cooper
John
Roberts
Mark
Higgins
Chris
Hopkinson
Peter
Pritchard
Shaun
McCabe
Sarah
Venning
Retail/customer-focused business
experience
Digital experience
Finance and accounting
International experience
Functional experience in
management and operations
Marketing
Strategy
Public company governance
Governance at a glance
JR, CH and MH = 9+ years
GC and SM = 6-9 years
SV and PP = 1-3 years
AO World PLC Annual Report and Accounts 202550
The Board was monitoring the updates made to the 2018
Code in January 2024, but readers should note that the
updates apply to financial years beginning on or after
1 January 2025. Therefore, this Corporate Governance
Statement (“Statement”), together with the rest of the
Corporate Governance Report, explains key features of the
Company’s governance structure and how it has applied
the principles set out in the 2018 Code during the reporting
period (the period that began on 1 April 2024). The Financial
Reporting Council is responsible for the publication and
periodic review of the Code. The Code and associated
guidance are available on the Financial Reporting Council’s
website at frc.org.uk.
This Statement also includes items required by the Listing
Rules and the Disclosure Guidance and Transparency Rules,
save that the disclosures required by the Disclosure Guidance
and Transparency Rules DTR 7.2.6, regarding share capital,
are set out in the Directors’ Report on page 96. Disclosures
required by LR 9.8.6 relating to the Group’s diversity policy
are detailed in our Sustainability Report on pages 31 to 48
and in the Corporate Governance Report on pages 54 to 61.
Directors’ biographies and membership of Board Committees
are set out on pages 52 and 53.
The table below summarises how the Directors have applied
the principles of the Code during the year and where key
content can be found in the report. The Directors consider
that the Company has, throughout the period under review,
complied with the provisions of the Code, save that no
external evaluation of the effectiveness of the Board has
been conducted (a departure from provision 21), no Director
currently performs the role of “Senior Independent Director”
(provision 12) and the Chair’s tenure has been extended
beyond 9 years by agreement of the full Board (provision 19).
Please see pages 55 to 59 and 64 for detailed reasons why we
have departed from the Code in these areas.
The Directors confirm that, through the activities of the Audit
Committee described on pages 65 to 70, it has reviewed
the effectiveness of the Company’s risk management and
internal controls.
Selection of the Code Further information
Board leadership
and Company
purpose
(Principles A to E)
The Board’s role is to provide leadership
to the Company and to promote the long-
term sustainable success of the Company,
generating value for shareholders and
contributing to wider society. The Board sets
the Company’s values and standards, making
sure that they align with its strategic aims
and purpose.
Business model – pages 08 to 09
Risk management – pages 22 to 27
Board leadership and purpose – pages 54 and 61
Engagement – pages 28 to 30
People and culture – pages 11 and 29
Workforce engagement – pages 42 to 46
Division of
responsibilities
(Principles F to I)
There exists a clear division of responsibilities
between the Chair and the Chief Executive
Officer. The Chair’s primary role includes
ensuring the Board functions properly, that it
meets its obligations and responsibilities, and
that its organisation and mechanisms are in
place and are working effectively.
Governance framework – pages 54 to 61
Division of responsibilities – pages 55 and 56
Independence and time commitments – pages
59 and 64
Nomination Committee Report –pages 62 to 64
Composition,
succession
and evaluation
(Principles J to L)
The Nomination Committee is responsible for
regularly reviewing the composition of the
Board. It appraises the Directors and evaluates
the skills and characteristics required on
the Board.
Board effectiveness review – pages 57 and 58
Nomination Committee Report – pages 62 to 64
Board skills and experience – page 50 and
pages 52 to 53
Audit, risk and
internal control
(Principles M to O)
The Audit Committee plays a key role in
monitoring and evaluating our compliance
and risk management processes. It provides
independent oversight of our external auditors,
our internal controls framework and our
accounting policies. It also ensures the Board
Reports are fair, balanced and understandable.
Risk Management Report – pages 22 to 27
Audit Committee Report – pages 65 to 70
Remuneration
(Principles P to R)
The Remuneration Committee sets levels of
remuneration that are designed to promote
long-term, sustainable success and structures
remuneration to align management’s interests
with those of shareholders.
Remuneration Committee Report – pages
71 to 95
AO’s compliance with the 2018 Corporate
Governance Code (the “Code”)
AO World PLC Annual Report and Accounts 2025 51
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Board of Directors
Geoff Cooper
Non-Executive Chair
John Roberts
Founder and
Chief Executive
Officer
Mark Higgins
Group Chief
Financial Officer
and Chief Operating
Officer
Chris Hopkinson
Non-Executive
Director and People
Champion
Committee membership
N R
Appointment to
the Board
1 July 2016
Relevant skills
and experience
• Over 25 years’ UK
public company board
experience, including
chair and chief executive
officer roles
• Significant retail and
customer-facing
industry experience
across the UK
• Ability to steer boards
through high-growth
strategies and overseas
expansion
• Former non-executive
chair of Bourne Leisure
Holdings, Dunelm Group
PLC, Card Factory PLC
and Brakes Group, and
former chief executive
officer of Travis
Perkins PLC
Significant current
external appointments
None
Committee membership
None
Appointment to
the Board
2 August 2005 (AO Retail
Limited 19 April 2000)
Relevant skills
and experience
• Co-founded the business
over 20 years ago, giving
him thorough knowledge
and understanding of
the Group’s business
• Extensive CEO
experience: led the
management team to
successfully develop
and expand the business
during periods of
challenging market
conditions
• Innovator and
visionary lead
• Significant market
knowledge and
understanding
Significant current
external appointments
None
Committee membership
None
Appointment to
the Board
1 August 2015
Relevant skills
and experience
• Joined AO in 2011 as
Group Finance Director
• Appointed as Group
Chief Financial Officer
in 2015
• Appointed as Chief
Operating Officer in
2025, a role he performs
in conjunction with his
role as Group Chief
Financial Officer
• Previous senior finance
roles held at Enterprise
Managed Services
Limited and the
Caudwell Group
• Member of the
Chartered Institute
of Management
Accountants
Significant current
external appointments
None
Committee membership
N P
Appointment to
the Board
12 December 2005
Relevant skills
and experience
• Former City financial
analyst
• Significant industry
experience
• Holds a master’s degree
in Logistics
Significant current
external appointments
Executive Director of
Clifton Trade Bathrooms
Limited
Independent
No, due to length of
tenure only
AO World PLC Annual Report and Accounts 202552
Shaun McCabe
Non-Executive
Director
Peter Pritchard
Non-Executive
Director
Sarah Venning
Non-Executive
Director
Key
A
Audit Committee
N
Nomination Committee
R
Remuneration Committee
P
People Champion
Chair of Committee
Committee membership
R A
Appointment to
the Board
24 July 2018
Relevant skills
and experience
• ICAEW chartered
accountant with a
strong mix of knowledge
of consumer-focused
businesses and digital
expertise
• Significant international,
finance and general
management
experience
• Previous senior positions
held at several online
market leaders,
including Trainline PLC,
ASOS PLC, Amazon
Europe and boohoo
Group PLC
Significant current
external appointments
Chief Financial Officer
at Tide
Independent
Yes
Committee membership
A R N
Appointment to
the Board
1 October 2022
Relevant skills
and experience
• Significant consumer
and broad operational
experience
• Previous chief executive
officer at Pets at Home
PLC and held other
senior positions at
several of the UK’s best-
known retail brands,
including Wilkinson
Stores Limited, Asda/
Walmart stores Inc,
J Sainsbury PLC and
M&S PLC
Significant current
external appointments
CEO (interim) at Fressnapf
Holdings SE, Non-Executive
Director at Motability
Operations Group PLC,
Non-Executive Director
Nutriment (formerly Voff)
and Chair at Agrifarma
S.p.A (Arca Planet Italy)
Independent
Yes
Committee membership
A R N
Appointment to
the Board
1 November 2022
Relevant skills
and experience
• Significant experience
in digital and IT fields
across retail, hospitality
and transport sectors
having worked
previously at John Lewis
Partnership, BAA and
Pret A Manger
• Experience in digital
transformation and
information technology
Significant current
external appointments
Chief Digital & Data Officer
at Merlin Entertainments
Independent
Yes
AO World PLC Annual Report and Accounts 2025 53
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Leadership
Team
(Strategic delivery
and long-term
planning)
Risk Audit
Trading
Teams
(Performance and
operational
delivery)
Remuneration
Management
Team
(Update and
communication
forum)
Nomination
Executive Committee
Board Committees
Corporate Governance Report
AO World PLC Board
The Company is led and controlled by the Board. The structure and
business of the Board is designed to ensure that the Directors focus on
strategy, monitoring, governance and the performance of the Group.
Governance framework
The Board is responsible for maintaining a strong
and effective system of governance throughout
the Group. Day-to-day management of the
implementation of the matters approved by the
Board, the Group’s activities, governance and
oversight is delegated to the Executive Committee
comprising the CEO and CFO. The Executive
Committee is supported by the leadership
team, who are the direct reports of the Executive
Committee, and comprise a team of highly skilled
and experienced senior managers, including the
leaders of the Group’s business units, and leaders
from our enabling and supporting functions,
including IT, Finance, HR and Legal. The leadership
team meets with the Executive Committee regularly
and is focused on the strategic direction and
achievement of the Group’s priorities.
Trading team meetings, led by the Executive
Committee, are held weekly. This team focuses on
the performance, operational delivery, forecasting
and resolution of any business issues with escalation
to the leadership team as required. It is formed of
leadership and management team members with
operating responsibility. The Group’s management
team is led by the CFO and comprises our work level
three and above AOers (defined as those who lead,
run key operations, or have specialist knowledge
to lead projects and processes). The management
team meets monthly and receives an update
from the Executive Committee on the financial
performance and strategic priorities of the Group,
as a two-way communication session.
Steering Committees are also in place for key
areas of compliance, such as Data Protection and
Information Security (“DPS”), the Senior Managers
and Certification Regime (“SM&CR”), Health and
Safety and ESG are specific projects as required.
Formal Board meetings of our operating subsidiary
companies are also held on a regular basis. Our
Risk Management Committee, which reports to the
Audit Committee and which includes the Executive
Committee, our Director of Group Audit and Risk
and our Legal Director, also meets at least bi-
annually to oversee our robust risk management
procedures and to critically review the Group’s
risk register.
Read more on
pages 65 to 70
Read more on
pages22 to 26
Read more on
pages71 to 95
Read more on
pages 62 to 64
AO World PLC Annual Report and Accounts 202554
Board leadership and
Group purpose
Our Board is collectively responsible for the Group’s
performance and to shareholders for the long-term
sustainable success of the Company; we recognise
that a clearly defined and well-established strategy
and purpose, combined with the Group’s culture and
values, are critical to achieving this.
The Board regularly reviews its composition,
experience and skills to ensure that the Board and
its Committees continue to work effectively and
that the Directors are demonstrating a commitment
to their roles. Further details of the relevant skills
and experience of the Board are set out in their
biographical details on pages 88 and 89.
The positions of our Chair and Chief Executive
Officer are not exercised by the same person,
ensuring a clear division of responsibility at the
head of the Company. The roles and responsibilities
of our Board members are clearly defined and are
summarised below. For a more detailed description
of the roles of the Chair and Chief Executive Officer,
please review the Terms of Reference on our website
at ao-world.com.
Board roles and key responsibilities
Chair (Geoff Cooper)
• Providing leadership of the Board
• Setting the Board’s agenda to emphasise
strategy, performance and value creation
• Monitoring the effectiveness of the Board
• Ensuring good governance
• Facilitating both the contribution of the
Non-Executive Directors and constructive
relations between the Executive and
Non-Executive Directors
Founder and Chief Executive Officer
(John Roberts)
• Leading the performance and management of
the Group
• Proposing strategies and business plans to
the Board
• Providing entrepreneurial leadership of the
Company to ensure the delivery of the strategy
agreed by the Board
Group Chief Financial Officer and Chief
Operating Officer (Mark Higgins)
• Day-to-day management of all functions within
the Group and implementing Board’s decisions
• Providing strategic and operational leadership of
the Company
Non-Executive Directors (Chris Hopkinson,
Shaun McCabe, Peter Pritchard,
Sarah Venning)
• Bringing independence, impartiality, experience
and special expertise to the Board
• Constructively challenging the Executive
Directors, helping to develop proposals on
strategy and ensuring good governance, to
scrutinise and hold to account the performance
of management against performance objectives
Designated Non-Executive Director –
People Champion (Chris Hopkinson)
• Providing an appropriate avenue for AOers to
raise any areas of concern
• Ensuring a regular dialogue between employees
and the Board to aid information flow and
to communicate the views and concerns of
the workforce
• Working with the Board to take appropriate steps
to evaluate the impact of Board proposals on
the workforce
• Assessing and monitoring the Group’s culture
• Ensuring workforce policies and practices are
consistent with the Company’s values
We have not appointed any of our Non-Executive
Directors to the role of Senior Independent NED
and are keeping this under review. The Chair has
the support of all Non-Executives together with
the Company Secretary who act as an internal
sounding board and discussions are open and
transparent. Shareholders are welcome to
contact any of our Non-Executives through the
Company Secretary (or their direct lines) should
communication with the Chair or Executive
Directors be inappropriate.
Committees of the Board
The Board has delegated authority to its
Committees to carry out certain tasks on its
behalf and to ensure compliance with regulatory
requirements, including the Companies Act 2006,
the Listing Rules, the Disclosure Guidance and
Transparency Rules and the Code. This also allows
the Board to operate efficiently and to give the right
level of attention and consideration to relevant
matters. A summary of the Terms of Reference of
each Committee is set out below and the reports of
the Committee Chairs are set out on pages 62 to 95.
The full Terms of Reference for each Committee
are available on the Company’s website at
ao-world.com, and from the Company Secretary
upon request.
AO World PLC Annual Report and Accounts 2025 55
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Corporate Governance Report continued
Committee
Role and Terms of
Reference
Membership required under
Terms of Reference
Minimum number of
meetings per year under
Terms of Reference
Audit
Reviews and reports to
the Board on the Group’s
financial reporting,
internal control and risk
management systems,
whistleblowing, internal
audit and the independence
and effectiveness of the
External Auditors
At least two Independent Non-
Executive Directors (or such
number as is required from time
to time by the UK Corporate
Governance Code)
Three
Remuneration
Responsible for all elements
of the remuneration of the
Executive Committee, the
Chair and the Company
Secretary
At least two Independent Non-
Executive Directors (or such
number as is required from time
to time by the UK Corporate
Governance Code)
Three
Nomination
Reviews the structure, size
and composition of the
Board and its Committees,
and makes appropriate
recommendations to
the Board
At least two members (or such
number as is required from time
to time by the UK Corporate
Governance Code) and a
majority shall be Independent
Non-Executive Directors
Two
Board meetings
The Board meets as often as necessary to
effectively conduct its business. Seven formal
meetings are scheduled each year plus additional
meetings to exclusively discuss the Group’s strategy
as appropriate. Unscheduled, ad hoc meetings are
arranged as required, where, for example, additional
time is required or where a decision is required
outside of the Board’s normal meeting cycle. The
Board also holds several informal dinners before or
after a Board meeting, which help foster a healthy
culture and promote open and transparent debate.
The Board has an annual rolling plan of items for
discussion, which is reviewed and adapted regularly
to ensure all matters reserved for the Board,
with other items as appropriate, are discussed.
Pre-agreed meeting agendas ensure that time
is balanced between operating performance,
strategy, governance and compliance so that
the Board can discharge their duties effectively.
To ensure the Board’s time is used effectively in
meetings, papers are circulated several days in
advance to provide adequate time for reading and
to raise any specific queries or questions.
At each meeting, the Chief Executive Officer
and Group Chief Financial Officer and Chief
Operating Officer update the Board on: key
operational developments and performance;
the market and other key operational risks; the
important milestones reached in the delivery of the
Group’s strategic objectives; the Group’s financial
performance and banking arrangements; AO’s
relationships with investors and potential investors;
and shareholder feedback and analysis. Meetings
and any unresolved concerns expressed by any
Director are minuted by the Company Secretary
who, as Director of Group Legal, provides the
Board with an update on any legal issues and
reports on health and safety. All members of the
leadership team and selected members of the
management team are invited to attend Board
or Committee meetings to present on specific
business issues and proposals. This way, the Board
is given the opportunity to meet with the next
layers of management and gain a more in-depth
understanding of key areas of the business. External
speakers are also invited to present to the Board
on topical industry and regulatory issues and to
provide training for the Directors where necessary.
There is a formal schedule of matters reserved
to our Board for decision, which the Company
Secretary ensures is complied with, and which
is available on the Company’s website at
ao-world.com, and from the Company Secretary
upon request.
AO World PLC Annual Report and Accounts 202556
Key Board activities during the year
to 31 March 2025
Examples of some of the key matters considered by
the Board during the year are set out below.
Strategy
• Continually reviewed and challenged the Group’s
strategy, focusing, in particular, on growth
drivers, organisational structure and leadership/
management development, to ensure the Group
is correctly set up to achieve its goals
• Oversaw the acquisition of musicMagpie PLC
• Reviewed the Company’s progress against its
ESG strategy, including consideration of scenario
planning, metrics and targets
• Monitored the alignment between the Group’s
strategy and its culture with regular updates
on attrition rates, whistleblowing events and
activities designed to promote the Group’s values
and purpose
Operational performance
• Review of regular reports from senior
management on trading, business performance
and health and safety
• Supported management in the continual review
of current trading and reforecasting and reviewed
the actions proposed to drive efficiencies
• Approved the annual budget, the business plan
for the Group and individual capital expenditure
projects, including systems, leases and the
continued renewal of the logistics fleet
Finance and investor relations
• Reviewed and approved the Group’s full-year
and half-year results, together with trading
statements and the Group’s viability statement
and going concern status
• Reviewed the monthly reports produced by
the CFO
• Appointed a new corporate broker
• Received reports and updates on investor
relations activities and the views of shareholders
(including engagement with key shareholders)
• Approved the Group’s tax strategy
Governance and Legal
• Reviewed compliance with the Listing Rules, DTRs
and the Corporate Governance Code
• Consideration of the composition and
effectiveness of the Board, in particular how the
Board can support the future growth plans of
the Group
• Conducted the annual review of Board
effectiveness and approved updates to various
policies and statements, including the Company’s
gender pay gap statement and modern slavery
statement
Risk management
• Undertook the annual review of the principal and
emerging risks of the Group and consideration of
risk appetite
• Via the Audit Committee, reviewed and validated
the effectiveness of the Group’s systems
of internal controls and risk management
framework
• Received reports on specific risk areas across
the Group, including Data Protection and the IT
security environment
• Approved the implementation of a Governance,
Risk and Controls application (AuditBoard) to
assist with the monitoring of key strategic and
operational risks
Board meeting attendance
The table on page 50 summarises the attendance
of the Directors during the year-ended
31 March 2025.
Where Directors are unable to attend meetings, they
receive the papers scheduled for discussion at the
relevant meetings, giving them the opportunity to
raise any issues and give any comments to the Chair
in advance of the meeting.
Board Tenure as at 31 March 2025
Sarah Venning appointed 1 November 2022
Peter Pritchard appointed 1 October 2022
Shaun McCabe appointed 24 July 2018
Geoff Cooper appointed 1 July 2016
Mark Higgins appointed 1 August 2015
Chris Hopkinson appointed 12 December 2005
John Roberts appointed 2 August 2005
Composition, succession and
effectiveness
Composition
As at the date of this Annual Report, the Board
comprises seven members: the Chair, two Executive
Directors and four Non-Executive Directors.
Excluding the Chair, three Board members (i.e. at
least half) are considered independent in line with
the Code.
All current Directors served throughout the year.
Details of the skills, career background, Committee
membership, tenure and external appointments of
all Directors are set out on pages 52 and 53. Further
details on the role of the Chair and members of
the Board can be found on page 55. The Chair
and Non-Executive Directors are appointed for an
initial three-year term, which then rolls over but
all Directors are subject to annual re-election by
shareholders at the AGM.
The Nomination Committee has delegated
authority for any new appointments to the Board
following a formal, rigorous and transparent
AO World PLC Annual Report and Accounts 2025 57
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Corporate Governance Report continued
procedure with the decision for any appointment
a matter reserved for the Board. Further detail
on the work of the Nomination Committee during
the year, including the Board’s policy on diversity,
can be found on pages 62 to 64. The disclosures
relating to gender diversity within the Group and
further information on the work being undertaken
across the Group to further diversify our workforce
is included in the Sustainability: Fair, Equal
and Responsible Report on pages 42 to 46. For
information on our procedures concerning the
appointment and replacement of Directors, please
see page 98.
For the purposes of assessing compliance
with the Code, the Board considers that Shaun
McCabe, Peter Pritchard and Sarah Venning are
Non-Executive Directors who are independent of
management and free from any business or other
relationship that could materially interfere with
the exercise of their independent judgement. The
Board also considers that Geoff Cooper, Chair of
the Company, was independent at the time of his
appointment in July 2016 and remains so. Chris
Hopkinson is not considered to be independent for
the purposes of the Code solely due to his long-
term involvement with the business, but otherwise
exercises independent judgement.
Having regard to the character, judgement,
commitment and performance of the Board and
Committees to date, and following the internal
Board Effectiveness review conducted during the
year, the Board is satisfied that no one individual
will dominate the Board’s decision making and
considers that all of the Non-Executive Directors are
able to provide effective challenge to management.
A key objective of the Board is to ensure that its
composition is sufficiently diverse and reflects a
broad range of skills, knowledge and experience to
enable it to meet its responsibilities. As can be seen
from the biographies on pages 52 and 53 and the
skills matrix on page 50, the Chair and the Non-
Executive Directors collectively have significant
industry and public company experience, which will
support the Company in executing its strategy.
Directors’ skills and experience
The Board skills and experience matrix on page 50
details some of the key skills and experience that
our Board has identified as particularly valuable
to the effective oversight of the Company and
execution of our strategy.
Induction process
In line with the Code, we ensure that any new
Directors joining the Board receive appropriate
support and are given a comprehensive and tailored
induction programme organised by the Company
Secretary, with each Director’s individual experience
and background taken into account in developing
a programme tailored to their own requirements.
The induction, typically, includes the provision of
background material on the Company, one-to-
one meetings with the CEO and CFO and briefings
with senior management as appropriate. Any new
Director will also be expected to meet with major
shareholders if required. New Directors also receive
appropriate guidance on key duties as a Director of
a listed company.
Effectiveness review
The effectiveness and performance of the Board is
vital to our success. The Code requires that there
should be a formal and rigorous annual review of
the performance of the Board, its Committees,
the Chair and individual Directors and that
consideration should be given to conducting a
regular, externally facilitated Board review, which,
for FTSE 350 companies, should be at least every
three years. Our last external review was carried out
in the year-ended 31 March 2018 and the Board has,
instead, conducted internal reviews annually, as it
does not consider that the benefits of an external
evaluation, over and above those provided by the
internal evaluation, are sufficient to justify the cost.
The internal review during the 2025 financial year
was led by the Chair and, in relation to the review of
the Chair himself, by Chris Hopkinson. As part of this
process, one-to-one meetings were conducted with
all Directors and the Company Secretary, who were
given the opportunity to express their views about:
• the performance of the Board and its
Committees, including how the Directors work
together as a whole;
• the balance of skills, experience, independence
and knowledge of the Directors; and
• whether each Director continues to make an
effective contribution.
The results of the review were collated by the Chair
and an assessment was provided to the Nomination
Committee for further discussion. The results of the
review indicated that the Board is working well and
that there are no significant concerns amongst the
Directors about its effectiveness. Some actions were
agreed and will be progressed over the coming year.
Following the review, it was agreed that all Directors
contribute effectively, demonstrate a high level
of commitment to their role and together provide
the skills and experience that are relevant and
necessary for the leadership and direction of
the Company.
AO World PLC Annual Report and Accounts 202558
Information, support and
development opportunities
available to Directors
All Board Directors have access to the Company
Secretary, who advises them on governance
matters. The Chair and the Company Secretary
work together to ensure that Board papers are
clear, accurate, delivered in a timely manner to
Directors and are of sufficient quality to enable the
Board to discharge its duties. Specific business-
related presentations are given by members of
the Group management team when appropriate
and external speakers attend Board meetings to
present on relevant topics and provide training
as required.
As well as the support of the Company Secretary,
there is a procedure in place for any Director to take
independent professional advice at the Company’s
expense in the furtherance of their duties, where
considered necessary; for example, Deloitte advise
on remuneration matters. As part of the Board
review process, training and development needs
are considered and training courses are arranged,
where appropriate. Directors are encouraged to
be proactive in identifying areas where they would
like additional information to ensure that they are
adequately informed about the Group.
The Board confirms that all Directors have the
requisite knowledge, ability and experience to
perform the functions required of a Director of a UK
premium-listed company.
External directorships and
time commitment
Each Director is expected to attend all meetings
of the Board and of those Committees on which
they serve and is required to devote sufficient
time to the Group’s affairs allowing them to fulfil
their duties effectively as Directors. In accordance
with the Code, full Board approval is sought prior
to a Director accepting an external appointment
to a publicly listed company or other significant
commitment. Prior to the approval of any external
appointments, the Board considers the time
commitment required by Directors to perform their
duties effectively. As part of the selection process
for any new Board candidates, any significant
time commitments are considered before an
appointment is agreed. All Non-Executive Directors
are required to devote sufficient time to meet
their Board responsibilities and demonstrate
commitment to their role.
As part of the annual review, the Board has also
considered the external directorships and time
commitment of all the Directors and agreed that
these do not impact on the time that any Director
devotes to the Company, and believes that such
experience only enhances the capability of the
Board. Save for Crystalcraft Limited, a dormant
company, and AO Smile Foundation, for which he
receives no fees, details of the Directors’ significant
external directorships can be found on pages
52 to 53.
Directors’ conflicts of interest
Directors have a statutory duty to avoid situations in
which they have, or may have, interests that conflict
with those of the Company, unless that conflict is
first authorised by the Board. This includes potential
conflicts that may arise when a Director takes up
a position with another company. The Company’s
Articles of Association, which are in line with the
Companies Act 2006, allow the Board to authorise
potential conflicts of interest that may arise and to
impose limits or conditions, as appropriate, when
giving any authorisation. Any decision of the Board
to authorise a conflict of interest is only effective if
it is agreed without the conflicted Director’s voting
or without their votes being counted. In making such
a decision, the Directors must act in a way they
consider in good faith will be most likely to promote
the success of the Company.
The Company has established a procedure for the
appropriate authorisation to be sought prior to
the appointment of any new Director, or prior to a
new conflict arising and for the regular review of
actual or potential conflicts of interest. An Interests
Register records any authorised potential conflicts
and will be reviewed by the Board on a regular basis
to ensure that the procedure is working effectively.
Director election
Following the Board review process and the
subsequent recommendations from the Nomination
Committee, the Board considers that all Directors
continue to be effective, committed to their roles
and able to devote sufficient time to their duties.
Accordingly, all Directors will seek re-election at the
Company’s AGM.
AO World PLC Annual Report and Accounts 2025 59
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Corporate Governance Report continued
Whistleblowing and anti-bribery
and corruption procedures
AO is committed to the highest standards of ethical
conduct, honesty and integrity in our business
practices. The Board recognises that transparent
communication is essential to maintain our business
values and is supportive of a culture where there
is genuine means for the workforce to raise any
concerns. During the year, the Board, via authority
delegated to the Audit Committee, reviewed the
whistleblowing policies in place across the Group
and received regular updates on reports arising
from its operation. The review confirmed that
AO’s policies were appropriate, accessible and
comprehensive, and provided colleagues with the
opportunity to raise concerns about any form of
wrongdoing anonymously.
The Group also has zero tolerance of corruption,
fraud, criminality (including financial crime), or the
giving and receiving of bribes for any purpose. The
Group has online training modules via its learning
and development platform for anti-bribery and
corruption, which colleagues are required to
complete annually. Any breach of procedures will
be regarded as serious misconduct, potentially
justifying immediate dismissal.
Shareholder engagement
The Board recognises the importance of
communicating with its shareholders to ensure
that its strategy and performance are understood,
and that it remains accountable to them. The
Company has established an Investor Relations
function, headed by the Group Chief Financial
Officer and Chief Operating Officer. The Investor
Relations function ensures that there is effective
communication with shareholders on matters such
as strategy and, together with the Chief Executive
Officer, is responsible for ensuring that the Board
understands the views of major shareholders.
The Investor Relations function is supported by a
combination of two corporate brokers, Jefferies and
Peel Hunt.
.There is an ongoing programme of dialogue and
meetings between the Executive Directors and
institutional investors, fund managers and analysts.
This includes formal meetings with investors to
discuss interim and final results, maintaining an
ongoing dialogue with the investment community
through regular contact with existing and
potential shareholders, attendance at investment
conferences and holding investor roadshows
as required. At these meetings, a wide range of
relevant issues, including strategy, performance,
management and governance are discussed
within the constraints of information that has
already been made public. The Investor Relations
function deals with ad hoc queries from individual
shareholders. The Remuneration Committee Chair
also engages in discussion with shareholders
on significant matters relating to Executive
remuneration, in particular, any amendments
or material changes to our remuneration
policy, and the Chair of the Board also engages
with shareholders as and when requested or
required. During the year, the Chair of the Board
also engaged individually with a number of
shareholders to understand, in particular, current
investor sentiment on Board composition and
independence, governance arrangements and the
strategic development of the Group.
The Board is aware that institutional shareholders
may be in more regular contact with the Company
than other shareholders, but care is exercised
to ensure that any price-sensitive information is
released to all shareholders – institutional and
private – at the same time, in accordance with legal
requirements. The Company Secretary is available
to shareholders if they have concerns that cannot
be raised through the normal channels or if such
concerns have not been resolved. The Board
obtains feedback from its joint corporate brokers,
Jefferies and Peel Hunt, on the views of institutional
investors on a non-attributed and attributed
basis. Any concerns of major shareholders would
be communicated to the Board by the Executive
Directors. As a matter of routine, the Board receives
regular reports on issues relating to share price
and trading activity, and details of movements
in institutional investor shareholdings. The Board
is also provided with current analyst opinions
and forecasts. All shareholders can access
announcements, investor presentations and the
Annual Report on the Company’s corporate website
at ao-world.com.
AO World PLC Annual Report and Accounts 202560
Annual General Meeting
The AGM of the Company will take place at 9:00
am on 15 September 2025 at the Company’s head
office at 5a The Parklands, Lostock, Bolton BL6 4SD.
All shareholders have the opportunity to attend in
person or, alternatively, vote electronically prior to
the meeting. The notice of the AGM can be found
in a booklet that is being mailed out at the same
time as this report, and can also be found on our
website ao-world.com. The notice of the AGM sets
out the business of the meeting and an explanatory
note on all resolutions. Separate resolutions are
proposed in respect of each substantive issue.
Whether or not you are able to attend, the Board
encourages all shareholders to vote as soon as
possible and, in any event, by no later than 9.00
am on 11 September 2025 by taking advantage
of our registrar’s secure online voting service (via
aoshareportal.com) by using the CREST system,
or by using a proxy voting form, which is available
on request from the Company’s registrars,
MUFG Group.
Shareholders have the opportunity to submit
questions on the AGM resolutions electronically
before the meeting and such questions, limited
to matters relating to the business of the AGM
itself, should be sent to Cosec@ao.com and will be
responded to on an individual basis.
The results of the voting will be announced to the
London Stock Exchange and made available on
our corporate website as soon as practicable after
the meeting. At last year’s AGM, all resolutions were
passed with votes in support of 91% or more.
Stakeholder voice into the
Boardroom
Section 172 of the Companies Act 2006 (“s172”)
requires a Director of a Company to act in the
way they consider, in good faith, would be most
likely to promote the success of the Company
for the benefit of its members as a whole. Further
information on how the Group engages with its key
stakeholders including suppliers, employees and
the community and the Board’s s172 statement
can be found on pages 28 to 30. In setting and
monitoring strategy, the Board is mindful of
the impact that its decisions will have on the
Group’s stakeholders.
The Board’s aim is to make sure that its decision
making follows a consistent process, by considering
the Company’s strategic priorities whilst working
within a governance framework for key decision
making that takes into account all relevant
stakeholders and balances their various interests.
The Board considers the need to act fairly between
stakeholders and continues to maintain high
standards of business conduct. Nevertheless, the
Board acknowledges that stakeholder interests
may conflict with each other and that not every
decision can result in a positive outcome for
all stakeholders.
The following are used to bring the voice of the
stakeholder into the Boardroom:
• Board papers include consideration of s172
factors to ensure that decision making is fully
informed and to enable discussion
• Regular updates are received from the HR
Director on people, culture, diversity, talent
and engagement
• The Non-Executive Director and People
Champion, Chris Hopkinson, provides regular
feedback and updates from the Employee Voice
to the Board forum
• The CEO regularly holds interactive Q&A sessions,
which complement the monthly “State of the
Nation” communications forums
• The Board’s strategy sessions include the
potential impact to stakeholders when deciding
and agreeing on strategic priorities
• The Executive Directors meet with major
shareholders and feedback is provided to
the Board
• The Board receives regular presentations from
the Group management team, Legal Director and
external advisers
AO World PLC Annual Report and Accounts 2025 61
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Nomination Committee Report
I am pleased to introduce
the report of the Nomination
Committee for the year-ended
31 March 2025. Full details
of the Committee and its
activities during the year are
given in this section.
Committee
members
Meetings attended/
Meetings eligible to
attend
Geoff Cooper 2/2
Chris Hopkinson 2/2
Peter Pritchard 2/2
Sarah Venning 2/2
Ensuring a balanced Board
with diversity of skills and
thought.”
Geoff Cooper
Chair
Membership and meetings
• During the period under review, the Committee
comprised four Non-Executive Directors
• The Code requires that the majority of the
Committee are Independent Non-Executive
Directors. I am Chair of the Board and of the
Committee and was deemed independent on
appointment and the Board considers that
I continue to be so. Both Peter Pritchard and
Sarah Venning are deemed independent. Chris
Hopkinson is not deemed to be independent due
to his historic involvement with the Company;
however, Chris’s continuity, experience and
knowledge meant he continued to make a
significant contribution to the work of the
Committee, ensuring it was run effectively.
Therefore, the Board considers that the
Committee comprises a majority of Independent
Non-Executive Directors and complies with the
requirement of the Code.
• Detailed experience, skills and qualifications of
all Committee members can be found on pages
52 to 53.
• The Group Legal Director and Company
Secretary serves as Secretary to the Committee.
By invitation, the meetings of the Nomination
Committee may be attended by the Chief
Executive Officer, Group Chief Financial Officer
and Chief Operating Officer, the Group HR
Director and the other Non-Executive Directors.
• Under its Terms of Reference, the Committee is
required to meet no less than twice a year. This
year, the Committee met twice and this was
deemed appropriate to allow the Committee to
discharge its responsibilities.
• The timing of meetings is scheduled to coincide
with key dates in the Group’s financial cycle and
in advance of a Company Board meeting to
maximise effectiveness.
Key responsibilities and
Terms of Reference
The Committee is responsible for regularly reviewing
the structure, size and composition of the Board,
and has responsibility for nominating candidates
for appointment as Directors to the Board, having
regard to its composition in terms of diversity
and ensuring it reflects a broad range of skills,
knowledge and experience to enable it to meet
its responsibilities. It also ensures that plans are
in place for orderly succession for appointments
to the Board. The Nomination Committee
makes recommendations to the Board on its
membership and the membership of its principal
Committees. The Nomination Committee also
makes recommendations to the Board concerning
the reappointment of any Non-Executive Director
as they reach the end of the period of their initial
appointment (three years) and at appropriate
intervals during their tenure. The Committee also
considers and makes recommendations to the
AO World PLC Annual Report and Accounts 202562
Board on the annual election and re-election of
any Director by shareholders, including Executive
Directors, after evaluating the balance of skills,
knowledge and experience of each Director
against the Company’s strategy and with regard
to the results of the review of Board effectiveness.
The Nomination Committee takes into account
the provisions of the Code and any regulatory
requirements that are applicable to the Company.
The Chair does not chair the Nomination
Committee when it is dealing with the appointment
of a successor Chair. In these circumstances, the
Committee is chaired by an independent member
of the Nomination Committee elected by the
remaining members. The responsibilities of the
Committee are delegated by the Board and are
set out in its written Terms of Reference, which are
reviewed, updated as necessary and approved each
year. A copy of the Terms of Reference is available
on our corporate website at ao-world.com or upon
request from the Company Secretary.
Board appointment process
The Nomination Committee has a formal, rigorous
and transparent procedure for the appointment
of new Directors to the Board. When the need to
appoint a Director is identified, the Committee
determines the role profile, including the skills,
knowledge and experience required. This takes into
account the existing composition of the Board and
any required experience and understanding of our
stakeholders. We use a combination of external
recruitment consultants and personal referrals in
making any required appointments. We consider the
gender, nationality, ethnic background, educational
and professional background of candidates, as
well as individual characteristics that will enhance
diversity of thinking of the Board and delivery of our
strategy. Suitable candidates are interviewed by
Committee members, the Executive team and the
Company Secretary. We give careful consideration
to ensure proposed appointees have enough
time available to devote to the role and that the
balance of skills, knowledge and experience on
the Board is appropriate. When the Nomination
Committee has identified a suitable candidate, we
then make a recommendation to the Board, which
has responsibility for making the final decision. All
appointments are made on merit, against objective
criteria and with due regard to the benefits of
diversity on the Board.
Board composition and
succession planning
The composition of the Board has continued to be
an area of focus for the Nomination Committee this
year as it considers succession planning and seeks
to ensure that the Board maintains the appropriate
balance of skills, experience and independence,
as well as providing the appropriate challenge and
promoting diversity.
At the time of writing, I am approaching 9 years of
service on AO’s Board. Therefore, during the year,
the Committee met with the Executives without
me present and discussed whether to extend
my tenure. At the outset of these discussions,
the Committee noted that I was independent on
appointment and that, 9 years on, I have no material
business relationship with AO, receive no additional
remuneration from AO, have no close family ties
with any AO employees, have no cross-directorships
and have no links to significant shareholders.
The Committee consider that I continue to hold
management to account, continue to exercise
objective judgement, have developed a detailed
understanding of the business and effective
working relationship with both the Executive and
Non-Executive Directors, and promote constructive
challenge amongst other Board members. As a
result, the Committee has concluded that my
tenure should be extended for a further 3 years,
which will allow me to complete the recruitment and
induction of two additional Board members. During
the year, we commenced the recruitment of two
new Non-Executive Directors to join the Board; the
first to have experience of the plc landscape and
a financial background, as part of our succession
planning, the second to have a marketing and
brand background to enhance our existing skill set.
With both appointments, we have highlighted to our
search partner the strong desire to enhance Board
diversity, particularly in respect of gender and
ethnic diversity.
Diversity and inclusion
The Board’s diversity policy forms part of AO’s
Group-wide diversity and inclusion strategy, which
seeks a workforce with a culture that truly accepts
diversity of thought, equity and inclusion. The
Board believes that diversity in its composition is
an important part of its overall effectiveness and
that a diverse Board with different perspectives,
and those that reflect the Group’s customer base,
will enhance the quality of debate and decision
making. The Directors consider that, although
relatively small in number, its composition should
aim to reflect diversity in its broadest sense,
including aspects such as diversity of skills,
perspectives, industry experience, educational
and professional background, gender, ethnicity
and age. All these aspects are to be considered
in determining the optimum composition of the
Board and the Executive Committee to ensure an
appropriate balance.
The Directors remain supportive of the
recommendations in both the Hampton-Alexander
Review on gender diversity and the Parker Review
on ethnic diversity, together with the Listing Rules’
targets, and are committed to increasing female
and ethnic representation on the Board and
throughout the wider organisation, as they believe
that the business should have a culture that truly
accepts diversity of thought, equity and inclusion.
We will only appoint candidates who we judge can
AO World PLC Annual Report and Accounts 2025 63
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Nomination Committee Report continued
contribute strongly to the Board’s experience
and skill set. This will continue to be the Board’s
approach in making any new appointments.
Female representation on our Board is currently
14% (2024: 14%), and 33% at senior management
level (which comprises the Executive Committee’s
direct reports) (2024: 36%). Currently, we have no
ethnic diversity at any of these levels. Accordingly,
we do not meet the diversity targets set out in the
Listing Rules but, as covered above, this will remain
an important consideration in future appointments.
Disclosures relating to gender diversity within the
Company and further information on the work
being undertaken across the Group to diversify
our workforce is included in the Sustainability: Fair,
equal and responsible report on pages 42 to 46.
Board effectiveness
During the year, we conducted a robust internal
review, which indicated that the Board is working well
and that there are no significant concerns about its
effectiveness. Further details of this year’s internal
review and its results can be found on page 62 of the
Corporate Governance Report.
Assessment of independence
and time commitments of the
Non-Executive Directors
Following our assessment this year, the Nomination
Committee is satisfied that, throughout the year,
all Non-Executive Directors remained independent
as to both character and judgement and in
accordance with the Code. This was with the
exception of Chris Hopkinson who is designated as
non-independent due to his tenure of appointment
and historic involvement with the Company.
However, the Committee remains confident that
Chris’s experience and knowledge continue to make
a significant contribution to the work of the Board
over the reporting period.
Before appointing prospective Directors, the
Board takes into account the other demands
on the Directors’ time and any significant time
commitments are disclosed prior to appointment.
The letters of appointment for the Chair and Non-
Executive Directors set out their expected time
commitments to the Group. Any additional external
appointments following appointment to the Board
require prior approval by the Board in accordance
with the Code.
In its assessment of the effectiveness of the Board,
the Committee gave consideration to the number
of external appointments held by the Non-Executive
Directors, including the time commitment required
for each. No instances of overboarding were
identified and the Nomination Committee confirms
that all individual Directors have sufficient time to
fulfil their responsibilities and are fully engaged with
the Group’s business.
Reappointment of Directors
On the recommendation of the Nomination
Committee, and in line with the Code, all currently
appointed Directors will retire at the 2025 AGM
and offer themselves for reappointment. The
biographical details of the current Directors
can be found on pages 52 to 53. The Committee
considers that the performance of the Directors
standing for re-election continues to be effective
and that they each demonstrate commitment
to their role and devote sufficient time to attend
Board and Committee meetings and any other
duties. The terms and conditions of appointment
of Non-Executive Directors, including the expected
time commitment, are available for inspection at
the Company’s registered office.
Looking ahead
Over the coming year, the Committee will be
focused on the Board’s mix of skills, knowledge
and experience to ensure that it can continue to
support the Group to achieve its goals. Further,
senior management succession planning and
strengthening our senior talent pipeline will remain
under consideration, along with supporting
the Group as it continues to build a diverse and
inclusive business.
Geoff Cooper
Chair, Nomination Committee
17 June 2025
AO World PLC Annual Report and Accounts 202564
Audit Committee Report
On behalf of the Committee, I am pleased to
present this year’s Audit Committee Report for the
year-ended 31 March 2025. The report provides an
overview of the Committee’s role and how it has
discharged its responsibilities in monitoring and
reviewing the integrity of financial information and
in ensuring appropriate challenge and oversight
across the Company’s internal control environment
and financial reporting, setting out the significant
issues we have reviewed and concluded on during
the year.
Overview
Committee member
Meetings attended/Meetings
eligible to attend
Shaun McCabe 5/5
Peter Pritchard 5/5
Sarah Venning 5/5
Ensuring effective oversight
of internal controls, risk and
reporting.”
Shaun McCabe
Chair, Audit Committee
Membership
• During the year, the Audit Committee comprised
solely of Independent Non-Executive Directors.
• As required by the 2018 Code, I have recent and
relevant financial experience and am a Member of
the Institute of Chartered Accountants in England
and Wales, and so can provide appropriate
challenge to management.
• The Committee, as a whole, has competence
relevant to the sector in which the Group
operates in line with the 2018 Code requirements.
Detailed experience, skills and qualifications of
all Committee members can be found on pages
52 to 53, and the Board has confirmed that it
is satisfied that the Committee members have
the appropriate range of financial, commercial
and sectoral expertise and that the Committee
satisfies the 2018 Code requirements.
Key responsibilities and
Terms of Reference
The responsibilities of the Committee are
delegated by the Board and are set out in its
written Terms of Reference, which are reviewed,
updated as necessary and approved each year.
A copy of the Terms of Reference is available on
our corporate website at ao-world.com (via the
Board Committees page), or upon request from the
Company Secretary.
Effectiveness of the
Audit Committee
The effectiveness of the Committee is assessed
annually and as part of the annual Board and
Committee effectiveness review, further details of
which are set out on pages 57 and 66. The review
for the year to 31 March 2025 concluded that the
Committee continued to operate effectively during
the year.
Key work during the year
• Focused on financial reporting, to ensure the
Annual Report and Accounts are fair, balanced
and understandable
• Challenged management on key areas of
estimate and judgment and reviewed conclusions
and associated disclosure, particularly around
the assessment of the carrying value of goodwill
and the valuation of the contract asset
• Reviewed interim results statements and
financial results presentations, including going
concern statements
• Reviewed the effectiveness of external and
internal audit processes and the effectiveness
and appropriateness of our system of
internal controls
• Reviewed the quarterly internal audit reports
together with management responses and
reviewed the progress on required actions to
improve the controls environment
AO World PLC Annual Report and Accounts 2025 65
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
• Reviewed updates on the changing regulatory
environment and oversaw the implementation
of the new GRC tool, which will aid compliance
with the new provision 29 of the 2024 Corporate
Governance Code
• Reviewed Internal Audit practices against IIA
International Professional Practices standards
• Recommended the reappointment of the
External Auditor, terms of engagement and
reviewed audit and non-audit fees
• Reviewed the Group’s risk management
procedures
• Reviewed the Group’s whistleblowing and
anti-bribery and fraud prevention procedures
and controls
• Reviewed the Group’s Finance function
Assessment of the Group’s internal
controls and risk management
The Board acknowledges its responsibility for
establishing and maintaining the Group’s system
of internal controls in the achievement of its
objectives. Good internal controls also facilitate
the effectiveness and efficiency of operations, help
to ensure the reliability of internal and external
reporting and assist in compliance with applicable
laws and regulations. However, the system of
internal controls is designed to manage, rather
than eliminate, the risk of failure to achieve business
objectives and can provide only reasonable and not
absolute assurance against material misstatement
or loss.
During the year, the Committee continued to
oversee and review AO’s internal financial controls
and risk management processes, notably reviewing
the actions identified by the External Auditor and
the Internal Audit function to improve certain
aspects of the Group’s control environment.
Other key elements of the Group’s risk management
and internal controls system, which have been
reviewed by the Committee during the year, include
the Group’s financial reporting and information
system and the information security and IT controls
framework. Our Risk Management Committee
operates separately (meeting bi-annually and
attended by Executive Directors) sitting alongside
the Audit Committee, and issues regular reports
to the Audit Committee. In line with the 2018 Code,
this year, the Risk Management Committee has
reviewed the Group’s risk management processes
and procedures. A separate report on the work of
the Risk Management Committee, including the
Group’s risk management practices, its principal
risks and its long-term viability, can be found in the
risk section on pages 22 to 27.
Internal Audit
Through the Committee, the Group’s Internal Audit
function provides independent assurance to the
Board on the effectiveness of the internal control
framework through its dynamic audit plan, which is
aligned to the key risks of the business. The Director
of Group Audit and Risk reports to me in relation
to all Internal Audit matters and, as a Committee,
we are responsible for ensuring that the Internal
Audit team has adequate skills and resource
levels that are sufficient to provide the level of
assurance required.
The Audit Committee receives reports from the
Internal Audit function on a quarterly basis.
These reports, along with risk management
updates, enable the Committee to discuss key
findings, recommendations and any plans by
management to address any areas of weakness,
with management action tracked and reviewed as
appropriate. Progress against the audit plans is also
reviewed and any proposed amendments to the
plans are approved by the Committee.
The Committee concluded, based on the
information received over the year, that the system
of internal control was appropriately monitored
and managed.
In the past year, continued progress has been made
in enhancing our internal control environment.
Increased risk mitigation has been achieved
through concerted effort, such as the improvements
seen in Tech through strengthening governance,
process and tooling, or as an output of the pivot to
profit strategy, where improved controls have been
required to reduce wastage and increase margins.
Internal Audit results from FY25 indicate that none
of our re-audited areas have regressed and many
have improved, particularly in Tech. Additionally,
first-time audits have been mainly positive.
Aside from the core assurance activity, Internal
Audit has dedicated a significant portion of time
and resource in supporting the business on risk
mitigation strategies and helping to strengthen the
control environment.
Internal Audit effectiveness review
We monitor and assess the role, effectiveness and
independence of the Internal Audit function in the
overall context of the Group’s risk management
systems, annually.
The Committee confirms that it is satisfied that,
throughout the reporting period, the Internal Audit
function provided the level of assurance required
and had an appropriate level of resources in order
to carry out its responsibilities effectively and that
it continues to do so. The necessary procedures
are also in place to ensure the appropriate
independence of the Internal Audit function,
including, in particular, the Director of Group Audit
and Risk, whose tenure means his independence
and objectivity is subject to increased scrutiny from
the Committee.
Audit Committee Report continued
AO World PLC Annual Report and Accounts 202566
Whistleblowing
The Group has established formal whistleblowing
procedures by which all employees may, in
confidence, raise concerns about possible
improprieties in finance and other matters. Our
whistleblowing policy sets out the ethical standards
expected of everyone that works for, and with, us,
and includes the procedures for raising concerns
in strict confidence through two channels – email
or voicemail. Both channels are overseen by
the Company Secretary and Director of Group
Audit and Risk to ensure issues are investigated
independently with findings reported to the Audit
Committee and all significant matters reported
directly to the Board.
The Audit Committee monitors and reviews
the effectiveness of the Group’s whistleblowing
arrangements. Following its annual review of
whistleblowing arrangements, the Committee
is satisfied that they are effective, facilitate the
proportionate and independent investigation of
reported matters, and allow appropriate follow-up
action to take place. The Committee also reviewed
the Group’s anti-bribery, anti-corruption and fraud
prevention procedures and controls and was
satisfied that these were effective.
The Board has confirmed that, through the Audit
Committee’s review of the key financial and internal
control matters for 2024 as detailed above, it has
reviewed the effectiveness of the system of internal,
financial, operational and compliance controls and
risk management.
Review of financial statements
and reporting
The Audit Committee is responsible for reviewing
the appropriateness of, and monitoring, the
financial reporting processes for the Group. This
includes reviewing reports from the External Auditor,
reports on internal controls, accounting and report
matters, and management representation letters
concerning accounting and reporting matters.
The Committee reviews management’s report on
areas of significant judgement and estimation
and considers whether these correlate with the
key audit risks identified by the External Auditor
and the comments of the External Auditor on
management’s chosen approach. The Committee
also considers the accounting policies and
practices adopted by the Group, the application
of the applicable reporting standards, compliance
with governance frameworks, and the presentation
and disclosure of financial information.
Fair, balanced and understandable
The Directors are responsible for preparing the
Annual Report and Accounts and, at the request
of the Board, we have considered whether the
Annual Report and Accounts for the year ended
31 March 2025, when taken as a whole, are fair,
balanced and understandable and whether they
provide the information necessary for members to
assess the Group’s position, performance, business
model and strategy.
Following the Committee’s review, we were pleased
to provide assurance to the Board that the
Annual Report and Accounts for the year-ended
31 March 2025 is fair, balanced and understandable
and that the Directors have provided the necessary
information for our shareholders to assess the
Company’s position, prospects, business model and
strategy. This was confirmed to the Board, whose
statement in this regard, is set out on page 101 of the
Directors’ Report.
Significant financial statement
reporting issues
In reviewing the financial statements with
management and the External Auditor, the Audit
Committee reviewed and discussed reports from
management on accounting policies, current
accounting issues and the key judgements and
estimates in relation to this Annual Report. It
assessed whether suitable accounting policies
had been adopted and the reasonableness of the
judgements and estimates that had been made
by management. The table on page 68 highlights
the most significant issues, judgements, estimates
and policies for the Period in the opinion of the
Audit Committee.
Going concern and
viability assessments
The Committee reviewed the Group’s going concern
and viability statements as set out on page 48. It
considered the reports prepared by management
in support of such statements and obtained the
External Auditor’s views on the work undertaken
by management to assess the Group’s resilience
to its principal risks under various scenarios.
The Committee was satisfied that the viability
statement set out in the Strategic Report presented
a reasonable outlook for the Group to March 2028
and recommended to the Board the adoption of
both the going concern and viability statements for
inclusion in this report.
AO World PLC Annual Report and Accounts 2025 67
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Audit Committee Report continued
Significant financial matters
Product
Protection Plan
Asset: Risk that
the contract
asset is under/
over stated
The Company sells product protection plans to customers purchasing electrical appliances, as
agent, for Domestic & General, who administer the plans, collect money from the customers and pay
a commission to the Company for each plan sold. Commission for sales of product protection plans,
for which the Group acts as an agent, are included within revenue and as a contract asset based on
the estimated value of future commissions receivable over the life of the product protection plan.
Revenue is recognised at the point of sale on the basis that the Group has fulfilled its obligations to
the customer in line with accounting standards relating to revenue recognition. The calculation takes
into consideration the anticipated length of the plan, the historical rate of customer attrition and any
other matters including commission rates and price increases, which could affect future attrition, and is
discounted to reflect the time value of money but also risks around the recoverability of the receivable
balance attributable to the product protection plans. In line with normal practice, management has
reassessed all the key estimates, assumptions and judgements used in recognising revenue (which are
set out in Notes 4 and 22). It has prepared a detailed paper setting out the results of this reassessment.
The Committee has reviewed the assumptions, judgements and estimates used in this area by
management and, following appropriate challenge, we consider the policy and practice appropriate.
Network
Commission
contract asset:
Risk that the
contract asset
is under/over
stated
The Group’s Mobile business receives commission from the Mobile Network Operators. The network
commission revenue is based on the value of commissions due over the expected life of the network
contract. As this requires subjective estimates, the future outcomes of these estimates could be
different which would affect the amount of revenue recognised.
Management reassesses the judgements and estimates used on a half-yearly basis taking into account
any changes in customer behaviour particularly with regard to cancellations. Changes in contractual
entitlement has resulted in management reassessing the estimates and judgements used in
quantifying revenue and, in particular, the amount of variable consideration that should be constrained.
Management has prepared a detailed paper setting out the key assumptions used in recognising
revenue (which are set out in Notes 4 and 22). The Committee has reviewed the judgements and
estimates made in this area by management and, following appropriate challenge, we consider the
policy and practice appropriate.
Recoverability
of Mobile
goodwill: Risk
that goodwill
related to
Mobile is
impaired
On the acquisition of Mobile Phones Direct Limited (since renamed AO Mobile Limited) in December 2018,
the Group recognised goodwill and intangible assets, which, at 31 March 2024, had a carrying value of
£21.8m. In February 2024, the Group acquired further intangible assets mainly related to the websites
and domains from A1 comms (in administration), which had a carrying value of £2.2m at 31 March 2024.
At 31 March 2024, the amount of headroom above the carrying value was £1.3m. Performance of the
Mobile business and the wider post-pay Mobile market has deteriorated further, particularly in the
second half of the year, and, as a consequence, management have performed a full impairment review
of the Mobile goodwill and remaining intangibles.
The management team has prepared a detailed paper setting out the key assumptions, estimates and
judgements in this area. The base case shows a significant impairment and hence sensitivities have not
been run. The Committee has reviewed the estimates and judgements made by management and, after
due challenge and debate, was content with the assumptions made, the judgements applied and the
subsequent impairments made.
Acquisition of
musicMagpie:
risk that
the assets/
liabilities
acquired –
including
goodwill – are
under/ over
stated
On 12 December 2024, AO acquired the whole of the share capital of musicMagpie. Management have
reviewed the acquisition balance to ensure consistency with the accounting policies used by AO as well
as engaging third-party specialists to help value acquired intangible assets and hence any residual
goodwill. As a result of this exercise, certain fair value adjustments have been made, which include an
impairment of existing recognised intangibles as well as the recognition of intangible assets, which had
previously not been capable of recognition. Goodwill arising on the acquisition was £13.3m.
Management has prepared a detailed paper setting out the key assumptions and process used in
assessing the assets and liabilities acquired (which are set out in Note 35). The Committee has reviewed
the judgements and estimates made in this area by management and, following appropriate challenge,
we consider the policy and practice appropriate. The Committee note that the fair value adjustments
are provisional in nature and will be finalised in the permitted hindsight period.
In addition to the significant financial matters noted above, the Audit Committee also considered the carrying value of the
Company’s investments as this is a key audit matter identified by KPMG. The Committee were satisfied with the carrying value
and noted that no issues were raised by KPMG.
AO World PLC Annual Report and Accounts 202568
External audit
The Audit Committee has primary responsibility
for leading the process for selecting the External
Auditor and overseeing the relationship and
performance. It is required to make appropriate
recommendations on the appointment,
reappointment and removal of the External
Auditor, through the Board, to the shareholders to
consider at the Company’s AGM. It is also required
to assess the independence of the External Auditor
on an ongoing basis and to negotiate the terms
of engagement, audit fee and to ensure that they
have an appropriate audit plan in place. Following
approval by shareholders at the AGM held on
18 September 2024, KPMG LLP was reappointed as
AO’s External Auditor for the financial year-ended
31 March 2025. The External Auditor was not
asked to look at any specific areas by the Audit
Committee during the review period.
Review of effectiveness of
external audit process
A key responsibility of the Committee is to review
and monitor the effectiveness of the external audit
process and independence of the External Auditor.
The assessment of the audit effectiveness for the
year-ended 31 March 2024 was undertaken at the
completion of that audit as part of an ongoing
process of review throughout the year.
In conducting its review, the Committee had
regard to:
• openness of communication between the
External Auditor and senior management;
• any risks to audit quality that the External
Auditor identified;
• the key controls that the External Auditor relied
on to address any identified risk to audit quality,
such as appropriate audit methodologies;
• the findings from internal and external
inspections of the external audit and audit firm;
• whether the original audit plan was met;
• the reports that are brought to the Committee
by the lead audit engagement partner and other
senior members of the audit team;
• the quality of the management responses to
audit queries;
• the skills and experience of the audit team,
including whether, in the opinion of the
Committee, the External Auditor demonstrated
sound understanding of the business;
• whether an appropriate degree of challenge
and professional scepticism was applied by
the External Auditor through its meetings with
management; and
• a review of the independence and objectivity of
the audit firm and the quality of the formal audit
report given by the Auditor to shareholders.
• The assessment process is based on open and
honest dialogue with the External Auditor. The
Committee sought assurance from KPMG at the
half-year review and year-end audit planning
meetings on the approach to the audit, an
explanation of their understanding of the Group’s
significant risks to audit quality and the level of
their understanding of the business, its industry
and related risk. Further, the Committee held
discussions with the External Auditor at various
stages during the year to discuss their remit and
any issues arising from their work that helped to
ensure that the audit remained on track and that
the deliverables would be achieved.
Based on the above, the Committee was satisfied
that: KPMG delivered a robust and quality audit
with the appropriate resources available to the
Company; suitable focus was placed on the
significant risk areas and key areas of accounting
judgement; and that they provided effective
challenge to management. We therefore concluded
that the relationship with the External Auditor
continued to work well and we are satisfied with their
effectiveness and independence.
External audit tenure
On behalf of the Board, the Committee oversees
the relationship with the External Auditor. KPMG was
appointed as Auditor to the Company in July 2016
for the financial year-ended 31 March 2017, and was
reappointed at the 2024 AGM. Roger Nixon was the
Audit Partner for the year-ended 31 March 2025.
In accordance with requirements set out within
the Competition and Markets Authority’s
regulations (the Statutory Audit Services for Large
Companies Market Investigation (Mandatory
Use of Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014) (the “CMA
Order”) and the UK Corporate Governance Code,
the Committee is required to retender the external
audit contract by no later than the 2027 year-end
audit, this being ten years since appointment.
Under the CMA Order, when an incumbent Auditor
has been in office for five consecutive years, the
Company is required to explain when it plans to
conduct a new tender process and the reasons why
completing it in that year is in the best interests of
the Company’s members.
The Committee will retender the external audit
contract and commence this process during
the 2025 calendar year. It is expected that a list
of invitees will be approved by the Committee in
November 2025, tender responses collected and
evaluated in January 2026, interviews with the
Committee in February 2026 and a final decision
made in March 2026.
AO World PLC Annual Report and Accounts 2025 69
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Audit Committee Report continued
Reappointment of External Auditor
for the 2025 financial year
Through open and honest dialogue with the
External Auditor, as well as feedback received from
the Executive Directors and senior management,
the Committee is satisfied with the objectivity
and independence of the External Auditor. The
Committee is also satisfied that KPMG continues
to perform its audit work to a high standard and
with robust challenge. On this basis, the Committee
has recommended to the Board that KPMG be
reappointed at the 2025 AGM.
Statement of compliance with the
Competition and Markets Authority
(“CMA”) Order
The Company confirms that it has complied with
The Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive
Processes and Audit Committee Responsibilities) Order
2014 (Article 7.1), including with respect to the Audit
Committee’s responsibilities for agreeing the audit
scope and fees and authorising non-audit services.
Non-audit services
There are policies and procedures in place in
relation to the provision of non-audit services by
the External Auditor. The Company’s general policy
is not to use the appointed External Auditor for
any non-audit services. However, the Committee
recognises that it may be appropriate to use the
External Auditor to provide specialist advice where,
as a result of their position as Auditor, they either
must, or are best placed to, perform the work in
question as a result of their position, subject always
to audit rules surrounding prohibited non-audit
services. In such ad hoc occurrences, the Group’s
policy ensures that: there is adequate protection
of their independence and objectivity; any such
use requires approval by the Audit Committee;
any non-audit services must fall within the limits
specified by legislation of not more than 70% of the
average audit fee over a consecutive three-year
period; and various services are wholly prohibited,
including tax, legal, valuation and payroll service.
Further, the External Auditor is not permitted to
perform any work which they may later be required
to audit, or which might affect their objectivity and
independence or create a conflict of interest.
During the year, KPMG undertook non-audit-related
assignments relating to the review of the Group’s
half-year report amounting to £72,000 (2024:
£70,000), representing c.7% of the value of the
Group audit fee (2024: c.9%). This assignment was
conducted in accordance with the Group’s policy
and was consistent with the professional and ethical
standards expected of the External Auditor, and the
Committee considers that the assurance provided
by the Auditor on this item is considered necessary
in the interests of the Group. The Audit Committee
was satisfied with work performed and considered
the level of these fees, determining that they are
not material relative to the income of the external
audit as a whole, and, therefore, did not conflict with
KPMG’s objectivity and independence.
The Group has also continued with the appointment
of other accountancy firms to provide certain
non-audit services to the Group, for example, in
connection with tax advisory services, remuneration
advice and debt advice, and anticipates that this
will continue during the year-ending 31 March 2026.
External Auditor fees
During the financial year, the Group External
Auditor’s fees were £1m (2024: £0.8m). The Audit
Committee was satisfied that the level of audit fees
payable in respect of the audit services provided
was appropriate and that an effective audit could
be conducted for such a fee.
Details of the fees paid to the External Auditor for
audit and non-audit services are set out in Note 9 to
the consolidated financial statements.
Independence and objectivity
of the External Auditor
The Audit Committee monitors and assesses the
independence and objectivity of the External
Auditor, including the evaluation of potential threats
to independence and the safeguards in place to
mitigate these. The Committee considered there
were no relationships between the External Auditor
and the Group that could adversely affect its
independence and objectivity. The External Auditor
reported to the Committee that it had considered
its independence in relation to the audit and
confirmed that it complies with UK regulatory and
professional requirements and that its objectivity is
not compromised. The Committee also considered
the tenure of the External Auditor, the Auditor’s own
processes for maintaining independence, and the
nature and amount of non-audit work undertaken by
the Auditor. The Audit Committee took these factors
into account in considering the External Auditor’s
independence and concluded that KPMG remained
independent and objective in relation to the audit.
Priorities for the year-ending
31 March 2026
A forward agenda will be used for the coming year’s
activities focused around the review of the annual
financial statements, the results of the external
annual audit and interim reviews, and internal audit
quarterly updates and the external audit plan,
review of risk management reports, review of internal
audit plans, and findings and recommendations.
The work of the Committee will continue to focus on
overseeing management’s preparations for the UK
Corporate Reforms. The Committee will also seek to
undertake a full appraisal of the effectiveness of the
Group’s risk management process and procedures.
Shaun McCabe,
Chair, Audit Committee
17 June 2025
AO World PLC Annual Report and Accounts 202570
Ensuring a reward strategy
that supports short- and
long-term sustainable
performance.”
Peter Pritchard
Chair, Remuneration Committee
Directors’ Remuneration Report
Committee membership
The Committee currently comprises Peter Pritchard (Chair), Shaun
McCabe, Sarah Venning and Geoff Cooper. Peter, Shaun and Sarah
are all independent Non-Executive Directors and Geoff was deemed
independent on appointment as Chair of the Board.
The full Terms of Reference of the Committee are available on the
Company’s corporate website at www.ao-world.com.
The attendance of Committee members at meetings during the year is
disclosed below:
Committee Members
Number of
meetings attended
Peter Pritchard 6/6
Shaun McCabe 6/6
Sarah Venning 6/6
Geoff Cooper 6/6
FY25 highlights and to date
Highlights of the work of the Remuneration Committee in FY25 and to
the date of this report:
• Determined the levels of vesting for the AO Incentive Plan FY25 Award
• Determined the shares to be released pursuant to the AO Incentive
Plan FY22 Award
• Reviewed the effectiveness of the Directors’ Remuneration Policy,
considering the latest guidance on executive compensation and
employee views, with a view to putting the Policy to a binding vote at
the 2025 AGM
• Considered pay levels for the wider workforce
• Reviewed the Company’s Gender Pay Gap report and recommended
actions
• Determined the remuneration for FY26 for our Executive Directors
and certain senior management
• Set the performance conditions for the AO Incentive Plan FY26 Award
FY26 focus areas:
• Implement the Directors’ Remuneration Policy
• Monitor performance against the AO Value Creation Plan targets and consider implications
FY25 AOIP Performance Snapshot:
Performance
Condition
Weighting Result* Vesting %
Financial
Revenue 15% £1,108m 5.6%
LFL Adjusted PBT 45% £45.2m 43.3%
Average Daily Cash 10% £48.3m 10%
Strategic
Trustpilot Score 10% 4.9 10%
Employee Index Score 5% 81 3.5%
Employee Talent 5% Full attainment 5%
Development of
Mobile Business
10% No attainment 0%
Total 77.3%
* Results here are stated on a like-for-like adjusted basis and relate to the continuing operations of the Group, exc. fees related to the Magpie acquisition,
the post-acquisition revenue and losses of Magpie and the impairment charge relating to the Mobile Cash Generating Unit.
AO World PLC Annual Report and Accounts 2025 71
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Director Compensation implementation for FY26
Base Salary
2% increase for CEO (aligned to the majority of the wider workforce) – £557K
18.6% increase for CFO and COO* – £475K
* to reflect promotion to and additional responsibilities associated with the combined CFO and COO role
Flexible Benefits inc.
pension
13% of salary for CEO
15% of salary for CFO
With a commitment from the Executives to not allocate an amount in excess of 5% of their
salary to their pension (being the rate of pension which is available to the majority of the
wider workforce).
AOIP (single incentive
plan combining cash
bonus and long-term
share incentive)
Maximum Opportunity
– CEO – 300% of salary
– CFO – 300% of salary
Shareholding guidelines
200% of salary (to be held for two years post-employment)
Non-Executive Directors
& Chair
No change
616,010
460,407
266,895
309,587
422,193
353,827
Mark HigginsJohn Roberts
£0
£300,000
£600,000
£900,000
£1,200,000
£1,500,000
Fixed
AOIP Cash
AOIP FY22
Deferred shares
FY25 Executive Compensation at a glance
AO World PLC Annual Report and Accounts 202572
This section sets out the Company’s Directors’
Remuneration report. The report is structured as
follows:
• The annual statement from the Chair of the
Remuneration Committee
• The revised Directors’ Remuneration Policy (which
will be subject to a binding shareholder vote at the
2025 AGM)
• The Annual Report on Remuneration for FY25
(which will be subject to an advisory vote at the
2025 AGM)
Annual Statement by the Chair of
the Remuneration Committee
Dear shareholder
On behalf of the Board, I am pleased to present the
Directors’ Remuneration Report for our financial
year-ended 31 March 2025 (FY25).
Looking back
Our Executive Board performed strongly throughout
the year, executing strategic priorities to achieve
considerable growth at both the top and bottom
lines and cash generation. On a like-for-like basis*
the Group achieved revenue of £1,108m (up c.7%
YoY), LFL Adjusted PBT of £45.2m (up c.32%YOY)
vastly improving on the prior period, despite
challenges in our Mobile business. Average daily
cash (adjusting for the acquisition of musicMagpie
and the ET funding (as detailed on page 86)) was
towards the top end of our expectations and we
ended the year with c.£23.m of net funds on a pre-
IFRS16 basis. The customer proposition has been
improved, resulting in exceptional Trustpilot scores
of 4.9 out of 5 and we are pleased to report our
employee engagement and culture remains strong.
This performance is reflected in the remuneration
earned by our Executives, for which a high
proportion is performance-related variable pay, as
per our policy.
AOIP Award FY25
In terms of variable pay, the Executives were
granted AOIP FY25 Awards, where the performance
conditions were set along three sets of deliverables:
1. Financial (output) metrics, focused on revenue,
adjusted (like for like) profit before tax and
average daily cash (15%, 45% and 10% weighting,
respectively)
2. Stakeholder impact measures, focusing on
customers (Trustpilot scores) and employees
(Employee Index Score) (10% and 5% weighting,
respectively)
3. Strategic transformation measures, specifically
aimed at development of employee talent and
development of the Mobile business (5% and 10%
weighting respectively)
The financial performance is detailed above and
earlier in this report, with strong outturns for both
the LFL adjusted PBT (43.25% out of 45%) and
average daily cash (10% out of 10%) reflecting our
strong performance in the year. The revenue outturn
was 5.6% (out of 15%), despite c.7% total growth YoY,
reflecting the stretching nature of the targets set by
the Committee.
Customer satisfaction, measured via Trustpilot,
performed strongly with AO ending the year
with an improved score of 4.9 out of 5 from over
700,000 customer reviews. This score is market
leading and an excellent achievement by the team
during continuing challenging consumer markets.
Accordingly, the Committee has determined that
this performance condition has been met in full.
Three employee surveys have been conducted in
house during FY25, which assessed our Engagement
Index Score. The first was conducted in June 2024,
which resulted in a score of 82, the second in
September 2024, which resulted in a score of 81 and
a third in January 2025 which gave a score of 80. The
average of these three scores is 81, which translates
that engagement at AO is regarded as Very Good.
Accordingly, the Committee has determined that
this performance condition vested in line with the
formulaic approach at 3.5% (out of 5%).
In relation to the first strategic transformation
measure, the Committee was pleased with the
work done to develop employee talent, with
three phases of work (establishing a leadership
skills framework, updating value chains and
capabilities and working with external consultants
to challenge the value chains and capabilities and
identify gaps) undertaken during the year with a
fourth phase (implementing prioritised capability
roadmaps) continuing into the next financial year.
Accordingly, the Committee has determined that
this performance condition has been met in full.
In relation to the second strategic transformation
measure, the Committee and the Executives
agreed that, despite progress in many areas of the
Mobile business, due to the continued decline in the
post-pay market, the performance condition had
not been met and it vested as 0% (out of 10%).
In total, the Committee has awarded 77.3% of the
maximum AO Incentive Plan Award, which we feel
is warranted and well-earned in a strong year for
the Group and, therefore, no discretion has been
applied. The award value will be settled as one-
third in cash and two-thirds under an option over
shares to become exercisable in 2028 (subject to the
performance underpin and continued employment).
Full details of the cash amount to be paid and
share awards to be issued to our Executive Directors
under the AO Incentive FY25 Award are disclosed
on pages 85 to 87. The Committee deems that the
payout levels over the past years show the AOIP is
functioning as intended, with the level of payout this
year reflecting the Company’s strong performance
and the broader stakeholder experience.
* Like-for-like basis relates to the continuing operations of the
Group, exc. fees related to the Magpie acquisition, the post-
acquisition revenue and losses of Magpie, the impairment
charge relating to the Mobile Cash Generating Unit.
AO World PLC Annual Report and Accounts 2025 73
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
AOIP FY22 Award – release of conditional
deferred shares
Each of John Roberts and Mark Higgins were granted
a conditional deferred share award pursuant to
the FY22 AOIP Award, which had a deferral period
spanning FY23 to FY25, inclusive, and which – at
the point of grant – had a value of £143,374 and
£108,148, respectively. These awards were subject to
a performance underpin based on overall business
performance (both operational and strategic)
over the vesting period, which was assessed by
the Committee following the end of FY25. The
Remuneration Committee has deemed that the
performance underpin has been met in full given
the profitable growth during the vesting period
and, accordingly, the share awards should vest in
full. Accordingly, nil-cost options over 358,435 and
270,371 shares for John and Mark will vest following
the announcement of our FY25 results and will also
be subject to a further one-year holding post-vesting.
Pension and Benefits
Since, FY23 the Executives and our leadership team
have been subject to a flexible benefits regime
(which equated to 13% and 15% of salary for the
CEO and CFO respectively) which can be used to
acquire benefits (including pension contributions)
as they see fit. The programme was rolled out to
senior management levels during FY24. Although
this mechanism allows our Executives to choose
the level of their pension contributions, each of
the Executives have committed to not allocate
an amount in excess of 5% of their salary to their
pension in future years to align with the rate of
pension that is available to the majority of the
wider workforce.
The Annual Report on Remuneration (set out on
pages 85 to 95) describes further details on the
remuneration earned by our Executives and the
wider Board and how the policy approved at the
2022 AGM has been implemented in the year under
review. It will be the subject of an advisory vote at the
forthcoming AGM.
Value Creation Plan
During the year, we continued to engage with
AOers on our all-employee AO Value Creation Plan
(“VCP22”), which targets sustained profitable high
growth over the longer term and will be measured
over FY27 to FY29. It continues to be powerful
in engaging the broad employee population
effectively on a common stretching path, creating
an understanding of value creation drivers, market
mechanics, and steering progress and immense
pride of being one team.
Looking forward
Pay for sustainable performance; our
remuneration policy
Our remuneration policy was approved by
shareholders in September 2022 and has been
in force throughout the year under review. In line
with the normal three-year cycle, the policy is due
to be submitted to shareholders at the 2025 AGM
and, therefore, during the year, the Committee
undertook a comprehensive review of the policy to
ensure that it continues to incentivise delivery of
the strategy. The Committee has determined that
it continues to support sustained value creation
and performance steering alongside our goals
and stretching targets. The single incentive plan
(the “AOIP”), which allows the Committee to refresh
targets each year, aligns effectively with AO’s
strategy of working towards annual milestones
to deliver long-term performance, allowing the
Company to remain agile and respond to a
rapidly changing market, whilst ensuring that
both performance measures and targets align
with our evolving business strategy. In particular,
the Committee considers the AOIP works well with
the VCP22 to drive short-, medium- and long-term
sustainable performance. However, the Committee
has given consideration to the post-vesting holding
period applied to the AOIP awards granted to the
Executives and determined that the one-year
post-vesting holding period should be removed.
The Committee believes the additional one-year
holding period is unnecessary on the basis that our
current matrix of incentive plans, including the VCP,
encourage long-term thinking and create alignment
with shareholders over the long-term. The post-
vesting holding period was originally introduced to
comply with the Code; however, the VCP provides
significant long-term alignment with shareholders
over a seven-year period, far exceeding the
requirements of the Code. The proposed change
also aligns the AOIP structure for our Executives with
the rest of the AOIP participants.
As a result, the Committee will present an amended
Policy to shareholders for approval at the 2025 AGM
reflecting such change, but in all other respects, the
Policy will remain unchanged.
Wider workforce considerations
Recent years have seen salary increases struggling
to keep pace with spiking inflation; however, latest
UK salary trends surveys support a more positive
outlook, with forecasts for smaller nominal UK
salary increases through 2025. Accordingly, a
minimum of pay increase of 2% has been awarded
to the majority of the workforce to continue to
support our people with the cost-of-living crisis
with certain areas receiving higher increases either
to remain competitive in market or as a result of
increases in national minimum wage.
Approach to remuneration for
FY26 Executives
The performance of the business this year has
been strong and our Executives have played hugely
significant roles in continuing to grow the business,
deliver improved operational performance,
profitability and the creation of shareholder value.
At the end of the reporting period, Mark, our CFO,
AO World PLC Annual Report and Accounts 202574
with the approval of the Board, was promoted
into a new combined role of CFO and COO. Given
such additional responsibilities for Mark and in line
with our normal annual approach, the Committee
reviewed base salaries during the year in order to
ensure that they remain in line with our philosophy
that our Executives are paid fairly (reflecting the
scope and responsibilities of the role) and in line with
market. As part of this, the Committee undertook
a review of benchmark data for both the CEO
and CFO/COO roles across the FTSE 250 with the
aspiration that base pay should fall in the market
competitive range with variable pay opportunity
levels aligned to the wider market.
Following this review, John was awarded a 2% pay
increase aligned to the majority of the workforce.
For Mark, the Committee determined that an
18.6% pay increase should be awarded to reflect
the broader role. The Committee is aware that this
represents a significant increase but determined
that the additional responsibilities of Mark’s new
role justify such an increase. These additional
responsibilities include:
• Optimising operational performance, enhancing
productivity and driving overall growth and
profitability in line with the strategy.
• Acting as AO’s main adviser on all issues relating
to operational functions, keeping abreast of the
latest developments to maintain AO’s competitive
position and adaptability in a rapidly evolving
business landscape.
• Working closely with AO’s senior leadership
team to develop strategies to streamline
processes, increase operational capacity and
efficiency, allocate resources and monitor key
performance indicators.
• Developing and implementing strategies for the
growth of AO and managing risks effectively.
Flexible benefit rates (as a percentage of salary)
remain unchanged against the prior year.
In terms of variable pay, the Executives will
be entitled to participate in the AOIP with an
opportunity level of 300% of salary.
We have continued to set the performance
conditions along three sets of deliverables:
1. Financial (output) metrics, focused on adjusted
profit before tax, UK Retail B2C revenue growth,
and average daily cash (45%, 15% and 10%
weighting, respectively);
2. Stakeholder impact measures, focusing
on customers (Trustpilot) and employees
(Employee Index Score (10% and 5% weighting,
respectively); and
3. Two strategic measures, specifically aimed at (i)
developing certain opportunities in the UK Retail
B2C area of the business and (ii) conducting
a comprehensive strategic, financial, and
operational review of the Mobile business (7.5%
weighting each).
The Committee believes these performance
conditions will focus management on profitable
growth, with a PBT metric accounting for the lion’s
share of the financial metrics (45%). This, combined
with UK Retail B2C Revenue, average daily cash
metric (10%) and the customer metric (10%) will
ensure a clear focus on sustainable growth with an
exceptional customer proposition. For FY26, the
revenue measure relates to UK Retail B2C Revenue
rather than Group revenue to create an additional
focus in this area, but which is balanced by the
strategic measure focused on Mobile.
We continue to recognise the importance of ESG
and, in the context of remuneration, continue
to set “stakeholder” measures encompassing
customers and employees, which are aimed at
ensuring the goodwill of the business and driving
long-term sustainability.
The Committee believes these measures provide
the appropriate balance, continuing to drive
transformation and recognise the importance of
key stakeholders, and output measures that should
drive the creation of shareholder value.
Non-Executives
Fees for the Non-Executive Directors (including
the Chair) were reviewed during the year and
benchmarked against peers. It was determined that
no changes were required for FY26.
Further details regarding the implementation of
our policy in the year ahead are provided on pages
92 to 95.
Employees
As set out in the Corporate Governance report,
Chris Hopkinson, our designated People Champion,
has headed up engagement with the workforce,
generally, and looked at areas of pay through
survey feedback and Voice to the Board sessions.
We plan to continue engaging with employees to
ensure both transparency of remuneration, and
that employee views are taken into account when
setting and determining Executive remuneration in
the year ahead.
I trust this sets out clearly how the Committee has
implemented the existing policy during FY25, the
key features of the policy and how we propose to
approach FY26.
If shareholders wish to discuss any aspects of this
report, please contact me through the Company
Secretarial team at cosec@ao.com.
Peter Pritchard
Chair, Remuneration Committee
17 June 2025
AO World PLC Annual Report and Accounts 2025 75
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Policy report
This part of the Directors’ Remuneration report
sets out the Directors’ remuneration policy for the
Company (the “Policy”) and has been prepared in
accordance with the Companies Act 2006, Schedule
8 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008
(as amended) and the UKLA’s Listing Rules. The
Policy has been developed taking into account the
principles of the UK Corporate Governance Code
(the “Code”) as it currently applies.
The Policy will be put to a binding shareholder
vote at the 2025 AGM and, subject to approval,
will take formal effect from that date. We do not
propose any fundamental changes to our Policy as
following careful consideration of the remuneration
landscape, taking into account our evolving
strategy and stakeholder views and, looking at
its implementation over recent years, we believe
that it is operating effectively and closely aligns to
our business strategy. However, we are proposing
to remove the one-year holding period, which
applies to AOIP awards. The Committee believes
the additional 1-year holding period is unnecessary
on the basis that our current matrix of incentive
plans including the VCP encourage long-term
thinking and create alignment with shareholders
over the long term. The post-vesting holding period
was originally introduced to comply with the Code;
however, the VCP provides significant long-term
alignment with shareholders over a seven-year
period, far exceeding the requirements of the
Code. The proposed change also aligns the AOIP
structure for our Executives with the rest of the
AOIP participants.
Whilst it is intended that the Policy will apply for
three years following approval, the Policy will be
kept under review on an annual basis.
Role of the Committee in setting the Policy
The Committee is responsible for determining, on
behalf of the Board, the Company’s Policy on the
remuneration of the Executive Directors, the Chair
and other senior Executives of the Group.
The Committee’s overarching aims in setting the
Policy are:
• to attract, retain and motivate high-calibre
senior management for sustained contribution
and to focus them on the delivery of the Group’s
strategic and business objectives;
• to promote a strong winning and
customer-orientated culture that builds on
accountability of results;
• to incentivise profitable growth, innovation and
the creation of long-term shareholder value; and
• to align the interests of Executive Directors with
those of shareholders and stakeholders.
In promoting these objectives, the Committee aims
to ensure that Executives are paid fairly. It has set a
policy framework that is structured so as to adhere
to the principles of good corporate governance and
appropriate risk management. The Committee also
recognises the importance of promoting a strong
“collegiate culture”; this is reflected in the approach
to setting pay across the whole senior management
population as a team, and to overall principles for
remuneration and benefits for the overall employee
population of AO and, as noted above, this is one of
the reasons for the removal of the holding period.
Executive Directors are invited to attend
Remuneration Committee meetings when it is
considering and developing policy to ascertain
their views, particularly given the application of the
Policy beyond Executives. However, the Executives
do not attend parts of meeting where their specific
compensation is being considered and approved.
When developing the policy, input was received from
the Chair and management whilst ensuring that
conflicts of interest were suitably mitigated. The
Committee also considered carefully corporate
governance developments.
The Committee’s Terms of Reference are available
on the Company’s website at ao-world.com.
How the views of shareholders are taken
into account
The Committee understands that constructive
dialogue with shareholders plays a key role
in informing the development of a successful
remuneration policy, values this dialogue as a
source of exchange and learning, and we regularly
seek to actively engage with shareholders in these
matters. The Committee will continue to consider
any further shareholder feedback throughout the
year and further in relation to the AGM each year.
Any such feedback, plus any additional feedback
received from time to time, will be considered as
part of the Company’s annual review of the Policy.
In addition, when it is proposed that any
material changes are to be made to the Policy,
the Committee Chair will consult with major
shareholders of these in advance and will ensure
that there is opportunity for discussion, in order that
any views can be properly reflected in the Policy
formulation process.
AO World PLC Annual Report and Accounts 202576
Consideration of employment conditions
elsewhere in the Group
When designing the Policy for Executive Directors,
the Committee takes into account the overall
approach to reward for, and the pay, benefits and
employment conditions of, other employees in the
Group. This process ensures that any increase to the
pay of Executive Directors is set in an appropriate
context and is appropriate relative to increases
proposed for other employees, ensuring our reward
philosophy is consistently and fairly applied. The
Committee is also provided with periodic updates
on employee remuneration practices and trends
across the Group.
We have also discussed pay and benefits with our
Employee Champions through our Voice to the
Board sessions, which Chris Hopkinson (our NED
Engagement Champion) has attended.
Summary of our remuneration policy
The table on pages 78 and 79 provides a
summary of the key aspects of the Policy for
Executive Directors.
AO World PLC Annual Report and Accounts 2025 77
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Element Base salary Flexible pension and benefits AO incentive plan Value Creation Plan (“VCP”)
Purpose and
link to
strategy
• To aid the recruitment and retention of high-calibre Executive Directors
with the expertise and experience to deliver the Company’s strategy
• To reflect individual experience and expertise
• To provide a fair and appropriate level of fixed basic income
• To provide a competitive flexible benefits
and pension allowance to aid recruitment
and retention of high-calibre Executive
Directors with the expertise and experience
to deliver the Company’s strategy
• To reward the delivery of annual objectives relating to the
business strategy
• Through significant deferral into the Company’s shares to align the
long-term interests of Executive Directors with those of shareholders
• To retain and motivate all of our employees and drive exceptional
value creation over the long term
Operation • Normally reviewed annually, with any increase normally effective on 1 April
(increases may be awarded at different times if considered appropriate by
the Committee)
• Set at a level required to recruit suitable Executive Directors,
reflecting their experience and expertise and in the context of other
comparable positions
• Any subsequent increase determined by the Committee may be
influenced by: (a) the scope of the role; (b) experience and personal
performance in the role; (c) average change in total workforce salary; (d)
performance of the Company; (e) any changes in the size and complexity
of the organisation; (f) any changes in market practice; and (g) external
economic conditions, such as inflation
• Periodic account of practice in comparable companies (e.g. those of a
similar size and complexity) may be taken by the Committee
• A flexible pension and benefits allowance is
provided, a portion of which may be invested
into the Executive’s pension
• Executive Directors are also eligible to
participate in any all-employee share plans
operated by the Company, in line with
HMRC guidelines currently prevailing (where
relevant), on the same basis as for other
eligible employees
• In certain circumstances, the Committee
may also approve additional allowances
relating to the relocation of an Executive
Director or other expatriate benefits
(including tax thereon) required to perform
the role
• The Committee may provide other
employee benefits to Executive Directors if
considered appropriate
• The Committee has the ability to reimburse
reasonable business-related expenses and
any tax thereon
• The vesting of awards will be subject to the satisfaction of
performance conditions set by the Committee and measured over a
performance period
• The performance period will normally be of at least one year
• Upon completion of the performance period, the Committee will
deliver a portion of the award in cash and defer the remaining
portion into an award of shares or nil-cost options
• No more than one-third of the total award will be delivered in cash
• Deferred share awards will normally be subject to additional
performance underpin conditions measured over a period of at
least three years running from the end of the performance period
• Normally 62.5% of maximum is payable for target levels of
performance with 25% normally paying for threshold levels
of performance.
• Awards are not pensionable
• Awards are subject to recovery provisions that enable the
Committee to withhold or recover the value of awards within five
years of the grant date/payment where there has been a material
misstatement of accounts, an error in assessing any applicable
performance condition or employee misconduct, a material failure
of risk management, serious reputational damage, a material
corporate failure or any other circumstances that the Board in its
discretion considers to be similar in their nature or effect
• A conditional share award over ordinary shares in the Company
with a value equal to the units in the award. The value of the units
will depend on the plan value on the relevant measurement dates.
• The plan will be funded based on the creation of shareholder
value above share price hurdles as determined by the Committee.
The plan will cease funding at a set share price as considered
appropriate by the Committee. The plan may be funded at
different rates between hurdles if considered appropriate.
Details of the share price hurdles are provided in the Annual
Remuneration Report.
• For Executive Directors, the award will vest (to the extent that the
share price hurdles are met) with a maximum of one-third following
the completion of the performance periods ending 31 March 2027,
31 March 2028 and 31 March 2029 (the measurements dates).
• The level of funding of the plan is subject to a maximum dilution of
5% of the Company’s issued share capital.
• Awards are subject to recovery provisions that enable the
Committee to withhold or recover the value of awards within
three years of each measurement date as set out above, where
there has been a material misstatement of any Group Member’s
financial results, an error in assessing the plan value applicable to
the award or in the information or assumptions on which the award
was granted or vests, a material failure of risk management, fraud
or material financial irregularity in any Group Member or a relevant
business unit, serious reputational damage to any Group Member
or a relevant business unit, serious misconduct or material error
on the part of the Participant, a material corporate failure or a
material safety failure in any Group Member or a relevant business
unit or any other circumstances, which the Board, in its discretion,
considers to be similar in their nature or effect.
Maximum
opportunity
• Whilst no monetary maximum has been set, annual increases will,
generally, be linked to those of the average of the wider workforce
• Increases beyond those awarded to the wider workforce (in percentage
of salary terms) may be awarded in certain circumstances, such as where
there is a change in responsibility or experience or a significant increase
in the scale of the role and/or size, value and/or complexity of the Group,
and where this has also been applied to other employees in similar
circumstances
• The Committee retains the flexibility to set the salary of a new hire at
a discount to the market initially, and implement a series of planned
increases over the subsequent few years, potentially higher than for the
wider workforce, in order to bring the salary to the desired position, subject
to Group and/or individual performance
• Cash allowance with a maximum value of:
– 13% of base salary for the CEO
– 15% of base salary for the CFO
• The Committee has discretion to approve
a higher cost in exceptional circumstances
(such as relocation), or where is it considered
appropriate to provide additional benefits
• Up to 300% of salary for each Executive Director in respect of any
financial year
• The maximum value that an individual can receive from the
scheme is capped at £20m.
Framework
used to assess
performance
• The Committee reviews the salaries of Executive Directors each year
taking due account of all the factors described in how the salary
policy operates
• N/A • Awards are based on performance measures with stretching targets
as set and assessed by the Committee
• Financial measures (e.g. EBITDA, revenue, cash flow) will normally
represent the majority (at least 50%) of the award, with any other
measures representing the balance
• Subject to the above, measures and weightings may change each
year to reflect any YoY changes to business priorities and ensure
they continue to be aligned to the business strategy
• The Committee may, in its discretion, adjust AOIP payouts if it
considers that the formulaic outcome is not reflective of the
underlying financial or non-financial performance of the Group
or the individual performance of the participant over the relevant
period, or that such payout level is not appropriate in the context
of circumstances that were unexpected or unforeseen when the
targets were set. When making this judgement, the Committee may
take into account such factors as it considers relevant. Any use
of discretion will be detailed in the following year’s Annual Report
on Remuneration
• No vesting will occur below a threshold level of performance as set
by the Committee on a year-by-year basis
• Performance will be assessed based on the three-month average
share price at each measurement date versus share price hurdles
determined by the Committee. These share price hurdles have
been disclosed in the Annual Remuneration Report.
• The Committee will have absolute discretion on the vesting of
the awards to override the formulaic outcomes. A framework
of performance measures (revenue growth profitability,
cash, customer satisfaction and employee engagement) will
be used to assess holistic Company performance against
macro-economic factors.
AO World PLC Annual Report and Accounts 202578
Element Base salary Flexible pension and benefits AO incentive plan Value Creation Plan (“VCP”)
Purpose and
link to
strategy
• To aid the recruitment and retention of high-calibre Executive Directors
with the expertise and experience to deliver the Company’s strategy
• To reflect individual experience and expertise
• To provide a fair and appropriate level of fixed basic income
• To provide a competitive flexible benefits
and pension allowance to aid recruitment
and retention of high-calibre Executive
Directors with the expertise and experience
to deliver the Company’s strategy
• To reward the delivery of annual objectives relating to the
business strategy
• Through significant deferral into the Company’s shares to align the
long-term interests of Executive Directors with those of shareholders
• To retain and motivate all of our employees and drive exceptional
value creation over the long term
Operation • Normally reviewed annually, with any increase normally effective on 1 April
(increases may be awarded at different times if considered appropriate by
the Committee)
• Set at a level required to recruit suitable Executive Directors,
reflecting their experience and expertise and in the context of other
comparable positions
• Any subsequent increase determined by the Committee may be
influenced by: (a) the scope of the role; (b) experience and personal
performance in the role; (c) average change in total workforce salary; (d)
performance of the Company; (e) any changes in the size and complexity
of the organisation; (f) any changes in market practice; and (g) external
economic conditions, such as inflation
• Periodic account of practice in comparable companies (e.g. those of a
similar size and complexity) may be taken by the Committee
• A flexible pension and benefits allowance is
provided, a portion of which may be invested
into the Executive’s pension
• Executive Directors are also eligible to
participate in any all-employee share plans
operated by the Company, in line with
HMRC guidelines currently prevailing (where
relevant), on the same basis as for other
eligible employees
• In certain circumstances, the Committee
may also approve additional allowances
relating to the relocation of an Executive
Director or other expatriate benefits
(including tax thereon) required to perform
the role
• The Committee may provide other
employee benefits to Executive Directors if
considered appropriate
• The Committee has the ability to reimburse
reasonable business-related expenses and
any tax thereon
• The vesting of awards will be subject to the satisfaction of
performance conditions set by the Committee and measured over a
performance period
• The performance period will normally be of at least one year
• Upon completion of the performance period, the Committee will
deliver a portion of the award in cash and defer the remaining
portion into an award of shares or nil-cost options
• No more than one-third of the total award will be delivered in cash
• Deferred share awards will normally be subject to additional
performance underpin conditions measured over a period of at
least three years running from the end of the performance period
• Normally 62.5% of maximum is payable for target levels of
performance with 25% normally paying for threshold levels
of performance.
• Awards are not pensionable
• Awards are subject to recovery provisions that enable the
Committee to withhold or recover the value of awards within five
years of the grant date/payment where there has been a material
misstatement of accounts, an error in assessing any applicable
performance condition or employee misconduct, a material failure
of risk management, serious reputational damage, a material
corporate failure or any other circumstances that the Board in its
discretion considers to be similar in their nature or effect
• A conditional share award over ordinary shares in the Company
with a value equal to the units in the award. The value of the units
will depend on the plan value on the relevant measurement dates.
• The plan will be funded based on the creation of shareholder
value above share price hurdles as determined by the Committee.
The plan will cease funding at a set share price as considered
appropriate by the Committee. The plan may be funded at
different rates between hurdles if considered appropriate.
Details of the share price hurdles are provided in the Annual
Remuneration Report.
• For Executive Directors, the award will vest (to the extent that the
share price hurdles are met) with a maximum of one-third following
the completion of the performance periods ending 31 March 2027,
31 March 2028 and 31 March 2029 (the measurements dates).
• The level of funding of the plan is subject to a maximum dilution of
5% of the Company’s issued share capital.
• Awards are subject to recovery provisions that enable the
Committee to withhold or recover the value of awards within
three years of each measurement date as set out above, where
there has been a material misstatement of any Group Member’s
financial results, an error in assessing the plan value applicable to
the award or in the information or assumptions on which the award
was granted or vests, a material failure of risk management, fraud
or material financial irregularity in any Group Member or a relevant
business unit, serious reputational damage to any Group Member
or a relevant business unit, serious misconduct or material error
on the part of the Participant, a material corporate failure or a
material safety failure in any Group Member or a relevant business
unit or any other circumstances, which the Board, in its discretion,
considers to be similar in their nature or effect.
Maximum
opportunity
• Whilst no monetary maximum has been set, annual increases will,
generally, be linked to those of the average of the wider workforce
• Increases beyond those awarded to the wider workforce (in percentage
of salary terms) may be awarded in certain circumstances, such as where
there is a change in responsibility or experience or a significant increase
in the scale of the role and/or size, value and/or complexity of the Group,
and where this has also been applied to other employees in similar
circumstances
• The Committee retains the flexibility to set the salary of a new hire at
a discount to the market initially, and implement a series of planned
increases over the subsequent few years, potentially higher than for the
wider workforce, in order to bring the salary to the desired position, subject
to Group and/or individual performance
• Cash allowance with a maximum value of:
– 13% of base salary for the CEO
– 15% of base salary for the CFO
• The Committee has discretion to approve
a higher cost in exceptional circumstances
(such as relocation), or where is it considered
appropriate to provide additional benefits
• Up to 300% of salary for each Executive Director in respect of any
financial year
• The maximum value that an individual can receive from the
scheme is capped at £20m.
Framework
used to assess
performance
• The Committee reviews the salaries of Executive Directors each year
taking due account of all the factors described in how the salary
policy operates
• N/A • Awards are based on performance measures with stretching targets
as set and assessed by the Committee
• Financial measures (e.g. EBITDA, revenue, cash flow) will normally
represent the majority (at least 50%) of the award, with any other
measures representing the balance
• Subject to the above, measures and weightings may change each
year to reflect any YoY changes to business priorities and ensure
they continue to be aligned to the business strategy
• The Committee may, in its discretion, adjust AOIP payouts if it
considers that the formulaic outcome is not reflective of the
underlying financial or non-financial performance of the Group
or the individual performance of the participant over the relevant
period, or that such payout level is not appropriate in the context
of circumstances that were unexpected or unforeseen when the
targets were set. When making this judgement, the Committee may
take into account such factors as it considers relevant. Any use
of discretion will be detailed in the following year’s Annual Report
on Remuneration
• No vesting will occur below a threshold level of performance as set
by the Committee on a year-by-year basis
• Performance will be assessed based on the three-month average
share price at each measurement date versus share price hurdles
determined by the Committee. These share price hurdles have
been disclosed in the Annual Remuneration Report.
• The Committee will have absolute discretion on the vesting of
the awards to override the formulaic outcomes. A framework
of performance measures (revenue growth profitability,
cash, customer satisfaction and employee engagement) will
be used to assess holistic Company performance against
macro-economic factors.
AO World PLC Annual Report and Accounts 2025 79
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Historic arrangements
The Committee reserves the right to make any
remuneration payments and/or payments for
loss of office (including exercising any discretion
available to it in connection with such payments)
notwithstanding that they are not in line with the
Policy where the terms of the payment were agreed:
(i) before 17 July 2014 (the date the Company’s first
shareholder-approved Directors’ remuneration
policy came into effect); (ii) before the Policy came
into effect, provided that the terms of the payment
were consistent with the remuneration policy
in force at the time they were agreed; (iii) where
otherwise approved by shareholders; or (iv) at a time
when the relevant individual was not a Director of the
Company and, in the opinion of the Committee, the
payment was not in consideration for the individual
becoming a Director of the Company. For these
purposes, “payments” includes the Committee
satisfying awards of variable remuneration and,
in relation to an award over shares, the terms of
the payment are “agreed” at the time the award
is granted.
Terms of the AO Incentive Plan
Awards under the AO Incentive Plan, may:
a. be granted as conditional share awards or nil-cost
options or in such other form that the Committee
determines has the same economic effect;
b. have any performance condition or underpin
applicable to them amended or substituted by
the Committee if an event occurs that causes
the Committee to determine an amended or
substituted performance condition or underpin
would be more appropriate and not materially
less difficult to satisfy;
c. incorporate the right to receive an amount (in
cash or additional shares) equal to the value of
dividends, which would have been paid on the
shares under a share-based award that vest
up to the time of vesting. This amount may be
calculated assuming that the dividends have
been reinvested in the Company’s shares on a
cumulative basis;
d. in respect of the portion of the award granted
in shares, be settled in cash at the Committee’s
discretion (it is intended that this provision would
only be used for Executive Directors where it is not
possible to settle share portion of the award in
shares due to regulatory or legal reasons); and
e. be adjusted in the event of any variation of the
Company’s share capital or any demerger,
delisting, special dividend or other event that may
materially affect the Company’s share price.
The Committee also retains the discretion within
the Policy to adjust performance targets and/
or set different performance measures and
alter weightings if events happen that cause it to
determine that the conditions are unable to fulfil
their original intended purpose.
Choice of performance measures and
approach to target setting
The performance metrics and targets that are
set for the Executive Directors via the AO Incentive
Plan are carefully selected to align closely with the
Company’s strategic plan.
The AO Incentive Plan is determined on the basis
of performance against specific performance
indicators and strategic objectives set annually. The
precise metrics chosen, along with the weightings of
each, may vary in line with the Company’s evolving
strategy from year to year. The Committee will
review the performance measures and targets each
year and vary them, as appropriate, to reflect the
priorities for the business in the year ahead.
Where possible, the Committee will disclose the
targets for each of the Executive Directors’ awards in
advance in the Annual Report on Remuneration, but
targets will generally be disclosed retrospectively
where they are considered to be commercially
sensitive. The Committee will review the choice of
performance measures and the appropriateness of
the performance targets prior to each performance
year and will consult with major shareholders in the
event of any significant proposed change.
Challenging targets are set whereby modest
rewards are payable for the delivery of threshold
levels of performance, rising to maximum rewards
for the delivery of substantial out-performance of
our financial and operating plans.
Financial measures normally comprise at least half
of the measures, to provide the Committee with the
flexibility to incentivise management to drive some
fundamental strategic initiatives.
Share ownership guidelines
The Committee’s Policy is to have formal
shareholding guidelines for the Executive Directors,
which create alignment between their interests and
those of shareholders.
Executive Directors are expected to build a
minimum shareholding of 200% of salary. Where
the holding is not already attained, it is expected
to be achieved through retention of at least 50% of
shares or the vesting of awards (on a net of tax basis)
from share plans.
Post-cessation of office
ownership guidelines
Executive Directors are normally expected to
maintain a minimum shareholding of 200% of
salary (or actual shareholding if lower) for two years
following departure from the Board. The Committee
retains discretion to waive this guideline if it is
not considered to be appropriate in the specific
circumstance.
AO World PLC Annual Report and Accounts 202580
Differences in remuneration policy
for Executive Directors compared to
other employees
The Committee has regard to pay structures across
the wider Group when setting the remuneration
policy for Executive Directors. The Committee
considers the general basic salary increase for the
broader workforce when determining the annual
salary review for the Executive Directors.
Overall, the remuneration policy for the Executive
Directors is more heavily weighted towards
performance-related pay than for other employees.
In particular, performance-related incentives
are, generally, not provided outside of senior
management as they are reserved for those
considered to have the greatest potential to
influence overall levels of performance. That said,
whilst the use of the AO Incentive Plan is confined
to the senior managers in the Group, the Company
is committed to widespread equity ownership. It
has historically rolled out, and intends in the future
to roll out, an all-employee SAYE scheme on an
annual basis, in which Executive Directors are eligible
to participate on a consistent basis to all other
employees. Further, as noted above, the VCP extends
to all employees who joined prior to 1 April 2025.
The level of performance-related pay varies within
the Group by grade of employee, but, in general, the
Policy is applied consistently across each grade of
the senior management population.
Reward scenarios
Under the Policy, a significant proportion of
remuneration received by Executive Directors is
variable and dependent on the performance of the
Company. The following charts illustrate how the
total pay opportunities for the Executive Directors
vary under three different performance scenarios:
below target, on- target and maximum, based on
the implementation of the AO Incentive Plan for the
year ahead.
CEO
£0k
£500k
£1,000k
£1,500k
£2,000k
£2,500k
£3,000k
£630k
100% 38%
21%
27%
24%
22%
19%
39%
19%
48%
42%
Below
Threshold
Target Maximum Maximum
+50% share
price growth
£1,674k
£2,301k
£2,858k
CFO/COO
0
£500k
£1,000k
£1,500k
£2,000k
£2,500k
£546k
100% 38%
21%
28%
24%
22%
19%
39%
19%
48%
41%
Below
Threshold
Target Maximum Maximum
+50% share
price growth
£1,437k
£1,971k
£2,500k
Fixed pay AOIP - cash
AOIP – deferred shares Share price growth
Assumptions:
• Below threshold = fixed pay only (i.e. basic salary
and flexible benefits)
• Target = fixed pay plus 62.5% of maximum
AOIP payout
• Maximum = fixed pay plus 100% of maximum
AOIP payout
• Maximum + 50% share price growth = fixed pay
plus 100% of maximum AOIP payout, with 50%
share price appreciation applied to the deferred
shares delivered through the AOIP
• Fixed pay includes the base salaries for each
Executive Director applying on 1 April 2025 and
FY26 flexible benefit allowance
• Maximum AOIP Award is equivalent to 300%
of salary. In addition, the Executive Directors
also participate in the 2022 VCP, which gives
participants the opportunity to share in the
value created above a pre-determined share
price hurdle. The value of any vested award will
be dependent on the Company’s share price
and performance relative to the targets set.
Awards for Executive Directors vest in three
equal tranches (with five, six and seven-year
performance periods, ending in 2027, 2028 and
2029, respectively), with the total maximum
payable capped at £20m for each Executive
Director. The VCP is not included in the scenario
charts above.
AO World PLC Annual Report and Accounts 2025 81
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Service contracts, and loss-of-office
payments
Service contracts normally continue until the
Executive Director’s agreed retirement date or such
other date as the parties agree. The Company’s
policy is that Executive Directors’ service contracts
must provide that no more than six months’ notice
to terminate employment (by either party) must
be given. However, incumbent Executive Directors’
service contracts are subject to 12 months’ notice to
terminate in line with the historic policy.
A Director’s service contract may be terminated
without notice and without any further payment
or compensation, except for sums earned up to
the date of termination, on the occurrence of
certain events such as gross misconduct. The
circumstances of the termination (taking into
account the individual’s performance) and an
individual’s duty and opportunity to mitigate
losses are taken into account by the Committee
when determining amounts payable on/following
termination. Our Policy is to reduce compensatory
payments to former Executive Directors where
they receive remuneration from other employment
during the notice period. The Committee will
consider the particular circumstances of each
leaver on a case-by-case basis and retains flexibility
as to at what point, and the extent to which,
payments would be reduced. The Committee may
make any other payments in connection with a
Director’s cessation of office or employment where
the payments are made in good faith in discharge of
an existing legal obligation (or by way of damages
for the breach of such an obligation) or by way of
settlement of any claim arising in connection with
the cessation of a Director’s office or employment.
Any such payments may include, but are not limited
to, paying any fees for outplacement assistance
and/or the Director’s legal and/or professional
advice fees in connection with their cessation of
office or employment. Details will be provided
in the relevant Annual Report on Remuneration
should such circumstances arise. In summary, the
contractual provisions are as follows:
Provision Detailed items
Notice
period
12 months from both the Company
and incumbent Executive Directors.
Six months for newly appointed
Executive Directors
Termination
payment
Payment in lieu of notice of 115% of base
salary, which is calculated to cover
the value of contractual benefits and
pension, normally subject to mitigation
and paid monthly*
In addition, any statutory entitlements
would be paid as necessary
Change of
control
There will be no enhanced provisions on
a change of control
* The Committee may elect to make a lump sum termination
payment (up to a maximum of 12 months’ base salary and
contractual benefits as part of an Executive Director’s termination
arrangements where it considers it appropriate to do so.
Termination provisions
AO Incentive Plan
Any cash or share entitlements granted under the
AO Incentive Plan will be determined on the basis
of the relevant plan rules. During the vesting period,
the default position is that where the Executive
Director leaves due to ill health, injury or disability,
or the sale of their employing company or business
out of the Group, the “leaving” Executive Director
will be deemed to be a good leaver. In all other
circumstances (unless the Committee has exercised
its discretion), the “leaving” Executive Director will
be classed as a bad leaver and any outstanding
awards and unvested share awards will lapse
immediately when the Executive Director ceases to
be employed by, or to hold office with, the Group.
If deemed by the Committee to be a “good” leaver:
f. during the performance period, awards will
ordinarily continue to be satisfied in accordance
with the rules of the plan; and
g. during the vesting period, deferred share awards
will ordinarily continue to vest on the date when
they would have vested as if the leaver had not
ceased to be a Group employee or Director.
The extent to which awards may be satisfied
and deferred share awards may vest in these
circumstances will be determined by the
Committee, taking into account the satisfaction of
any relevant performance or underpin conditions
measured over the original performance period.
Unless the Committee decides otherwise, any
outstanding awards will also be reduced to take into
account the proportion of the performance period
that has elapsed on the individual’s cessation of
office or employment.
However, the Committee retains discretion to allow
awards to be satisfied and deferred share awards
to vest as soon as reasonably practicable after the
individual’s cessation of office or employment. If the
participant ceases to hold office or employment
prior to the satisfaction of an award, the Committee
may also decide to satisfy awards entirely in cash,
rather than delivering a deferred share award to the
Executive Director.
If a participant dies, unless the Board decides
otherwise, their outstanding awards will be satisfied
and deferred share awards will vest as soon as
reasonably practicable after the date of their death
on the basis set out for other “good leavers” above.
Value creation plan
Awards normally lapse on cessation of employment.
The Committee will have discretion to allow awards
to vest in exceptional circumstances as considered
appropriate. Awards may be pro-rated for the
proportion of the performance period completed.
AO World PLC Annual Report and Accounts 202582
Approach to recruitment and promotions
The remuneration package for any new Executive
Director would be set in accordance with the terms
of the Company’s approved Policy in force at the
time of appointment. In addition, with specific
regard to the recruitment of new Executive Directors
(whether by external recruitment or internal
promotion), the Policy will allow for the following:
• Where new joiners or recent promotions have been
given a starting salary at a discount to the mid-
market level, a series of increases above those
granted to the wider workforce (in percentage of
salary terms) may be awarded over the following
few years, subject to satisfactory individual
performance and development in the role.
• An initial award granted to any new Executive
Director under the AO Incentive Plan would
operate in accordance with the terms of
the Policy. The opportunity would normally
be pro-rated for the period of employment,
unless the Committee determined otherwise.
Depending on the timing and responsibilities
of the appointment, it may be necessary to set
different performance measures and targets in
the first year.
• The Committee may also offer additional cash
and/or share-based elements when it considers
these to be in the best interests of the Company
and shareholders. Any such additional payments
would normally be based solely on remuneration
relinquished when leaving the former employer
and would reflect (as far as possible) the nature
and time horizons attaching to that remuneration
and the impact of any performance conditions.
Replacement share awards, if used, will be
granted using the Company’s existing share
plans to the extent possible. Awards may also
be granted outside of the Company’s existing
incentive arrangements if necessary and as
permitted under the Listing Rules. Shareholders
will be informed of any such payments at the time
of appointment.
• Any new Executive Director may participate in the
all-employee AO Value Creation Plan
• For an internal Executive appointment, any
variable pay element awarded in respect of the
former role would be allowed to pay out according
to its terms, adjusted as relevant to take into
account the appointment. In addition, any other
ongoing remuneration obligations existing prior
to appointment would continue.
• For external and internal appointments, the
Committee may agree that the Company will
meet certain relocation expenses as appropriate.
For the appointment of a new Chair or Non-
Executive Director, the fee arrangement would be
set in accordance with the approved fee structure
policy in force at that time.
Changes of control provisions
AO Incentive Plan
Awards will be satisfied and deferred share awards
will vest taking into account the extent to which
the performance and/or underpin conditions
have been satisfied. In these circumstances, the
Committee may determine that any outstanding
awards are settled in cash, rather than delivering
a deferred share award. Unless the Committee
determines otherwise, outstanding awards will also
be reduced to take into account the proportion
of the performance period that has elapsed. If
the Company is wound up or there is a demerger,
delisting, special dividend or other event, which, in
the Committee’s opinion, may materially affect the
Company’s share price, the Committee may allow
awards to be satisfied and deferred share awards to
vest on the same basis as a takeover.
Value Creation Plan
Awards will vest based on the value of the plan at the
relevant date and any other factors as the Board
considers relevant. In these circumstances, the
Committee may determine that any outstanding
awards are settled in cash.
Chair and Non-Executive Directors’ letters
of appointment
The Chair and Non-Executive Directors do not
have service contracts with the Company, but,
instead, have letters of appointment. The letters
of appointment are usually renewed every three
years but may be renewed on an annual basis
where deemed appropriate. Termination of the
appointment may be earlier at the discretion of
either party on three months’ written notice. None
of the Non-Executive Directors are entitled to any
compensation if their appointment is terminated.
Appointments will be subject to re-election at
the AGM.
AO World PLC Annual Report and Accounts 2025 83
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Non-Executive Directors’ fees
The Non-Executive Directors’ fees policy is described below:
Element Purpose and link to strategy Fees
To recruit
and retain
high-calibre
Non-Executive
Directors
Fees are determined by the Board, with Non-Executive Directors
abstaining from any discussion or decision in relation to their fees.
Non-Executive Directors are paid an annual fee and do not
participate in any of the Company’s incentive arrangements or
receive any pension provision.
The Chair is paid a consolidated all-inclusive fee for all
Board responsibilities.
The Non-Executive Directors receive a basic Board fee, with
additional fees payable for chairing the Audit, Nomination
and Remuneration Committees and for performing the Senior
Independent Director role with additional fees payable for
committee membership.
Additional fees may be paid to reflect additional Board or
Committee responsibilities as appropriate.
The fee levels are reviewed on a periodic basis, with reference to the
time commitment of the role and market levels in companies of
comparable size and complexity.
Non-Executive Directors shall be entitled to have reimbursed all
fees (including travel expenses) that they reasonably incur in the
performance of their duties. The Company may meet any tax
liabilities that may arise on any such expenses.
Additional non-significant benefits may be introduced if
considered appropriate.
There is no cap on fees. Non-
Executive Directors are eligible
for fee increases during the
three-year period that the
remuneration policy operates
to ensure they continue to
appropriately recognise the
time commitment of the role,
increases to fee levels for Non-
Executive Directors in general
and fee levels in companies of a
similar size and complexity.
AO World PLC Annual Report and Accounts 202584
Annual Report on Remuneration
The Annual Remuneration for FY25 was structured within the framework of the remuneration policy adopted by shareholders at
2022 AGM and has been implemented accordingly. This will be put to an advisory vote at the Company’s AGM in September.
Single figure of total remuneration for FY25 (Audited)
The audited table below shows the aggregate emoluments earned by the Directors of the Company in respect of FY25
being the period 1 April 2024 to 31 March 2025 and, for comparison, the amounts earned in respect of FY24, being the period
1 April 2023 to 31 March 2024.
Salaries
and fees
Benefits
(exc
pension)
(1)
Pension
(1)
Total
fixed
AOIP
cash
(2)
AOIP
Deferred
shares
(3)
Total
variable Total
£ £ £ £ £ £ £
Executive Directors
John Roberts FY25 546,174 65,836 4,000 616,010 422,193 353,827 776,020 1,392,030
FY24 510,427 63,150 4,000 577,577 503,791 460,200 963,991 1,541,568
Mark Higgins FY25 400,500 49,907 10,000 460,407 309,587 266,895 576,482 1,036,889
FY24 385,097 47,602 10,000 442,699 380,091 347,134 727,225 1,169,924
Chairman
Geoff Cooper FY25 210,000 0 0 210,000 0 0 0 210,000
FY24 200,000 0 0 200,000 0 0 0 200,000
Non-Executive Directors
Christopher Hopkinson FY25 59,000 0 0 59,000 0 0 0 59,000
FY24 57,000 0 0 57,000 0 0 0 57,000
Shaun McCabe FY25 76,000 0 0 76,000 0 0 0 76,000
FY24 72,000 0 0 72,000 0 0 0 72,000
Peter Pritchard FY25 78,000 0 0 78,000 0 0 0 78,000
FY24 64,500 0 0 64,500 0 0 0 64,500
Sarah Venning FY25 67,000 0 0 67,000 0 0 0 67,000
FY24 57,000 0 0 57,000 0 0 0 57,000
Total FY25 1,436,674 115,743 14,000 1,566,417 731,779 620,723 1,352,502 2,918,919
Total
(4)
FY24 1,346,024 110,752 14,000 1,470,776 883,882 807,334 1,691,216 3,161,992
1
From 1 October 2022 (FY23), the Group introduced a flexible benefits scheme for the Executives and other senior management. Pension contributions
amounts show the total amount each Executive contributed to the pension from their flexible benefit allowance, with the balance of the flexible benefits
allowance shown under benefits.
2
Each of John Roberts and Mark Higgins were granted an award under the AO Incentive Plan of 300% of salary for the performance period of FY25.
Following partial attainment of the performance conditions 77.3% of the maximum award has vested of which one-third will be paid in cash with the
remaining two-thirds of value payable in the form of a deferred share award. The deferred share options will vest in July 2028 subject to continued
employment and attainment of the performance underpin. As per the revised policy being put to shareholders, Executives will no longer be required to
hold awarded shares for a further year. The value disclosed above relates to the cash portion of the FY25 award only, with the share portion due to be
disclosed in the FY28 single figure.
3
Each of John Roberts and Mark Higgins were granted a conditional deferred share award pursuant to the FY22 AOIP Award of 358,435 and 270,371
shares respectively, which had a deferral period spanning FY23 to FY25, inclusive, and which, at the point of grant, had a value of £143,374 and £108,148,
respectively. The Remuneration Committee has deemed that the performance underpin has been met in full and, accordingly, 358,435 and 270,371
shares will be issued to John and Mark in June 2025. For the purpose of the single-figure calculations, these awards have been valued based on the three-
month average share price to 31 March 2025 of 98.7p. The share price used to determine the award in July 2022 was £0.40. Of the value disclosed, £210,453
for John and £151,852 for Mark is attributable to share price growth. For the deferred share option value for FY24 reported for both John and Mark, in
the previous report, we used an estimate of 90.26p (being the 3-month average share price to 31 March 2024); when the option became exercisable on
8 July 2024, the actual share price was 118.00p and the values in the single figure above have been adjusted accordingly.
4
The totals for FY24 published differ from that reported last year as the Group have not taken into account remuneration paid to Marisa Cassoni, who
retired part way through FY24.
AO World PLC Annual Report and Accounts 2025 85
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Details of variable pay earned in FY25 (Audited)
AO Incentive Plan FY25 Award
John Roberts and Mark Higgins both participated in the AO Incentive Plan (which combines a cash award and deferred share
award) under which they could receive an award of up to 300% of salary, for the year-ended 31 March 2025. The targets for the
AO Incentive Plan Award were weighted towards financial metrics (70%), with the remaining 30% subject to the achievement of
strategic objectives, as set out below. The following table sets out the targets, actual performance against these targets and,
accordingly, the applicable payout for the FY25 AO Incentive Plan Award.
Measure (weighting) Targets
% payout (for
this element)
Performance
achieved Award
LFL Adjusted Profit Before Tax (45%)
1
Threshold £30.6m 25% £45.2m 43.3%
On target £38.3m 62.5%
Stretch £46.0m 100%
LFL Revenue (15%)
1
Threshold £1,091m 25% £1,108m 5.6%
On target £1,143m 62.5%
Stretch £1,195m 100%
Average Daily Cash (10%)
1
Threshold £31.2m 25% £48.3m 10%
On target £36.7m 62.5%
Stretch £42.2m 100%
Customer Trustpilot (10%)
2
Threshold 4.6 25% 4.9 10%
On target 4.7 62.5%
Stretch 4.8 100%
Employee Index Score (5%)
3
Threshold 75 25% 81 3.5%
On target 80 62.5%
Stretch 85 100%
Strategic – development of employee talent (5%)
Committee
judgement 5 5%
Strategic – development of the Mobile business (10%)
Committee
judgement 0 0%
Total 77.3%
1
Any revenue, profit/loss and cash derived from the musicMagpie business since the date of acquisition (12 December 2024) has been excluded from the
results shown here as when the targets were set the acquisition was not in contemplation. Similarly, average daily cash has also been adjusted to exclude
the consideration paid for the musicMagpie acquisition (including fees) as well as the repayment by AO of the amounts outstanding on musicMagpie’s
RCF at the acquisition date. In addition, average daily cash is also adjusted for the £11m gifted to the EBT in the year to enable the purchase of AO shares
in the market as, again, this was not foreseen when budgets were set, but was agreed to be in the best interests of the Company. Further the impairment
charge relating to the mobile cash generating unit has been excluded from the results shown here, as approved by the remuneration committee.
2
This is the Trustpilot score for ao.com.
3
This is the average Employee Index Score taken across the three surveys conducted in the year.
Performance against financial targets
As is covered in the CFO/COO report on pages 14 to 21, the Group continued to focus on profitable growth this year and
performance has been pleasing against those targets with near stretch targets being met for the LFL adjusted PBT and cash
metrics. The Revenue outturn was 5.6% (out of 15%), despite c.7% growth YoY reflecting the stretching nature of the targets set
by the Committee.
Accordingly, 58.8% of the award relevant to financial targets (of the possible 70%) has been met.
AO World PLC Annual Report and Accounts 202586
Performance against strategic targets
Customer satisfaction
The Committee is delighted that customer satisfaction, measured via Trustpilot, has remained strong over the year. For
ao.com, we have improved our Trustpilot score to 4.9 out of 5 based on over 700,000 customer reviews .This score is market
leading and an excellent achievement by the team during the year. Accordingly, the Committee has determined that this
performance condition has been met in full.
Engagement Index Score
Three employee surveys have been conducted in-house during FY25, which assessed our Engagement Index Score. The first
was conducted in June 2024, which resulted in a score of 82, the second in September 2024, which resulted in a score of 81 and a
third in January 2025, which gave a score of 80. The average of these three scores is 81, which translates that engagement at AO
is regarded as Very Good. Accordingly, the Committee has determined that this performance condition vested in line with the
formulaic approach at 3.5% (out of 5%).
Strategic transformation
In relation to the first strategic transformation measure, the Committee was pleased with the work done to develop employee
talent, with three phases of work (establishing a leadership skills framework, updating value chains and capabilities, and
working with external consultants to challenge the value chains and capabilities and identify gaps) undertaken during the
year with a fourth phase (implementing prioritised capability roadmaps) continuing into the next financial year. Accordingly,
the Committee has determined that this performance condition has been met in full (5% out of 5%). In relation to the second
strategic transformation measure, the Committee and the Executives agreed that, despite progress in many areas of the
Mobile business, due to the continued decline in the post-pay market, the performance condition had not been met and it
vested as to 0% (out of 10%).
In total, therefore, we have awarded 77.3% of the maximum award to our Executive Directors.
Max
opportunity
(% salary)
Outcome %
max
Cash award
(1/3rd)
1
Share award
(2/3rd)
2
CEO 300% 77.3% £422,193 £844,385
CFO 300% 77.3% £309,587 £629,173
1
The cash element will be paid in June/July 2025.
2
The share award will be granted post-AGM, in September 2025, by way of nil-cost options, which will vest after a period of three years subject to the
performance of the business until the completion of our financial year-ending 31 March 2028 as well as the Executive’s continued employment.
Release of shares under the FY22 AOIP Award
Each of John Roberts and Mark Higgins were granted a conditional deferred share award pursuant to the FY22 AOIP Award,
which had a deferral period spanning FY23 to FY25, inclusive, and which, at the point of grant, had a value of £143,374 and
£108,148, respectively. These awards were subject to a performance underpin based on overall business performance (both
operational and strategic) over the vesting period, which was assessed by the Committee following the end of FY25. The
Remuneration Committee has deemed that the performance underpin has been met in full given the profitable growth during
the vesting period and, accordingly, the share awards should vest in full. Accordingly, nil-cost options over 358,435 and 270,371
shares for John and Mark will vest following the announcement of our FY25 results, but remain subject to a further one-year
holding period post-vesting.
For the purpose of the single-figure calculations, these awards have been valued based on the three-month average share
price to 31 March 2025 of 98.71p. The share price used to determine the award in July 2022 was 40.00p. Of the value disclosed,
£210,453 for John and £151,852 for Mark is attributable to share price growth.
AO World PLC Annual Report and Accounts 2025 87
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Percentage change in remuneration levels
The table below shows the movement in the salary, benefits and cash element of the AO Incentive Plan Award for each Director
between the financial year ended 31 March 2025 and the previous three financial years compared to that for the average
employee of the Company – AO World PLC – (but not the wider Group). For the benefits and bonus/Incentive Award (cash
element) per employee, this is based on those employees eligible to participate in such schemes.
FY25 vs FY24 FY24 vs FY23 FY23 vs FY22 FY22 vs FY21
Salary
1
Taxable
benefits
2
AOIP cash
element
3
Salary
1
Taxable
benefits
2
AOIP cash
element
3
Salary
1
Taxable
benefits
2
AOIP
cash
element
3
Salary
1
Taxable
benefits
2
AOIP
cash
element
3
John
Roberts 7% 4% -16% 4% 4.7% 29% 3% 2.0% 445% 2.7% 4.3% -84%
Mark
Higgins 4% 4% -19% 4% 6.1% 29% 3% 10.8% 429% 2.7% 1.1% -84%
Geoff
Cooper 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Chris
Hopkinson 14.04% 0% 0% 3.60% 0% 0% 0% 0% 0% 0% 0% 0%
Shaun
McCabe 5.56% 0% 0% -4% 0% 0% 36.6% 0% 0% 0% 0% 0%
Peter
Pritchard 24.03% 0% 0% 17.27% 0% 0% 36.6% 0% 0% 0% 0% 0%
Sarah
Venning
21.05% 0% 0% 3.64% 0% 0% 36.6% 0% 0% 0% 0% 0%
Other
employees
(AO
World PLC) 0.04% -0.5% -19% 8.15% -1.8% 18.1% 8.25% 27.6% 8% -1.1% 7.4% 221%
1
Reflects the average change in pay for employees, calculated by reference to the aggregate remuneration for all employees of AO World PLC in each
year divided by the number of employees.
2
As covered elsewhere in this report, there are no changes to benefit entitlements per se for employees or Executives; however, we did introduced a flexible
benefit scheme part way through FY23, which gives Executives a “benefit allowance” that they can spend on a choice of benefits. The allowance has been
calculated based on the costs of the provision of benefits to which they were entitled (whether they had chosen to take that benefit or not).
3
The percentage change in the AO Incentive Plan Award cash element for “other employees” is calculated by looking at the average amount participants
in the scheme in a financial year received in cash, compared to the cash element participants in the AO Incentive Plan, are expected to receive relating to
the following financial year, in each case, excluding Executive Directors.
AO World PLC Annual Report and Accounts 202588
Performance graph and pay table
The chart below shows the Company’s TSR performance against the performance of the FTSE 250 Index from 31 March 2015 to
31 March 2025. This index was chosen as it represents a broad equity market index, of which AO is a constituent, which includes
companies of a broadly comparable size and complexity.
Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 24 Mar 25Mar 23
180
160
140
120
100
80
60
40
20
0
Key
AO World PLC
FTSE 250
Total remuneration of CEO
The table below shows the total remuneration figure for the Chief Executive during the financial years ended 31 March 2016 to
31 March 2025. The total remuneration figure includes the annual bonus payable for performance in each of those years up
to FY19 and, from FY19, the cash element of the AOIP. The total remuneration figure for FY23, FY24 and FY25 also includes the
value of vested options under the AOIP.
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
Total remuneration (£’000) 588* 575# + 781# 551* + 733* 977* 611* 1,132* 1,542* 1,392*
Annual bonus (% of maximum) 10% 10% 37.5% – – – – – –
AO Incentive Plan Award (% of maximum) – – – 50.5% 47.8% 97.5% 15% 79.3% 98.7% 77.3%
PSP vesting (% of maximum) – – – 8.59% – – – – –
* John Roberts, # Steve Caunce, + Figures calculated for full year pro-rata
AO World PLC Annual Report and Accounts 2025 89
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Relative importance of the spend on pay
The table below shows the movement in spend on staff costs versus that in distributions to shareholders.
FY24 FY25 % change
Staff costs
1
£115.5m £125.9m 9%
Distributions to shareholders
No distributions were made to shareholders in
FY24 or FY25
1
Includes base salaries, social security and pension, and share-based payment charges.
CEO pay ratio
The table below shows the ratio of the single total figure of remuneration (“STFR”) of the CEO to the equivalent pay for the 25th,
50th and 75th percentile employees (on a full-time equivalent basis).
Yea r Method
P25 25th
percentile
pay ratio
P50 50th
percentile
pay ratio
P75 75th
percentile
pay ratio
FY25 Option A 51:1 43:1 33:1
FY24 Option A 56:1 48:1 35:1
FY23 Option A 46:1 40:1 29:1
FY22 Option A 27:1 23:1 16:1
FY21 Option A 46:1 37:1 26:1
FY20 Option A 35:1 28:1 20:1
Notes:
1
Of the three calculation approaches available in the regulations, we have chosen Option A as we believe it to be the most appropriate and statistically
accurate means of identifying the median, lower and upper quartile employees.
2
The single total figure of remuneration of all AOers employed by the Group for FY25 was calculated and ranked using 2024/25 P60 and P11D data,
employer pension contributions and payments under the Company share schemes, in line with the reporting regulations. The total remuneration for
FY25 for the employees identified at P25, P50 and P75 is £27,319, £32,239, and £42,450 respectively. The base salary in respect of FY25 for the employees
identified at P25, P50 and P75 is £24,536, £24,097 and £28,343 respectively.
3
FY25 payments to the wider employee base referred to above include the FY24 cash element of the FY24 AOIP payment, which was paid in FY25, but for
the CEO, we have used the single total figure value, which includes the FY25 AOIP cash payment to be paid in early FY26, but which relates to the FY25
performance.
4
Part-time colleagues’ earnings have been annualised on a full-time equivalent basis. In-year joiners’ earnings were also annualised on the same full-time
equivalent basis.
These ratios form part of the information provided to the Committee on broader employee pay practices to inform
remuneration decisions for Executive Directors and senior management. As noted in the policy section, the Company’s
principles for making pay decisions for our Executives are the same as for the wider workforce, reflecting our pay philosophy; a
fair and attractive reward package, market competitive in the context of the relevant talent market and differentiated by the
level of value creation.
The ratios, therefore, reflect the different remuneration arrangements between our warehouse and call centre employees
at one end, and our senior Executives whose roles require them to focus on long-term value and alignment with shareholder
interests at the other.
Given a significant proportion of the CEO’s total remuneration is variable and linked to the AOIP, the decrease in the pay ratio
this year compared to last is influenced by the AOIP outcome (which has vested at 77.3% for FY25 vs 98.7% in the prior year for
the CEO).
For the reasons given above and AOIP outcomes, the Company believes that the ratio is consistent with the pay, reward and
progression policies across the Group.
AO World PLC Annual Report and Accounts 202590
Payments to past Directors and loss-of-office payments (Audited)
There were no payments to past Directors or loss of office payments made in the year-ended 31 March 2025.
External appointments
No fees were received by Executive Directors for external appointments during the year-ended 31 March 2025.
Directors’ shareholdings and share interests (Audited)
Directors’ shareholdings as at 31 March 2025 are set out below.
During the year under review, no options were exercised by either of the Executive Directors, save as disclosed in Note 4 below.
There have been no changes to Directors’ shareholdings during the period from 1 April 2025 to the date of this report, save for a
sale of 1,000,000 shares by John Roberts on 16 April 2025 and the sale by the Jolly Foundation (a charitable trust of which John is
a trustee) of a further 1,395,000 shares between 1 May 2025 and 15 May 2025.
Directors’ shareholdings
Shares held
beneficially
at 31 March
2025
1
Target
shareholding
guidelines
(% of salary)
2
Target
shareholding
achieved PSP options
3
AOIP share
awards
4
SAYE
options
5
Geoff Cooper 154,274 N/A N/A N/A N/A N/A
John Roberts 96,043,526 200% Yes 43,153 2,845,799 33,962
Mark Higgins 265,066 200% No NIL 1,365,454 33,962
Chris Hopkinson 22,280,429 N/A N/A N/A N/A N/A
Shaun McCabe NIL N/A N/A N/A N/A N/A
Peter Pritchard 93,517 N/A N/A N/A N/A N/A
Sarah Venning NIL N/A N/A N/A N/A N/A
1
Excludes shares held by connected persons and, for Chris Hopkinson, it excludes 1,999,999 shares held by a pension fund of which Chris is one of the
beneficiaries but not the sole beneficiary and, for John Roberts, it excludes 5,442,115 shares held by a charitable trust of which John Roberts and his
spouse Sally Roberts are each a trustee, member and director. During the year: John Roberts gifted 1,360,000 shares to charity on 3 April 2024; John
Roberts sold 6,000,000 shares on 1 August 2024; John Roberts gifted a further 1,600,000 shares to charity on 24 October 2024; Sally Roberts, a connected
person of John Roberts, sold 882,350 shares on 1 August 2024. Mark Higgins sold 41,165 shares on 15 July 2024; and Chris Hopkinson sold 2,000,000 shares
on 1 August 2024.
2
Comprises shares held beneficially only (and excludes options).
3
For John Roberts, these PSP options relate to the 2016 PSP award that have vested but have yet to be exercised.
4
For John Roberts, conditional awards over 284,900 shares were awarded in July 2020 as part of the AOIP FY20 award (based on a share price of £1.51),
which vested in July 2023 but have yet to be exercised. Conditional awards over 390,000 shares were awarded in July 2021 as part of the AOIP FY21 award
(based on a share price of £2.32), which vested in June 2024 but have yet to be exercised. Conditional awards over 358,435 shares were awarded in July
2022 as part of the AOIP FY22 award (based on a share price of £0.40), which will vest in July 2025 (and then be subject to an additional one year holding
period). Options over 918,900 shares were awarded in July 2023 as part of the AOIP FY23 award (based on a share price of £0.85), which will vest in July
2026 subject to the attainment of the performance underpin and continued employment (and then be subject to an additional one-year holding period).
Options over 893,564 shares were awarded in July 2024 as part of the AOIP FY24 award (based on a share price of £1.1276), which will vest in July 2027
subject to the attainment of the performance underpin and continued employment (and then be subject to an additional one-year holding period).
For Mark Higgins, conditional awards over 215,258 shares were awarded in July 2020 as part of the AOIP FY20 award (based on a share price of £1.51), which
vested in July 2023, half of which were exercised and sold, and half of which have been retained. Conditional awards over 294,181 shares were awarded
in July 2021 as part of the AOIP FY21 award (based on a share price of £2.32), which were released in July 2024 with half exercised and sold. Conditional
awards over 270,371 shares were awarded in October 2022 as part of the AOIP FY22 award (based on a share price of £0.40), which will vest in July 2025
(and then be subject to an additional one-year holding period). Options over 693,273 shares were awarded in July 2023 as part of the AOIP FY23 award
(based on a share price of £0.85), which will vest in July 2027 subject to the attainment of the performance underpin and continued employment. Options
over 674,157 shares were awarded in July 2024 as part of the AOIP FY24 award (based on a share price of £1.1276), which will vest in July 2027 subject to the
attainment of the performance underpin and continued employment (and then be subject to an additional one-year holding period).
All AOIP share awards have been converted to options over the relevant number of shares, which, upon vesting, will be capable of being exercised by the
Executives in accordance with scheme rules.
5
Each of John Roberts and Mark Higgins entered into three-year SAYE contracts, under which options over 33,962 shares were granted on 1 March 2023.
AO World PLC Annual Report and Accounts 2025 91
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
Implementation of remuneration policy for 2025/2026 (“FY26”)
A summary of the Policy can be found on pages 78 to 79 of this Annual Report.
Salary
The performance of the business this year has been strong and our Executives have played hugely significant roles in
continuing to grow the business, deliver improved operational performance, profitability and the creation of shareholder value.
At the end of the reporting period, Mark, our CFO, with the approval of the Board, was promoted into a new combined role of
CFO and COO. Given such additional responsibilities for Mark, and in line with our normal annual approach, the Committee
reviewed base salaries during the year in order to ensure that they remain in line with our philosophy that our Executives are
paid fairly (reflecting the scope and responsibilities of the role) and in line with market. As part of this, the Committee undertook
a review of benchmark data for both the CEO and CFO/COO roles across the FTSE 250 with the aspiration that base pay should
fall in the market-competitive range with variable pay opportunity levels aligned to the wider market.
Following this review, John was awarded a 2% pay increase aligned to the majority of the workforce.
For Mark, the Committee determined that an 18.6% pay increase should be awarded to reflect the additional responsibilities
of the combined roles of CFO and COO. The Committee is aware that this represents a significant increase, but determined
that the additional responsibilities and complexity of Mark’s new role justify such an increase. These additional responsibilities
include: Optimising operational performance, enhancing productivity and driving overall growth and profitability in line
with the strategy; Acting as AO’s main adviser on all issues relating to operational functions, keeping abreast of the latest
developments to maintain AO’s competitive position and adaptability in a rapidly evolving business landscape; Working closely
with AO’s senior leadership team to develop strategies to streamline processes, increase operational capacity and efficiency,
allocate resources and monitor key performance indicators; Developing and implementing strategies for the growth of AO and
managing risks effectively.
The current salaries as at 1 April 2025 (and those as at 1 April 2024) are as follows:
Individual Role
Base salary
at 1 April
2025
Base salary
at 1 April
2024 % increase
John Roberts CEO £557,080 £546,174 2%
Mark Higgins CFO and COO £475,000 £400,500 18.6%
Pension and other benefits
Executive Directors are eligible for a flexible benefits regime equivalent to 13% and 15% of salary for the CEO/CFO respectively,
which can be used to acquire benefits as they see fit. Through this mechanism, Executives can choose the level of their pension
contributions. However, each of the Executives have committed to not allocate an amount in excess of 5% of their salary to
their pension in future years to align with the rate of pension which is available to the majority of the wider workforce.
AO Incentive Plan
In respect of FY26, the Executive Directors will have a maximum award opportunity of 300% of basic salary. Performance will be
measured between 1 April 2025 and 31 March 2026 and against the measures disclosed below.
Subject to the achievement of the performance measures, one-third of the award will be paid in cash subject to approval of
the audited accounts for FY26. The remaining two-thirds of the award will be granted as a nil-cost option over shares. These
options will vest after three years, subject to the Committees’ satisfaction that their value reflects the underlying performance
of the business.
Performance conditions for the FY26 AO Incentive Plan Award
We have continued to set the performance conditions along three sets of deliverables:
1. Financial (output) metrics, focused on adjusted profit before tax, UK Retail B2C revenue growth and average daily cash (45%,
15% and 10% weighting, respectively);
2. Stakeholder impact measures, focusing on customers (Trustpilot) and employees (Employee Index Score) (10% and 5%
weighting, respectively); and
3. Two strategic measures, specifically aimed at: (i) developing certain opportunities in the UK Retail B2C area of the business;
and (ii) conducting a comprehensive strategic, financial, and operational review of the Mobile business (7.5% weighting each).
We continue to recognise the importance of ESG and in the context of remuneration continue to set “stakeholder” measures
encompassing customers and employees, which are aimed at ensuring the goodwill of the business over the longer term. As
can be seen on pages 03 to 05, customer and employee satisfaction are central to our strategy with both being key drivers for
creating long-term sustainable growth.
AO World PLC Annual Report and Accounts 202592
Financial
The Committee believes these performance conditions will focus management on profitable growth, with a PBT metric
according for the lion’s share of the financial metrics (45%). This, combined with the UK Retail B2C Revenue (15%), average daily
cash metric (10%) and the customer metric (10%) will ensure a clear focus on sustainable growth with an exceptional customer
proposition. For FY26, the revenue measure relates to UK Retail B2C Revenue rather than Group revenue to create an additional
focus in this area but which is balanced by the strategic measure focused on Mobile.
For the financial/output metrics, we have set targets with regard to the Company’s budget for the year ahead and following
a robust process with a stretching and ambitious mindset. We deem the budget numbers to be commercially sensitive at this
juncture, but will disclose these, retrospectively, in next year’s Annual Report on Remuneration.
Stakeholder – Customer
Historically, our customer metric has been Customer NPS; however, last year, we changed our focus to Trustpilot scores and this
will be included in the AOIP again for FY26.
While we continue to monitor NPS and address any arising concerns, this shift towards Trustpilot reflects our commitment to
aligning AO’s positioning as the UK’s most trusted electrical retailer, as John covers in depth in his report.
Embracing Trustpilot as a more transparent and publicly accessible metric, ensures a singular and public gauge of trust,
reinforcing our dedication to transparency and accountability. This streamlined approach enables AO to internally
consolidate all measures of trust under one accessible platform, allowing us, as a business, to focus on improving customer
satisfaction and driving down waste and inefficiency across the Group, further solidifying our trust reputation.
The target relates solely to the Trustpilot scores on ao.com, rather than encompassing all our consumer sites.
The weighting for this metric, given its huge importance to the long-term success of the business, remains at 10%. It is critical
that we continue to obsess about the customer whilst we continue to drive optimal bottom-line performance and grow the
top line.
Stakeholder – Employee
We continue to value our people and see them as critical to the success of the broader business. As per the prior year, we have
an Engagement Index Score (EIS) metric. EIS covers the following six key indicators of engagement across the year; Happiness;
Loyalty & Retention; Meaningful work; Discretionary Effort; Belonging; and Growth, with our threshold, on target and stretch
targets being 75, 80 and 85, respectively. This measure has a 5% weighting.
Strategic
The final measures are also strategic and are specifically aimed at: (i) developing certain opportunities in the UK Retail B2C
area of the business; and (ii) conducting a comprehensive strategic, financial and operational review of the Mobile business
(7.5% weighting each).
The Committee believes these measures provide the appropriate balance, continuing to drive transformation, recognising the
importance of key stakeholders, and output measures that should drive the creation of shareholder value.
Performance condition Weighting
Group financial (70%) Adjusted PBT 45%
UK Retail B2C Revenue 15%
Average Daily Cash 10%
Stakeholder measures non-financial (15%)
Customer –
Trustpilot score 10%
Employee EIS Score 5%
Strategic measures non-financial (15%) UK Retail Opportunities 7.5%
Comprehensive
Mobile Review 7.5%
The award pays out in full for achieving maximum levels of performance, and 62.5% of maximum pays out for achieving target
levels of performance. The target requirements are set to be significantly stretching and, therefore, the Committee considers
that this level of payout at target is appropriate. 25% of maximum pays out for threshold performance.
The Committee has discretion to override the formulaic outcome if it considers that the formulaic outcome is not reflective of
the underlying financial or non-financial performance of the Group, or the individual performance of the participant over the
relevant period.
AO World PLC Annual Report and Accounts 2025 93
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Remuneration Report continued
All-employee share plans
The Company proposes to roll out a new SAYE scheme each year and all Executive Directors will be entitled to participate on
the same basis as other employees.
Share ownership requirements
As with prior years, the required share ownership level for the Executive Directors for FY26 will be 200% of salary.
All Executives are required to hold shares to the value of 200% of salary for two years following stepping down from the Board.
Additionally, for good leavers, AO Incentive Plan options will, typically, vest/only be released at the end of the normal vesting
period, subject to the attainment of the performance underpin.
There are no share ownership requirements for the Non-Executive Directors.
Non-Executive Director fees
Fees for the Non-Executive Directors (including the Chair) were reviewed during the year and benchmarked against peers. No
increase has been made to any NED fees.
The Non-Executive Director fees for FY26 are, therefore, as follows:
FY26 FY25 % change
Chairman fee covering all board duties £210,000 £210,000 0.0%
Non-Executive Director basic fee £57,000 £57,000 0.0%
Supplementary fees to Non-Executives covering additional Board duties
Audit Committee Chairman Fee £15,000 £15,000 0.0%
Remuneration Committee Chairman Fee £15,000 £15,000 0.0%
Senior Independent Director Fee* £10,000 £10,000 0.0%
Audit Committee member £4,000 £4,000 0/0%
Remco member £4,000 £4,000 0.0%
Nomco member £2,000 £2,000 0.0%
*at present, the Company has not appointed a Senior Independent Director
Remuneration Committee membership
The members of the Committee were, for the year in question, Peter Pritchard, Shaun McCabe, Geoff Cooper and
Sarah Venning.
Peter Pritchard took over chairing the Committee from Shaun McCabe following the AGM in September 2023.
All current members of the Committee are deemed to be independent. Accordingly, the Committee continues to comply with
the independence requirements set out in the Code.
During FY25, there were six formal meetings of the Remuneration Committee. All relevant Committee members attended
all meetings.
The responsibilities of the Committee are set out in the corporate governance section of the Annual Report on page 54
onwards. The Executive Directors, the Legal Director and the HR Director may be invited to attend meetings to assist the
Committee in its deliberations as appropriate. The Committee may also invite other members of the management team to
assist as appropriate. No person is present during any discussion relating to their own remuneration or is involved in deciding
their own remuneration.
AO World PLC Annual Report and Accounts 202594
Advisers to the Committee
Deloitte LLP provided advice during the year to 31 March 2025, in relation to incentive arrangements and the review of the
remuneration policy for Executive Directors. It was appointed by the Committee. Deloitte is a signatory to the Remuneration
Consultants Group Code of Conduct and any advice provided by them is governed by that code.
Deloitte also provided certain tax advice during the year to the Group.
The Committee is committed to regularly reviewing the external adviser relationship and is comfortable that Deloitte’s advice
remains objective and independent, and that the engagement team, which provides advice to the Committee, do not have
connections with the Company or any of its Directors, which may impair their independence.
For the year under review, Deloitte’s fees for remuneration advice were £12,400 plus VAT.
Shareholder feedback
At the 2024 AGM, the Annual Remuneration Report for the year-ended 31 March 2024 was put to shareholders by way of an
advisory vote and, at the 2022 AGM, both the Policy and the value creation plan were put to shareholders for a binding vote.
Votes cast are set out in the table below.
Votes in
favour No. of
shares %
Votes against
No. of shares %
Total number
of votes cast
Votes
withheld No.
of shares
2024: To approve the Directors’ Remuneration Report 388,724,209 99.71 1,149,888 0.29 389,874,097 2,371
2022: To approve the Directors’ remuneration policy 431,426,258 88.82 54,291,724 11.18 485,720,025 2,043
2022: To approve the Value Creation Plan 2022 431,776,581 88.91 53,875,037 11.09 485,720,025 68,407
As ever, the Committee welcomes any enquiries or feedback shareholders may have on the Policy or the work of the Committee.
Peter Pritchard
Chair, Remuneration Committee
17 June 2025
AO World PLC Annual Report and Accounts 2025 95
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Report
Additional Statutory Information
The Directors have pleasure in submitting their
report and the audited financial statements of
AO World PLC (the “Company”) and its subsidiaries
(together, the “Group”) for the financial year to
31 March 2025. This report set outs additional
statutory information.
2025 Annual General Meeting
The Annual General Meeting (“AGM”) of AO World
PLC (the “Company”) will be held at 5a The
Parklands, Lostock, Bolton BL6 4SD on Monday
15 September 2025 at 9:00 am. The notice
convening the meeting with details of the business
to be transacted at the meeting and explanatory
notes is set out in a separate AGM circular, which has
been issued to all shareholders at the same time as
this Report.
Results and dividends
The Group’s and Company’s audited financial
statements for the year are set out on pages 102
to 157. The Directors do not recommend payment
of a dividend by the Company in respect of the
year-ended 31 March 2025.
Issued share capital and control
The Company’s issued share capital comprises
ordinary shares of 0.25p, each of which are listed
on the London Stock Exchange (LSE: AO.L). The
ISIN of the shares is GB00BJTNFH41. As at both
the 31 March 2025 and the date of this document,
the issued share capital of the Company was
£1,446,426.12, comprising 578,570,448 ordinary
shares of 0.25p each. Shortly following the date
of this document, the FY22 AOIP Deferred Share
Awards will vest and employees will be able to
exercise options to acquire an aggregate of
1,344,193 new ordinary shares of 0.25p each in the
Company; the Company will satisfy these Awards by
transferring shares from its Employee Benefit Trust.
Further details of the issued share capital of the
Company, together with movements in the issued
share capital during the year, can be found in Note
28 to the financial statements on page 141. All the
information detailed in Note 28 on page 141 forms
part of this Directors’ Report and is incorporated
into it by reference.
Details of employee share schemes are provided in
Note 30 to the financial statements on pages 142
to 144.
At the Annual General Meeting of the Company,
to be held on 15 September 2025, the Directors will
seek authority from shareholders to allot shares
in the capital of the Company up to a maximum
nominal amount of £967,172.45 (386,868,983
shares) representing, approximately, 66.6% of
the Company’s issued ordinary share capital
(excluding treasury shares)) of which 193,434,491
shares (representing, approximately, 33.3% of the
Company’s issued ordinary share capital (excluding
treasury shares)) can only be allotted pursuant to a
rights issue
Authority to purchase own shares
The Directors will seek authority from shareholders
at the forthcoming Annual General Meeting for
the Company to purchase, in the market, up to a
maximum of 58,030,347 of its own ordinary shares,
either to be cancelled or retained as treasury
shares. The Directors will only use this power after
careful consideration, taking into account the
financial resources of the Company, the Company’s
share price and future funding opportunities.
The Directors will also take into account the
effects on earnings per share and the interests of
shareholders generally.
Rights attaching to shares
All shares have the same rights (including voting
and dividend rights and rights on a return of capital)
and restrictions as set out in the Articles, described
below. Except in relation to dividends that have
been declared and rights on a liquidation of the
Company, the shareholders have no rights to share
in the profits of the Company. The Company’s
shares are not redeemable. However, following any
grant of authority from shareholders, the Company
may purchase, or contract to purchase, any of the
shares on or off-market, subject to the Companies
Act 2006 and the requirements of the Listing Rules.
No shareholder holds shares in the Company
that carry special rights with regard to control
of the Company. There are no shares relating to
an employee share scheme that have rights with
regard to control of the Company that are not
exercisable directly and solely by the employees,
other than in the case of the AO Sharesave Scheme,
the AO Performance Share Plan (“PSP”), the
Employee Reward Plan (“ERP”) or the AO Incentive
Plan (“AOIP”), where share interests of a participant
in such scheme can be exercised by the personal
representatives of a deceased participant in
accordance with the scheme rules.
Voting rights
Each ordinary share entitles the holder to vote
at general meetings of the Company. Under the
Articles, a resolution put to the vote at the meeting
shall be decided on a show of hands unless a poll is
demanded. On a show of hands, every member who
is present in person or by proxy at a general meeting
of the Company shall have one vote. On a poll, every
member who is present in person or by proxy shall
have one vote for every share of which they are
a holder.
Shareholders are also encouraged to vote by
taking advantage of the Company registrar’s
secure online voting service, which is available at
aoshareportal.com or by requesting a Form of Proxy
from them and returning it by post. The Articles
provide a deadline for submission of proxy forms of
not less than 48 hours before the time appointed for
the holding of the meeting or adjourned meeting.
AO World PLC Annual Report and Accounts 202596
No member shall be entitled to vote at any general
meeting either in person or by proxy, in respect
of any share held by them unless all amounts
presently payable by them in respect of that
share have been paid. Save, as noted, there are no
restrictions on voting rights nor any agreement that
may result in such restrictions.
Restrictions on transfer
of securities
There are no restrictions on the free transferability
of the Company’s shares save that the Directors
may, in their absolute discretion, refuse to register
the transfer of a share:
1. in certificated form, which is not fully paid,
provided that if the share is listed on the Official
List of the UK Listing Authority such refusal does
not prevent dealings in the shares from taking
place on an open and proper basis; or
2. in certificated form (whether fully paid or not)
unless the instrument of transfer (a) is lodged,
duly stamped, at the Office or at such other place
as the Directors may appoint and (except in the
case of a transfer by a financial institution where
a certificate has not been issued in respect of the
share) is accompanied by the certificate for the
share to which it relates and such other evidence
as the Directors may reasonably require to show
the right of the transferor to make the transfer; (b)
is in respect of only one class of share; and (c) is in
favour of not more than four transferees; or
3. in uncertificated form to a person who is to hold it
thereafter in certificated form in any case where
the Company is entitled to refuse (or is excepted
from the requirement) under the Uncertificated
Securities Regulations to register the transfer; or
4. where restrictions are imposed by laws, and
regulations, from time to time, apply (for example
insider trading laws).
In relation to awards/options under the PSP, ERP,
AOIP and the AO Sharesave Scheme, rights are not
transferable (other than to a participant’s personal
representatives in the event of death).
The Directors are not aware of any arrangements
between shareholders that may result in restrictions
on the transfer of securities or on voting rights. No
person has any special rights of control over the
Company’s share capital and all issued shares are
fully paid.
Change of control
Save, in respect of a provision of the Company’s
share schemes, which may cause options and
awards granted to employees under such schemes
to vest on takeover, there are no agreements
between the Company and its Directors or
employees providing for compensation for loss of
office or employment (whether through resignation,
purported redundancy or otherwise) because of a
takeover bid.
Save, in respect of the Company’s share schemes
and the Revolving Credit Facility agreement entered
into with Barclays Bank Plc, HSBC Bank Plc and
NatWest Bank Plc on 5 April 2023, there are no
significant agreements to which the Company is
a party that take effect, alter or terminate upon a
change of control.
Interests in voting rights
As at 31 March 2025, the Company had been
notified of, in accordance with chapter 5 of the
FCA’s Disclosure Guidance and Transparency Rules,
or was aware of (to the best of its knowledge), the
following significant interests:
Shareholder
No. of
shares held
% voting
rights
Frasers Group PLC 145,148,997 25.01
Camelot Capital Partners 118,459,508 20.41
John Roberts* 96,043,526 16.55
Phoenix Asset
Management Partners 31,311,501 5.40
Lancaster Investment
Management 23,869,298 4.11
Christopher Hopkinson** 22,280,429 3.84
* Holding excludes 6,348 ordinary shares held by Crystalcraft
Limited, a company of which he is a director and shareholder.
Separately, The Jolly Foundation, a registered charity and
private company limited by guarantee, of which John and his
spouse are each a trustee, member and director, hold a legal
(but not beneficial) interest in 5,442,115 shares.
** Holding excludes 350,857 ordinary shares held by Gayle
Halstead (defined under MAR as a person with whom
Christopher Hopkinson is closely associated) and 1,999,999
ordinary shares held in a pension of which Christopher
Hopkinson is one of the beneficiaries.
Since the period end, and to 17 June 2025, the
Company has been notified of the following
changes in significant interests:
Shareholder
No. of
shares held
% voting
rights
Frasers Group PLC 145,766,042 25.12
Camelot Capital Partners 118,459,508 20.41
John Roberts* 95,043,526 16.38
Pheonix Asset
Management Partners 31,027,501 5.35
Lancaster Investment
Management 24,039,298 4.14
Christopher Hopkinson** 22,280,429 3.84
AO World PLC Annual Report and Accounts 2025 97
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Report continued
Directors
Director Position
Served in the
year-ended 31 March 2025
Geoff Cooper Chair Served throughout the year
Mark Higgins
Group Chief Financial Officer and
Chief Operating Officer Served throughout the year
Chris Hopkinson Non-Executive Director Served throughout the year
Shaun McCabe Independent Non-Executive Director Served throughout the year
John Roberts Founder and Chief Executive Officer Served throughout the year
Peter Pritchard Independent Non-Executive Director Served throughout the year
Sarah Venning Independent Non-Executive Director Served throughout the year
The Directors’ biographical details are set out on pages 52 and 53. Further details relating to Board and
Committee composition are disclosed in the Corporate Governance Report and Committee Reports on
pages 50 to 101.
Appointment and replacement
of Directors
The appointment and replacement of Directors of
the Company is governed by the Articles.
Appointment of Directors: A Director may be
appointed by the Company by ordinary resolution
of the shareholders or by the Board (having
regard to the recommendation of the Nomination
Committee). A Director appointed by the Board
holds office only until the next Annual General
Meeting of the Company and is then eligible
for reappointment.
The Directors may appoint one or more of their
number to the office of CEO or to any other
Executive office of the Company, and any such
appointment may be made for such term, at such
remuneration and on such other conditions as the
Directors think fit.
Retirement of Directors: Under the Articles, at
every Annual General Meeting of the Company,
all Directors who held office at the time of the
two preceding AGMs, and did not retire at either
of them, shall retire from office but may offer
themselves for re-election, and if the number of
retiring Directors is fewer than one-third of Directors,
then additional Directors shall be required to retire.
However, in accordance with the Code, all Directors
will retire and be subject to re-election at the
forthcoming AGM.
Removal of Directors by special resolution: The
Company may, by special resolution, remove
any Director before the expiration of their period
of office.
Termination of a Director’s appointment: A person
ceases to be a Director if:
i. that person ceases to be a Director by virtue of
any provision of the Companies Act 2006 or is
prohibited from being a Director by law;
ii. a bankruptcy order is made against that person;
iii. a composition is made with that person’s
creditors generally in satisfaction of that
person’s debts;
iv. that person resigns or retires from office;
v. in the case of a Director who holds any Executive
office, their appointment as such is terminated or
expires and the Directors resolve that they should
cease to be a Director;
vi. that person is absent without permission of the
Board from Board meetings for more than six
consecutive months and the Directors resolve
that they should cease to be a Director; or
vii. a notice in writing is served upon them personally,
or at their residential address provided to the
Company for the purposes of section 165 of the
Companies Act 2006, signed by all the other
Directors stating that they shall cease to be a
Director with immediate effect.
For further details of our Directors, please refer to
pages 52 and 53.
Amendment of the Articles
The Company’s Articles of Association may only
be amended by a special resolution at a general
meeting of shareholders. No amendments are
proposed to be made to the existing Articles
of Association at the forthcoming Annual
General Meeting.
Post-balance sheet events
There have been no balance sheet events
that either require adjustment to the financial
statements or are important in the understanding of
the Company’s current position.
AO World PLC Annual Report and Accounts 202598
Research and development
Innovation, specifically in IT, is a critical element of
AO’s strategy and, therefore, of the future success
of the Group. Accordingly, the majority of the
Group’s research and development expenditure is
predominantly related to the Group’s IT systems. In
addition, as part of the Group’s ongoing investment
into our recycling processes, we are constantly
looking at innovating and improving our technology.
Through this investment, additional research and
development expenditure is incurred.
Indemnities and insurance
The Company maintains appropriate insurance to
cover Directors’ and Officers’ liability for itself and
its subsidiaries. The Company also indemnifies the
Directors under an indemnity, in the case of the
Non-Executive Directors in their respective letters
of appointment and in the case of the Executive
Directors in a separate deed of indemnity. Such
indemnities contain provisions that are permitted
by the Director liability provisions of the Companies
Act 2006 and the Company’s Articles.
Political donations
During the year, no political donations were made.
External branches
As part of its strategy on international expansion,
the Group established a branch in Germany on
18 July 2014 via its subsidiary AO Deutschland
Limited, registered in Bergheim. Following the
decision to close the Group’s operations in
Germany, this branch no longer trades but, as at
31 March 2025, remained in existence.
Independent Auditor
The Company’s Auditor, KPMG LLP, has indicated its
willingness to continue their role as the Company’s
Auditor. Resolutions to reappoint KPMG LLP as
Auditor of the Company and to authorise the Audit
Committee to determine their remuneration will be
proposed at the forthcoming AGM.
Disclosure of information
to the Auditor
Each of the Directors has confirmed that:
i. so far as the Director is aware, there is no relevant
audit information of which the Company’s Auditor
is unaware; and
ii. the Director has taken all the steps that they
ought to have taken as a Director to make
themselves aware of any relevant audit
information and to establish that the Company’s
Auditor is aware of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of section 418 of
the Companies Act 2006.
Reporting requirements
As permitted by section 414C of the Companies Act
2006, certain information required to be included
in the Directors’ Report has been included in the
Strategic Report and its location, together with
other information forming part of the Directors’
Report, is set out in the table on the next page.
AO World PLC Annual Report and Accounts 2025 99
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Directors’ Report continued
Reporting requirement Location
Strategic Report – Companies Act 2006
s.414A-D
Strategic Report on pages 08 to 48
Likely future developments of the business
and Group
Strategic Report on pages 08 to 48
DTR4.1.8R – management report – the
Directors’ Report and Strategic Report
comprise the “management report”
Directors’ Report on pages 96 to 100, and the Strategic Report on pages 08 to 48
Directors’ remuneration including disclosures
required by the Large and Medium-sized
Companies and Groups (Accounts and
Reports) Regulations 2008
Directors’ Remuneration Report on pages 71 to 95
Statement on corporate governance Corporate Governance Report, Audit Committee Report, Nomination Committee Report
and Directors’ Remuneration Report on pages 54 to 95
Board’s assessment of the Group’s internal
control systems
Corporate Governance Report from page 54, and the Audit Committee Report on pages
65 to 70
Board of Directors Corporate governance statement on pages 52 to 53
Community Strategic Report; Sustainability Report on page 47
Business relationships with suppliers,
customers and others
Strategic Report: How We Engage With Our Stakeholders Report on pages 28 to 30
Directors’ interests Directors’ Remuneration Report from pages 71 to 95
Diversity policy Strategic Report: Sustainability Report – Fair, equal and responsible on pages 42 to 46,
and the Nomination Committee Report on pages 62 to 64
Employee engagement Strategic Report: Engaging with our stakeholders on page 29; Sustainability Report –
Fair, equal and responsible on pages 42 to 46
Employee involvement Strategic Report: Engaging with our stakeholders on page 29; Sustainability Report –
Fair, equal and responsible on pages 42 to 46
Employees with disabilities Strategic Report: Sustainability Report – Fair, equal and responsible on pages 42 to 46
Going concern and viability statement Strategic Report page 27
Task force on climate-related financial
disclosures
TCFD disclosures on pages 36 to 38
Greenhouse gas emissions and streamlined
energy and carbon reporting
Strategic Report: Sustainability Report pages 33 to35
Details of use of financial instruments and
specific policies for managing financial risk
Note 32 to Group financial statements on pages 145 to 147
Significant related-party agreements Note 33 to the consolidated financial statements on page 147 to 148
Directors’ responsibility statement Directors’ responsibility statement on page 101
The Strategic Report, comprising pages 08 to 48, and this Directors’ Report, comprising pages 96 to 100, have been approved
by the Board and are signed on its behalf by:
Julie Finnemore
Company Secretary
17 June 2025
AO World PLC Annual Report and Accounts 2025100
The Directors are responsible for preparing the
Annual Report and the Group and Parent Company
financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare
Group and Parent Company financial statements
for each financial year. Under that law, they are
required to prepare the Group financial statements
in accordance with UK accounting standards
and applicable law, including FRS 101 Reduced
Disclosure Framework.
Under company law, the Directors must not approve
the financial statements unless they are satisfied
that they give a true and fair view of the state of
affairs of the Group and Parent Company and of the
Group’s profit or loss for that period. In preparing
each of the Group and Parent Company financial
statements, the Directors are required to:
• select suitable accounting policies and then
apply them consistently;
• make judgements and estimates that are
reasonable, relevant and reliable and, in respect
of the Parent Company financial statements
only, prudent;
• for the Group financial statements, state whether
they have been prepared in accordance with UK-
adopted international accounting standards;
• for the Parent Company financial statements,
state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained in
the Parent Company financial statements;
• assess the Group and Parent Company’s ability
to continue as a going concern disclosing, as
applicable, matters related to going concern; and
• use the going concern basis of accounting unless
they either intend to liquidate the Group or the
Parent Company or to cease operations, or have
no realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Parent Company’s transactions and
disclose with reasonable accuracy, at any time,
the financial position of the Parent Company, and
enable them to ensure that its financial statements
comply with the Companies Act 2006. They are
responsible for such internal control as they
determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error, and
have general responsibility for taking such steps
as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud
and other irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing a Strategic
Report, Directors’ Report, Directors’ Remuneration
Report and Corporate Governance Statement that
complies with that law and those regulations.
The Directors are responsible for the maintenance
and integrity of the corporate and financial
information included on the Company’s website.
Legislation in the UK governing the preparation and
dissemination of financial statements may differ
from legislation in other jurisdictions.
In accordance with Disclosure Guidance and
Transparency Rule (“DTR”) 4.1.16R, the financial
statements will form part of the annual financial
report prepared under DTR 4.1.17R and 4.1.18R. The
Auditor’s report on these financial statements
provides no assurance over whether the annual
financial report has been prepared in accordance
with those requirements.
Responsibility statement of the
Directors in respect of the Annual
Financial Report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance
with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities,
financial position and profit or loss of the
Company, and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report includes a fair review of
the development and performance of the
business and the position of the issuer and the
undertakings included in the consolidation taken
as a whole, together with a description of the
principal risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable,
and provides the information necessary for
shareholders to assess the Group’s position and
performance, business model and strategy.
John Roberts
Chief Executive Officer
Mark Higgins
Group Chief Financial Officer
and Chief Operating Officer
17 June 2025
Statement of Directors’ responsibilities in respect
of the Annual Report and the financial statements
AO World PLC Annual Report and Accounts 2025 101
Our Financials Shareholder Information
Strategic Report
Overview
Our Governance
Our
Financials
We have used AO before and we will most
certainly use you again.”
AO Customer review
Our Financials
Independent Auditor’s Report 103
Consolidated income statement 114
Consolidated statement of
financial position 115
Consolidated statement
of changes in equity 116
Consolidated statement of
cash flows 117
Notes to the consolidated
financial statements 118
Company statement of
financial position 150
Company statement of
changes in equity 151
Notes to the Company
financial statements 152
Important information 158
Glossary 159
AO World PLC Annual Report and Accounts 2025102
Independent Auditor’s Report
to the members of AO World PLC
1. Our opinion is unmodified
We have audited the financial statements of AO World PLC (“the Company”) for the year ended 31 March 2025 which comprise
the Consolidated Income Statement, Consolidated Statement of Financial Position, Consolidated Statement of Changes in
Equity, Consolidated Statement of Cash Flows, Company Statement of Financial Position, Company Statement of Changes
in Equity and the related notes, including the accounting policies in note 3 to the Group financial statements and note 1 to the
Company financial statements. In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at
31 March 2025 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
• the parent Company financial statements have been properly prepared in accordance with UK accounting standards,
including FRS 101 Reduced Disclosure Framework; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate
basis for our opinion. Our audit opinion is consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 21 July 2016. The period of total uninterrupted engagement is for
the 9 financial years ended 31 March 2025. We have fulfilled our ethical responsibilities under, and we remain independent of
the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest
entities. No non-audit services prohibited by that standard were provided.
Overview
Materiality: Group financial
statements as a whole
£2.5m (2024: £2.0m)
0.22% (2024: 0.19%) of Group total revenue
Key audit matters vs 2024
Recurring risks Product protection plans contract asset
Impairment of Mobile CGU goodwill and other
intangible assets
Recoverability of parent Company’s investment in
subsidiaries
Event driven
New: Valuation of intangible assets including goodwill
from the musicMagpie acquisition
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified
by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. We summarise below the key audit matters, in decreasing order of audit
significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters and, as
required for public interest entities, our results from those procedures. These matters were addressed, and our results are based
on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and
in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on
these matters.
AO World PLC Annual Report and Accounts 2025 103
Shareholder InformationOverview Our Governance
Strategic Report
Our Financials
Independent Auditor’s Report continued
to the members of AO World PLC
The risk Our response
Product protection
plans contract
asset
(£98.1 million contract asset;
2024: £96.5 million)
Refer to page 68 (Audit
Committee Report), page 123
(Accounting Policy), page 124
(Key sources of estimation
uncertainty) and page 136
(Financial disclosures –
contract asset).
Subjective estimate:
The contract asset recognised is
based on the value of commissions
due over the expected life of the
plans. This involves the use of a
model. The inputs into that model,
such as cancellation rates and
estimated profit share, are based
on forecast performance and
are subjective estimates which
require judgement.
This gives rise to a fraud risk in
respect of the revenue recognised.
Management performance is
assessed in relation to Adjusted
PBT which may create an
incentive to overstate revenue
recognised in respect of product
protection plans.
Application of data:
The calculation of the contract
asset is based on the correct
categorisation of certain data
elements within the model, such
as the method of sale of the plan.
The historic data is also used by
the directors as a benchmark for
determining their estimates of
future cancellations. Given there
is a judgement required in this
categorisation and the potential
for material changes to the
carrying value of the plan asset,
this area is open to the possibility of
fraud or error.
Calculation error:
The model used to calculate
the values recorded in relation
to the asset is extensive, and as
such is open to the possibility of
mathematical error.
The effect of these matters is that,
as part of our risk assessment,
we determined that the product
protection plans contract asset
has a high degree of estimation
uncertainty, with a potential
range of reasonable outcomes
greater than our materiality for the
financial statements as a whole.
The financial statement (note 22)
disclose the sensitivity estimated
by the Group.
Our procedures included:
• Benchmarking assumptions: we assessed the
directors’ assumption applied in the model such as
using historic plan data to generate the expected
average life of plans sold. This was assessed by
comparing the historical assumption to actual
cancellations;
• Reperformance: with the assistance of our data
modelling specialists, we have independently re-
performed the calculations of the contract asset
and compared these to the values calculated by
the Group;
• Our sector experience: we challenged the
assumptions made such as life of the plans
and expected future plan profitability based
on our knowledge of the business and the
Group, considering factors occurring in the
macroeconomic environment;
• Expectation vs outcome: we evaluated the
accuracy of the model with reference to
alternative data, e.g. expected cumulative cash
received compared to actual cash received;
• Test of details: for a sample of plans we assessed
whether the categorisation of the plan in the
model was appropriate, and we also assessed
whether cancelled plans had been appropriately
removed from the model;
• Sensitivity analysis: we performed sensitivity
analysis on judgemental assumptions such as the
life of plans and the discount rate, and challenged
the plausibility and severity of sensitivities
performed by management;
• Assessing transparency: we assessed the
adequacy of the Group’s disclosures on the
subjectivity of the calculation and the sensitivity of
the outcome of the calculations to changes in the
key assumptions, reflecting the risks inherent in the
calculation of the contract asset.
We performed the tests above rather than seeking
to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to
obtain audit evidence primarily through the detailed
procedures described.
Our results: we found the carrying value of the
contract asset for product protection plans to be
acceptable (2024: acceptable).
AO World PLC Annual Report and Accounts 2025104
The risk Our response
Valuation of
intangible
assets including
goodwill from
the musicMagpie
acquisition
Marketing related and
technology related
intangible assets of £11.2m
Refer to page 68 (Audit
Committee Report), page
126 (accounting policy)
and page 130 (financial
disclosures).
Subjective estimate:
On 12 December 2024 AO Ltd,
a subsidiary of AO World PLC,
acquired musicMagpie Limited.
The Directors have identified
and recognised technology
related (£4.0m) and marketing
related (£7.2m) intangible assets.
The valuation of such assets
are inherently judgemental,
and we identified certain key
assumptions supporting the
valuation of these assets to contain
significant estimation uncertainty,
and judgement.
These assumptions include
the royalty rate applied for the
marketing related intangible asset
and the number of hours and full-
time equivalent employees used
in the replacement cost approach
for the technology related
intangible assets.
The effect of these matters
is that, as part of our risk
assessment for audit planning
purposes, we determined that
the valuation of intangibles had
a high degree of estimation
uncertainty at the acquisition
date, with consequential impact on
goodwill, with a potential range of
reasonable outcomes greater than
our materiality for the financial
statements as a whole at the
acquisition date.
Our procedures included:
• Our sector experience: with the assistance of our
valuation specialists, assessing the completeness
of intangible assets identified, based on our
experience of similar acquisitions;
• Assessing the Group’s expert: assessing the
capabilities, competence and objectivity of the
Group’s valuer involved in the purchase price
allocation exercise;
• Benchmarking assumptions: with the assistance
of our valuation specialists, challenging the key
valuation assumptions, such as royalty rate and
number of hours used in the replacement cost
approach by comparing them to externally
derived data and comparable transactions;
• Sensitivity analysis: performing sensitivity analysis
over the key assumptions noted above;
• Assessing transparency: assessing the
sufficiency of the Group’s disclosures in respect
of the estimates relating to the valuation of
separately identifiable intangible assets and the
residual goodwill.
We performed the tests above rather than seeking
to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to
obtain audit evidence primarily through the detailed
procedures described.
Our results: we found the valuation of intangible
assets, including goodwill, in the acquisition to
be acceptable.
AO World PLC Annual Report and Accounts 2025 105
Shareholder InformationOverview Our Governance
Strategic Report
Our Financials
Independent Auditor’s Report continued
to the members of AO World PLC
The risk Our response
Impairment
of Mobile CGU
goodwill and other
intangible assets
Mobile goodwill £nil; 2024:
£14.7m
Mobile intangibles assets
£2.5m; 2024: £7.3m
Impairment expense £19.4m;
2024: £nil
Refer to page 68 (Audit
Committee Report), Page 121
(Accounting Policy), Page 124
(Key sources of estimation
uncertainty). And page 130
(Financial disclosures)
Subjective estimate:
At the planning stage of the
audit, we identified a significant
risk around the recoverability of
Mobile CGU goodwill and other
intangible assets due to the
inherent uncertainty involved in
forecasting future cash flows used
in determining the recoverable
amount. Our assessment of the
risk had increased due to recent
performance and uncertainty of
achieving future forecasts.
The continued challenging trading
conditions in the mobile market
have affected the Group’s cash
flow projections.
The Group has assessed the
recoverable amount of the
whole CGU using a value in use
calculation. In addition, the Group
has assessed the fair value less
costs of disposal for individual
assets within the CGU to assess the
extent of the impairment charge to
be recognised.
The effect of these matters is that,
as part of our risk assessment
for audit planning purposes, we
determined that the recoverability
of Mobile CGU goodwill and
other intangible assets had
a high degree of estimation
uncertainty, with a potential
range of reasonable outcomes
greater than our materiality for the
financial statements as a whole.
In conducting our final audit work,
and following the impairment
charge recognised by the Group,
we reassessed the degree of
estimation uncertainty to be
less than our materiality for the
financial statements as a whole.
We continue to include this as a key
audit matter because of the extent
of audit effort in reaching this
assessment.
Our procedures included:
• Historical comparison: We assessed the
reasonableness of the cash flow forecasts
by considering the historical accuracy of
management’s previous budgets and forecasts.
• Benchmarking assumptions: We utilised our
internal valuations specialists to support with our
assessment of an appropriate range of discount
rates for both impairment assessments based on
market data.
• Benchmarking assumptions (value in use
calculation): We evaluated the Group’s
assumptions included within the calculation by
comparing key assumptions such as projected
revenue, annualisation of new contracts which
commenced in FY25, cost inflation and cost
savings to internally and external derived data.
• Benchmarking assumptions (fair value less cost
of disposal calculation): We evaluated the Group’s
assumption of royalty rates to external derived
data and assessed whether they were reasonable
from the perspective of a market participant.
• Our sector experience: We assessed whether the
assumptions reflect our knowledge of the business
and industry, including known or probable
changes in the business environment.
• Sensitivity analysis: We performed sensitivity
analysis on the key assumptions within
the value in use and fair value less cost of
disposal calculations.
• Assessing transparency: We assessed whether
the Group’s disclosures about the impairment
sufficiently explains the reasons for the
impairment and the key assumptions leading to
the impairment.
We performed the tests above rather than seeking
to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to
obtain audit evidence primarily through the detailed
procedures described.
Our results
• We found the goodwill and intangibles balance
related to the Mobile CGU, and the related
impairment charge, to be acceptable (2024: we
found the Group’s conclusion that there is no
impairment of the goodwill related to Mobile CGU
to be acceptable).
AO World PLC Annual Report and Accounts 2025106
The risk Our response
Recoverability of
parent Company’s
investment in
subsidiaries
(Investment in subsidiaries
£50.1 million, 2024:
£46.2 million)
Refer to page 68 (Audit
Committee Report), Page
118 (Accounting Policy),
Page 124 (Key sources of
estimation uncertainty) and
page 134 (Links to financial
disclosures)
Low risk, high value:
The carrying value of the parent
Company’s investment in
subsidiaries represents 21.0%
(2024: 37.9%) of the Company’s
total assets.
The recoverability of investments
is not at high risk of significant
misstatement or subject to
significant judgement. However,
due to materiality in the context
of the parent Company financial
statements, it is considered to be
the area of greatest significance in
relation to the audit of the parent
Company and that is why we
consider it to be a key audit matter.
Our procedures included:
• Test of detail: We compared the carrying value
of investments with the relevant subsidiaries’
net assets in the group consolidation, to identify
whether their net assets, being an approximation
of their minimum recoverable amount, are in
excess of their carrying amount and assessed
whether these subsidiaries have historically been
profit-making.
• Assessing subsidiary audits: We considered the
results of our work on all of those subsidiaries’
profits and net assets.
We performed the tests above rather than seeking to
rely on any of the Company’s controls because the
nature of the balance is such that we would expect to
obtain audit evidence primarily through the detailed
procedures described.
Our results
• We found the Company’s conclusion that there is
no impairment of its investments in subsidiaries to
be acceptable (2024: acceptable).
We continue to perform procedures over the network
commissions contract asset. However, following further
risk assessment around the potential range of reasonable
outcomes in the context of our audit materiality, we have
not assessed this as one of the most significant risks in
our current year audit and, therefore, it is not separately
identified in our report this year.
3. Our application of materiality and an
overview of the scope of our audit
Our application of materiality
Materiality for the Group financial statements as a whole
was set at £2.5 million (2024: £2.0 million), determined with
reference to a benchmark of Group total revenue of which it
represents 0.22% (2024: 0.19%).
In selecting the most appropriate benchmark in the current
period we considered the Group’s continued profitability
following the changes in the Group’s strategy and the
simplification of the Group’s business through the closure
of its overseas operations in recent years. Similarly to the
previous period we selected the total revenue from continuing
operations to be the most appropriate benchmark as it
provides a more stable measure year on year and because of
the low level of profit before tax from continuing operations in
recent periods.
Materiality for the parent Company financial statements as
a whole was set at £0.8 million (2024: £0.6 million), which is the
component materiality for the parent Company determined
by the Group auditor. This is lower than the materiality
we would otherwise have determined with reference to
parent Company total assets, of which it represents 0.33%
(2024: 0.49%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were performed
to a lower threshold, performance materiality, so as to reduce
to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a
material amount across the financial statements as a whole.
Performance materiality was set at 75% (2024: 75%) of
materiality for the financial statements as a whole, which
equates to £1.87 million (2024: £1.5 million) for the Group and
£0.6 million (2024: £0.45 million) for the parent Company. We
applied this percentage in our determination of performance
materiality because we did not identify any factors indicating
an elevated level of risk.
We agreed to report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding
£0.125 million (2024: £0.1 million), in addition to other
identified misstatements that warranted reporting on
qualitative grounds.
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Our Financials
Independent Auditor’s Report continued
to the members of AO World PLC
Overview of the scope of our audit
This year, we applied the revised group auditing standard in
our audit of the consolidated financial statements. The revised
standard changes how an auditor approaches the identification
of components, and how the audit procedures are planned and
executed across components.
In particular, the definition of a component has changed, shifting
the focus from how the entity prepares financial information to
how we, as the group auditor, plan to perform audit procedures
to address group risks of material misstatement (“RMMs”).
Similarly, the group auditor has an increased role in designing
the audit procedures as well as making decisions on where these
procedures are performed (centrally and/or at component level)
and how these procedures are executed and supervised. As a
result, we assess scoping and coverage in a different way and
comparisons to prior period coverage figures are not meaningful.
In this report we provide an indication of scope coverage on the
new basis.
Group total revenue
£1,138m
m (2024: £1,039.3m)
Group materiality
£2.5m (2024: £2.0m)
Group total revenue
Group materiality
£2.5m
Whole nancial
statements materiality
(2024: £2.0m)
£1.87m
Whole nancial
statements performance
materiality (2024: £1.5m)
£2.5m
Range of materiality at 7
components (£0.55m-£2.5m)
(2024: £0.6m to £1.8m)
£0.125m
Misstatements reported to the
audit committee (2024: £0.1m)
We performed risk assessment procedures to determine
which of the Group’s components are likely to include risks of
material misstatement to the Group financial statements and
which procedures to perform at these components to address
those risks.
In total, we identified 15 components, having considered our
evaluation of the Group’s operational structure, the Group’s legal
structure and our ability to perform audit procedures centrally.
Of those, we identified 3 quantitatively significant
components which contained the largest percentages
of either total revenue or total assets of the Group, for
which we performed audit procedures.
We also identified 1 component as requiring special
audit consideration, owing to the Group risk relating
to the identification and valuation of intangible assets
including goodwill from the musicMagpie acquisition
residing in that component.
Additionally, having considered qualitative and
quantitative factors, we selected 3 components with
accounts contributing to the specific RMMs of the Group
financial statements.
Accordingly, we performed audit procedures on 7
components. We also performed the audit of the
parent Company.
We set the component materialities, ranging from
£0.55 million to £2.5 million, having regard to the mix of
size and risk profile of the Group across the components.
Our audit procedures covered 98% of Group revenue.
We performed audit procedures in relation to
components that accounted for 95% of the total profits
and losses that made up Group profit before tax and
77% of Group total assets.
Impact of controls on our Group audit
We identified the Group’s financial reporting system and
the revenue and inventory systems to be the main IT
systems relevant to our audit.
The Group has transitioned to a new financial reporting
system during the year and as a result of this, as well
as our assessment of the most efficient and effective
approach for gaining the appropriate audit evidence, we
planned, and undertook, a fully substantive approach in
all areas for of the audit.
We assessed the design of manual controls that
addressed the risk of management override of controls;
and as a result of this assessment, we were unable to
rely on controls in this area. Following incremental risk
assessment, we assessed that no significant changes
were required to our planned audit approach to journals.
We adopted a data-oriented approach to auditing
revenue by performing data and analytics routines.
Given that we did not plan to rely on IT controls in
our audit, a direct testing approach was used over
the completeness and reliability of data used in
these routines.
AO World PLC Annual Report and Accounts 2025108
Our audit procedures covered the following percentage of
Group revenue:
98%
Group revenue
We performed audit procedures in relation to components
that accounted for the following percentages of the total
profits and losses that made up Group profit before tax and
Group total assets:
Group total assets
77%
Total prots and losses that
made up Group prot before tax
95%
4. The impact of climate change on
our audit
In planning our audit, we have considered the potential
impact of risks arising from climate change on the Group’s
business and its financial statements.
As part of our audit we performed a risk assessment,
including making enquiries or management, holding
discussions with our internal climate change professionals to
challenge our risk assessment, reading board minutes and
applying our knowledge of the Group and sector in which it
operates to understand the extent of the potential impact of
climate change risk on the Group’s financial statements.
We assessed that there was no significant impact from
climate risk on the financial statements or our audit
approach this year due to the nature of the Group’s current
business operations. As a result, there was no impact from
climate risk on our key audit matters.
We have read the disclosure of climate related information
in the annual report and considered consistency with the
financial statements and our audit knowledge. We have not
been engaged to provide assurance over the accuracy of the
climate risk disclosures in the annual report.
5. Going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as
they have concluded that the Group’s and the Company’s
financial position means that this is realistic. They have
also concluded that there are no material uncertainties
that could have cast significant doubt over their ability to
continue as a going concern for at least a year from the
date of approval of the financial statements (“the going
concern period”).
We used our knowledge of the Group, its industry, and the
general economic environment to identify the inherent risks
to its business model and analysed how those risks might
affect the Group’s financial resources or ability to continue
operations over the going concern period.
The risk that we considered most likely to adversely affect
the Group’s available financial resources and metrics
relevant to debt covenants over this period was the general
macroeconomic environment, including a reduction in
consumer confidence and cost inflation.
We considered whether the risk could plausibly affect the
liquidity or covenant compliance in the going concern period
by comparing severe, but plausible downside scenarios
that could arise from the risk against the level of available
financial resources and covenants indicated by the Group’s
financial forecasts.
Our procedures also included:
• Inspecting confirmation from the lender of the level of
committed financing, and the associated covenant
requirements.
• Critically assessing assumptions in base case and
downside scenarios relevant to liquidity and covenant
metrics, in particular in relation to the current economic
environment, comparing to historical trends and
considering knowledge of the Group’s plans based on
approved budgets and our knowledge of the Group and the
sector in which it operates.
• Assessing whether downside scenarios applied mutually
consistent and severe assumptions in aggregate, using our
assessment of the possible range of each key assumption
and our knowledge of inter-dependencies.
• Comparing past budgets to actual results to assess the
Directors’ track record of budgeting accurately.
We assessed the completeness of the going
concern disclosure.
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Our Financials
Independent Auditor’s Report continued
to the members of AO World PLC
Our conclusions based on this work:
• we consider that the directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate;
• we have not identified, and concur with the directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the Group’s or
the Company’s ability to continue as a going concern for
the going concern period;
• we have nothing material to add or draw attention to in
relation to the directors’ statement on page 101 to the
financial statements on the use of the going concern basis
of accounting with no material uncertainties that may cast
significant doubt over the Group and Company’s use of
that basis for the going concern period, and we found the
going concern disclosure in note 3 to be acceptable; and
• the related statement under the UK Listing Rules set out
on page 27 is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or conditions
and as subsequent events may result in outcomes that
are inconsistent with judgements that were reasonable at
the time they were made, the above conclusions are not
a guarantee that the Group or the Company will continue
in operation.
6. Fraud and breaches of laws and
regulations – ability to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud
(“fraud risks”) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or provide
an opportunity to commit fraud. Our risk assessment
procedures included
• Enquiring of directors, internal audit, legal and Group
management as to the Group’s high-level policies and
procedures to prevent and detect fraud, as well as
whether they have knowledge of any actual, suspected or
alleged fraud.
• Reading Board and Audit Committee minutes.
• Considering remuneration incentive schemes and
performance targets for management and directors
including the Value Creation Plan, Performance Share Plan
and the AO Sharesave scheme.
• Using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the
audit team and remained alert to any indications of fraud
throughout the audit.
As required by auditing standards, and taking into account
possible pressures to meet profit targets and performance
incentives and our knowledge of the control environment,
we perform procedures to address the risk of management
override of controls and the risk of fraudulent revenue
recognition, in particular:
• the risk that Group and component management may be
in a position to make inappropriate accounting entries; and
• the risk of bias in accounting estimates and judgements
such as the carrying value of the product protection plans
(“PPP”) contract asset.
On this audit we do not believe there is a fraud risk related to
other revenue streams, excluding PPP revenue as discussed
in the Key Audit Matters above because there is limited
opportunity to commit fraud, and no material judgements or
estimation involved in these revenue streams .
We did not identify any additional fraud risks.
Further detail in respect of the fraud risk identified in respect
of the subjective estimates for the product protection
plans contract asset is set out in the key audit matter
disclosures in section 2 of this report. We also performed
procedures including:
• Identifying journal entries and other adjustments to test
at Group level and for selected components based on risk
criteria and comparing the identified entries to supporting
documentation. These included those posted with
unexpected account combinations.
• Assessing whether the judgements made in making
accounting estimates are indicative of a potential bias
including assessing the PPP contract asset estimate
for bias.
Identifying and responding to risks of material
misstatement related to compliance with laws
and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and
sector experience and through discussion with the directors
and others management (as required by auditing standards),
and from inspection of the Group’s regulatory and legal
correspondence and discussed with the directors and
other management the policies and procedures regarding
compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved
gaining an understanding of the control environment
including the entity’s procedures for complying with
regulatory requirements.
We communicated identified laws and regulations
throughout our team and remained alert to any indications
of non-compliance throughout the audit.
The potential effect of these laws and regulations on the
financial statements varies considerably.
AO World PLC Annual Report and Accounts 2025110
Firstly, the Group is subject to laws and regulations that
directly affect the financial statements including financial
reporting legislation (including related companies legislation),
distributable profits legislation and taxation legislation and
we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial
statement items.
Secondly the Group is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures
in the financial statements for instance through the
imposition of fines or litigation. We identified the following
areas as those most likely to have such an effect: health
and safety, financial services regulation, data protection
laws, anti-bribery, employment law, Mobile and Ofcom rules
and guidance and certain aspects of company legislation
recognising the financial and regulated nature of the Group’s
activities and its legal form. Auditing standards limit the
required audit procedures to identify non-compliance with
these laws and regulations to enquiry of the directors and
other management and inspection of regulatory and legal
correspondence, if any. Therefore, if a breach of operational
regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our audit
in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk
of non-detection of fraud, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and
cannot be expected to detect non-compliance with all laws
and regulations.
7. We have nothing to report on the other
information in the Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not
express an audit opinion or, except as explicitly stated below,
any form of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether, based on our financial
statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or
our audit knowledge. Based solely on that work we have not
identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the
strategic report and the directors’ report;
• in our opinion the information given in those reports
for the financial year is consistent with the financial
statements; and
• in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
disclosures in respect of emerging and principal risks and
the viability statement, and the financial statements and our
audit knowledge.
Based on those procedures, we have nothing material to add
or draw attention to in relation to:
• the directors’ confirmation within the viability assessment
on page 27 that they have carried out a robust assessment
of the emerging and principal risks facing the Group,
including those that would threaten its business model,
future performance, solvency and liquidity;
• the ‘our risks’ disclosures on page 22 to 26 describing these
risks and how emerging risks are identified, and explaining
how they are being managed and mitigated; and
• the directors’ explanation in the viability assessment of
how they have assessed the prospects of the Group, over
what period they have done so and why they considered
that period to be appropriate, and their statement as
to whether they have a reasonable expectation that the
Group will be able to continue in operation and meet
its liabilities as they fall due over the period of their
assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
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Our Financials
We are also required to review the viability assessment,
set out on page 27 under the UK Listing Rules. Based on
the above procedures, we have concluded that the above
disclosures are materially consistent with the financial
statements and our audit knowledge.
Our work is limited to assessing these matters in the context
of only the knowledge acquired during our financial
statements audit. As we cannot predict all future events or
conditions and as subsequent events may result in outcomes
that are inconsistent with judgements that were reasonable
at the time they were made, the absence of anything to
report on these statements is not a guarantee as to the
Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
corporate governance disclosures and the financial
statements and our audit knowledge.
Based on those procedures, we have concluded that each
of the following is materially consistent with the financial
statements and our audit knowledge:
• the directors’ statement that they consider that the
annual report and financial statements taken as a whole
is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the
Group’s position and performance, business model
and strategy;
• the section of the annual report describing the work of the
Audit Committee, including the significant issues that the
audit committee considered in relation to the financial
statements, and how these issues were addressed; and
• the section of the annual report that describes the review
of the effectiveness of the Group’s risk management and
internal control systems.
We are required to review the part of the Corporate
Governance Statement relating to the Group’s compliance
with the provisions of the UK Corporate Governance Code
specified by the UK Listing Rules for our review. We have
nothing to report in this respect.
8. We have nothing to report on the other
matters on which we are required to report
by exception
Under the Companies Act 2006, we are required to report to
you if, in our opinion:
• adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent Company financial statements and the part of
the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page
101, the directors are responsible for: the preparation of the
financial statements including being satisfied that they give
a true and fair view; such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error; assessing the Group and parent Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the
going concern basis of accounting unless they either intend
to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial
statements in an annual financial report prepared under
Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R.
This auditor’s report provides no assurance over whether the
annual financial report has been prepared in accordance
with those requirements.
Independent Auditor’s Report continued
to the members of AO World PLC
AO World PLC Annual Report and Accounts 2025112
10. The purpose of our audit work and to
whom we owe our responsibilities
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a
body, for our audit work, for this report, or for the opinions we
have formed.
Roger Nixon
Senior Statutory Auditor
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 St Peter’s Square
Manchester
M2 3AE
17 June 2025
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Note
2025
£m
2024
£m
Revenue 5, 6 1,137.5 1,039.3
Cost of sales 6, 8 (861.5 ) (796.0 )
Gross profit 276.0 243.3
Administrative expenses- impairment of goodwill and intangible fixed assets 3 (19.6 ) –
Other administrative expenses (235.4 ) (207.7 )
Total administrative expenses 7, 8 (255.0 ) (207.7 )
Other operating income 8 0.1 0.6
Operating profit 8 21.1 36.2
Finance income 11 4.8 4.5
Finance costs 12 (5.3 ) (6.4 )
Profit before tax 20.6 34.3
Tax charge 13 (10.9 ) (9.6 )
Profit after tax for the period from continuing operations 9.7 24.7
Result for the period from discontinued operations 34 0.8 –
Profit after tax for the year 10.5 24.7
Total comprehensive profit attributable to owners of the parent arising from:
Continuing operations 9.7 24.7
Discontinued operations 0.8 –
Earnings per share from continuing operations (pence)
Basic earnings per share 15 1.70 4.29
Diluted earnings per share 15 1.63 4.14
Earnings per share from continuing and discontinued operations (pence)
Basic earnings per share 15 1.83 4.29
Diluted earnings per share 15 1.76 4.14
The Group has no items of other comprehensive income for the period ended 31 March 2025 or the prior period. As a result, the
total comprehensive income for the period is the same as the profit for the period and therefore no separate Statement of
Comprehensive Income has been presented.
Consolidated income statement
For the year ended 31 March 2025
AO World PLC Annual Report and Accounts 2025114
Consolidated statement of financial position
As at 31 March 2025
Note
2025
£m
2024
£m
Non-current assets
Goodwill 16 25.6 28.2
Other intangible assets 17 13.2 9.6
Property, plant and equipment 18 27.1 20.1
Right of use assets 18 51.6 56.2
Trade and other receivables 22 88.5 90.0
Deferred tax 20 2.2 2.9
Current assets
Inventories 21 88.5 79.5
Trade and other receivables 22 102.5 115.1
Cash and cash equivalents 24 27.4 40.1
Total assets 426.6 441.8
Current liabilities
Trade and other payables 23 (207.7 ) (225.6 )
Borrowings 25 (0.2 ) (0.2 )
Lease liabilities 26 (18.5 ) (16.9 )
Corporation tax payable (0.7 ) (0.6 )
Provisions 27 (0.5 ) (0.6 )
(227.6 ) (243.9 )
Net current liabilities (9.2 ) (9.1 )
Non-current liabilities
Trade and other payables 23 (5.2 ) (2.5 )
Borrowings 25 (1.7 ) (1.9 )
Lease liabilities 26 (42.9 ) (51.9 )
Provisions 27 (4.7 ) (3.9 )
(54.5 ) (60.1 )
Total liabilities (282.1 ) (304.0 )
Net assets 144.5 137.8
Equity attributable to owners of the parent
Share capital 28 1.5 1.4
Share premium account 28 108.5 108.5
Investment in own shares 28 (10.9 ) –
Other reserves 29 68.2 64.4
Retained losses (22.8 ) (36.5 )
Total equity 144.5 137.8
The financial statements of AO World PLC, registered number 05525751, on pages 114 to 149 were approved by the Board of
Directors and authorised for issue on 17 June 2025. They were signed on its behalf by:
John Roberts Mark Higgins
CEO CFO & COO
AO World PLC AO World PLC
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Consolidated statement of changes in equity
As at 31 March 2025
Other reserves
Share
capital
£m
Investment
in own
shares
£m
Share
premium
account
£m
Merger
reserve
£m
Capital
redemption
reserve
£m
Share-
based
payments
reserve
£m
Translation
reserve
£m
Other
reserve
£m
Retained
losses
£m
Total
£m
Balance at 31 March 2023 1.4 – 108.2 59.2 0.5 15.5 (9.4 ) (6.3 ) (63.3 ) 105.7
Profit for the period – – – – – – – – 24.7 24.7
Share-based payment
charge (net of tax) – – – – – 7.1 – – – 7.1
Issue of shares – – 0.3 – – – – – – 0.3
Movement between
reserves – – – – – (2.2 ) – – 2.2 –
Balance at 31 March 2024 1.4 – 108.5 59.2 0.5 20.4 (9.4 ) (6.3 ) (36.5 ) 137.8
Profit for the period – – – – – – – – 10.5 10.5
Share-based payment
charge (net of tax) – – – – – 7.1 – – – 7.1
Issue of shares 0.1 – – – – – – – – 0.1
Purchase of shares by EBT
(see note 28) – (11.1 ) – – – – – – – (11.1 )
Share options exercised – 0.2 – – – – – – – 0.2
Movement between
reserves – – – – – (3.2 ) – – 3.2 –
Balance at 31 March 2025 1.5 (10.9 ) 108.5 59.2 0.5 24.3 (9.4 ) (6.3 ) (22.8 ) 144.5
AO World PLC Annual Report and Accounts 2025116
Consolidated statement of cash flows
For the year ended 31 March 2025
Note
2025
£m
2024
£m
Cash flows from operating activities
Profit for the year in continuing operations 9.7 24.7
Net cash generated from/ (used in) operating activities in discontinued operations 34 1.2 (0.5 )
Adjustments for:
Depreciation and amortisation 17, 18 27.1 24.3
Non cash impairments of goodwill and intangible fixed assets 16, 17 19.6 –
Profit on disposal of property, plant and equipment (0.1 ) (0.1 )
Finance income 11 (4.8 ) (4.5 )
Finance costs 12 5.3 6.4
Taxation charge 13 10.9 9.6
Share-based payment charge 30 7.3 6.7
Increase/ (Decrease) in provisions 27 0.4 (0.6 )
Operating cash flows before movement in working capital 76.6 66.0
Increase in inventories (4.2 ) (6.4 )
Decrease in trade and other receivables 18.3 28.8
Decrease in trade and other payables (23.5 ) (25.6 )
Total movement in working capital (9.4 ) (3.2 )
Taxation paid (9.3 ) (1.2 )
Cash generated from operating activities 58.0 61.6
Cash flows from investing activities
Interest received 1.0 0.7
Proceeds from sale of property, plant and equipment 0.1 –
Acquisition costs relating to right of use assets – (0.1 )
Acquisition of property, plant and equipment (8.8 ) (5.8 )
Acquisition of intangible assets (0.1 ) (2.4 )
Acquisition of subsidiary (net of cash acquired) 35 (5.7 ) –
Cash used in investing activities (13.5 ) (7.6 )
Cash flows from financing activities
Proceeds from issue of ordinary share capital 0.1 0.3
Purchase of shares by EBT (including transaction costs) 28 (11.1 ) –
Proceeds from new borrowings 24 – 2.2
Repayment of borrowings 24 (19.4 ) (10.1 )
Interest paid on lease liabilities (3.4 ) (3.8 )
Repayment of lease liabilities (21.2 ) (18.4 )
Other interest paid including interest on borrowings (2.3 ) (3.1 )
Net cash used in financing activities by discontinued operations 34 (0.1 ) (0.1 )
Net cash used in financing activities (57.2 ) (33.0 )
Net (decrease)/ increase in cash (12.7 ) 21.0
Cash and cash equivalents at beginning of year 40.1 19.1
Cash and cash equivalents at end of year 24 27.4 40.1
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Shareholder InformationOverview Our Governance
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
3. Significant accounting policies continued
AO World PLC Annual Report and Accounts 2025120
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Our Financials
Notes to the consolidated financial statements continued
For the year ended 31 March 2025
3. Significant accounting policies continued
AO World PLC Annual Report and Accounts 2025122
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Our Financials
Notes to the consolidated financial statements continued
For the year ended 31 March 2025
3. Significant accounting policies continued
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
22. Trade and other receivables continued
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
30. Share-based payments continued
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Notes to the consolidated financial statements continued
For the year ended 31 March 2025
32. Financial instruments continued
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33. Related-party transactions continued
Notes to the consolidated financial statements continued
For the year ended 31 March 2025
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Company statement of financial position
As at 31 March 2025
Note
2025
£m
2024
£m
Non-current assets
Intangible assets 4 – 0.1
Property, plant and equipment 5 1.3 1.5
Right of use assets 5 1.9 6.0
Investment in subsidiaries 3 50.1 46.2
Trade and other receivables 7 179.3 63.7
Deferred tax asset 6 1.6 1.4
234.2 119.0
Current assets
Trade and other receivables 7 4.6 2.6
Cash at bank and in hand 0.2 0.3
4.8 2.9
Total assets 239.0 121.9
Current liabilities
Trade and other payables 8 (69.4) (67.4)
Lease liabilities 9 (1.4) (1.2)
Provisions 10 (0.3) (0.3)
(71.1) (68.9)
Net current liabilities (66.3) (66.0)
Non-current liabilities
Lease liabilities 9 (1.6) (5.9)
Provisions 10 (0.7) (0.6)
(2.3) (6.5)
Total liabilities (73.4) (75.4)
Net assets 165.6 46.5
Equity
Share capital 11 1.5 1.4
Share premium 11 108.5 108.5
Investment in own shares 11 (10.9) –
Merger reserve 11 59.2 59.2
Capital redemption reserve 0.5 0.5
Share-based payments reserve 24.1 20.3
Other reserves 0.4 0.4
Retained losses (17.7) (143.8)
Total equity 165.6 46.5
AO World PLC reported a profit after tax for the year ended 31 March 2025 of £123.0m (2024: £36.2m) which includes dividends
received from subsidiaries of £149.8m (2024: £50.0m).
The financial statements of AO World PLC, registered number 05525751, were approved by the Board of Directors and
authorised for issue on 17 June 2025. They were signed on its behalf by:
John Roberts Mark Higgins
CEO CFO & COO
AO World PLC AO World PLC
AO World PLC Annual Report and Accounts 2025150
Company statement of changes in equity
As at 31 March 2025
Share
capital
£
Investment
in own
shares
£m
Share
premium
account
£m
Merger
reserve
£m
Capital
redemption
reserve
£m
Share-based
payments
reserve
£m
Other
reserve
£m
Retained
losses
£m
Total
£m
Balance at 31 March 2023 1.4 – 108.2 59.2 0.5 15.4 0.4 (182.1) 3.0
Profit for the year – – – – – – – 36.2 36.2
Share-based payments
charge (net of tax) – – – – – 7.0 – – 7.0
Issue of shares
(net of expenses) – – 0.3 – – – – – 0.3
Movement between reserves – – – – – (2.1) – 2.1 –
Balance at 31 March 2024 1.4 – 108.5 59.2 0.5 20.3 0.4 (143.8) 46.5
Profit for the year – – – – – – – 123.0 123.0
Share-based payments
charge (net of tax) – – – – – 7.1 – – 7.1
Issue of shares
(net of expenses) 0.1 – – – – – – – 0.1
Purchase of shares by EBT – (11.1) – – – – – – (11.1)
Share options exercised – 0.2 – – – – – – 0.2
Movement between reserves – – – – – (3.2) – 3.2 –
Balance at 31 March 2025 1.5 (10.9) 108.5 59.2 0.5 24.1 0.4 17.7 165.6
AO World PLC Annual Report and Accounts 2025 151
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Notes to the Company financial statements
For the year ended 31 March 2025
1. Basis of preparation and
accounting policies
Basis of preparation
These financial statements were prepared in accordance
with Financial Reporting Standard 101 Reduced Disclosure
Framework (“FRS 101”).
In preparing these financial statements, the Company
applies the recognition, measurement and disclosure
requirements of UK-adopted international accounting
standards in conformity with the requirements of the
Companies Act 2006 (“Adopted IFRSs”), but makes
amendments where necessary in order to comply with
Companies Act 2006, and has set out below where advantage
of the FRS 101 disclosure exemptions has been taken.
Under s408 of the Companies Act 2006, the Company is
exempt from the requirement to present its own profit and
loss account.
In these financial statements, the Company has applied
the exemptions available under FRS 101 in respect of the
following disclosures:
• a cash flow statement and related notes;
• comparative period reconciliations for share capital,
tangible fixed assets, intangible assets;
• disclosures in respect of transactions with wholly
owned subsidiaries;
• disclosures in respect of capital management;
• the effects of new but not yet effective IFRSs;
• disclosures in respect of the compensation of key
management personnel; and
• disclosures of transactions with a management entity
that provides key management personnel services to
the Company.
As the consolidated financial statements include the
equivalent disclosures, the Company has also taken the
exemptions under FRS 101 available in respect of the following
disclosures:
• IFRS 2 Share-based Payments in respect of Group-settled
share-based payments;
• certain disclosures required by IAS 36 Impairment of Assets
in respect of the impairment of goodwill and indefinite life
intangible assets; and
• certain disclosures required by IFRS 13 Fair Value
Measurement and the disclosures required by IFRS 7
Financial Instrument Disclosures.
Investments
Investments in subsidiaries are stated at cost less, where
appropriate, provisions for impairment.
Other accounting policies
For other accounting policies, please refer to the Group
accounting policies on page 118.
2. Operating loss
The Auditor’s remuneration for audit and other services is
disclosed in Note 9 to the consolidated financial statements.
3. Investment in subsidiaries
2025
£m
2024
£m
Cost
At 31 March 2024 46.8 43.3
Additions 2.8 –
Group share-based payments 3.9 3.5
At 31 March 2025 53.5 46.8
Impairment
At 31 March 2024 0.6 0.6
Impairment 2.8 –
At 31 March 2025 and
31 March 2024 3.4 0.6
Carrying amount
At 31 March 2025 and
31 March 2024 50.1 46.2
On 23 April 2024, the Company acquired 1.4m and 1.4m
ordinary shares in Appliances Online Ltd and Worry Free
Limited respectively for £1 per share. Both companies were
and continue to be wholly owned subsidiaries.
Subsequently, management assessed the carrying value
of its investments in Appliances Online Ltd and Worry Free
Limited. As a result, management have impaired the value of
investments in those companies during the year.
The Company has made capital contributions to its
subsidiaries of £3.9m (2024: £3.5m) in relation to the
allocation of share-based payment charges.
AO World PLC Annual Report and Accounts 2025152
As at 31 March 2025, the Company has investments in the following subsidiaries;
Name of subsidiary
Principal place
of business
Class of
shares held
Proportion of ownership
interests and voting rights
held by AO World PLC Principal activity
AO Retail Limited United Kingdom Ordinary 100%
†
Retail
Elekdirect Limited United Kingdom Ordinary 100% Retail
Electrical Appliance Outlet Limited United Kingdom Ordinary 100% Retail
Expert Logistics Ltd United Kingdom Ordinary 100%
†
Logistics and transport
AO Recycling Limited United Kingdom Ordinary 100% WEEE recycling
Worry Free Limited United Kingdom Ordinary 100% Holding company
Appliances Online Ltd United Kingdom Ordinary 100% Holding company
AO Ltd United Kingdom Ordinary 100% Holding company
AO Deutschland Limited United Kingdom Ordinary 100%
‡
Non trading (see note 34)
AO.BE SA Belgium Ordinary 99.99%* Dormant
Mobile Phones Direct Limited United Kingdom Ordinary 100% Dormant
* 0.01% of the investment in AO.BE SA is owned by AO Deutschland Limited.
†
Indirectly owned through AO Limited.
‡
Indirectly owned through Worry Free Limited (50%) and Appliances Online Limited (50%).
A full list of the Company’s subsidiaries in included in note 19 of the consolidated financial statements
4. Intangible assets
Domain
names
£m
Software
£m
Total
£m
Cost
At 31 March 2024 and 31 March 2025 0.7 3.4 4.1
Amortisation
At 31 March 2024 0.7 3.3 4.0
Charge for the year – 0.1 0.1
At 31 March 2025 0.7 3.4 4.1
Carrying amount
At 31 March 2025 – – –
At 31 March 2024 – 0.1 0.1
Amortisation is charged to administrative expenses in the income statement.
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5. Property, plant and equipment and right of use assets
Computer
and office
equipment
£m
Leasehold
improvements
£m
Total
£m
Right of use
assets
£m
Cost
At 31 March 2024 4.8 1.4 6.2 8.5
Additions 0.4 – 0.4 0.8
Disposals – – – (3.5)
At 31 March 2025 5.2 1.4 6.6 5.9
Accumulated depreciation
At 31 March 2024 4.0 0.7 4.7 2.5
Charge for the year 0.4 0.2 0.6 1.5
At 31 March 2025 4.4 0.9 5.3 4.0
Carrying amount
At 31 March 2025 0.8 0.5 1.3 1.9
At 31 March 2024 0.8 0.7 1.5 6.0
The carrying value of right of use assets is analysed as follows:
Right of use assets
2025
£m
2024
£m
Land and buildings 1.2 5.1
Motor vehicles 0.7 0.7
IT equipment 0.1 0.2
1.9 6.0
Right of use asset disposals includes the reassessment of lease terms for an existing lease; the Company now intends to
exercise the break clause.
6. Deferred tax
The following is the asset recognised by the Company and movements thereon during the current and prior reporting year:
Share
options
£m
Losses and
unused tax
£m
Transitional
relief
£m
Other timing
difference
£m
Total
£m
Deferred tax asset at 31 March 2023 0.5 0.3 0.2 0.1 1.1
(Debit)/ Credit to income statement 0.5 (0.3) (0.1) – –
Credit to reserves 0.2 – – – 0.2
Deferred tax asset at 31 March 2024 1.2 – 0.1 0.1 1.4
(Debit)/ Credit to income statement 0.4 – – (0.1) 0.3
Credit to reserves (0.1) – – – (0.1)
Deferred tax asset at 31 March 2025 1.5 – 0.1 – 1.6
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the
asset can be utilised.
Notes to the Company financial statements continued
For the year ended 31 March 2025
AO World PLC Annual Report and Accounts 2025154
7. Trade and other receivables
2025
£m
2024
£m
Amounts owed by Group undertakings 179.3 63.7
Prepayments 3.5 2.1
Other receivables 1.2 0.5
183.9 66.3
The Trade and other receivables are classified as:
2025
£m
2024
£m
Non-current assets – Amounts owed by Group undertakings 179.3 63.7
Current assets 4.6 2.6
183.9 66.3
Amounts owed by Group undertakings are repayable on demand and bear no interest. All other trade and other receivables
are receivable in less than one year.
8. Trade and other payables
2025
£m
2024
£m
Trade payables 3.0 0.2
Accruals 8.4 6.3
Other payables 0.7 0.9
Amounts owed to Group undertakings 57.3 60.0
69.4 67.4
The carrying amount of trade payables approximates to their fair value.
Amounts owed to Group undertakings are repayable on demand and carry no interest.
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9. Lease Liabilities
2025
£m
2024
£m
Secured borrowing at amortised cost
Lease liabilities 3.0 7.2
Amounts payable under lease liabilities
Within one year 1.4 1.2
Within one to two years 1.3 1.2
Within two to three years 0.3 1.0
Within three to four years – 0.9
Within four to five years – 0.8
Greater than five years – 2.1
3.0 7.2
Movements in the year were as follows:
Leases
£m
At 1 April 2024 7.2
Changes from financing cash flows
Repayment of lease liabilities (1.8)
Payment of interest (0.3)
Total changes from financing cash flows (2.1)
Other changes
New lease liabilities 0.8
Reassessment of lease term (3.2)
Interest charge 0.3
Total other changes (2.1)
At 31 March 2025 3.0
Notes to the Company financial statements continued
For the year ended 31 March 2025
AO World PLC Annual Report and Accounts 2025156
10. Provisions
Provisions are classified as:
2025
£m
2024
£m
Current liabilities 0.3 0.3
Non-current liabilities 0.7 0.6
1.0 0.9
The movement in the year is shown below:
Dilapidations
provision
£m
Restructuring
provision
£m
Total
£m
At 31 March 2024 0.4 0.5 0.9
Provisions created in the year 0.3 – 0.3
Utilised in the year – (0.2) (0.2)
At 31 March 2025 0.7 0.3 1.0
The dilapidations provision is created for leases where the Company is liable to return the assets to their original state at the
end of the lease. The provision will be utilised as leased assets expire. The restructuring provision relates to the simplification of
operations in a prior year which included the early termination of existing contracts.
11. Share capital and share premium
Number
of shares
m
Share
capital
£m
Share
premium
£m
Investment in
own shares
£m
Merger
reserve
£m
At 31 March 2024 578.5 1.4 108.5 – 59.2
Share issue 1.7 0.1 – – –
Purchase of shares by EBT (including transaction costs) – – – (11.1) –
Transfer of shares upon exercise of share options – – – 0.2 –
At 31 March 2025 580.3 1.5 108.5 (10.9) 59.2
On 8 July 2024, the Company issued 1,733,027 shares to satisfy options granted in July 2020 under the FY21 AO Incentive
plan. The shares were acquired and are held in the Company’s Employee Benefit Trust (“EBT”), at nominal values, and the EBT
transfers to the participants as they are exercised.
On 1 and 2 August 2024, the Company’s EBT also purchased 8,882,350 and 434,602 respectively, of the Company’s ordinary
shares at market value. Consideration paid was £11.1m, which includes transaction costs of £0.2m. Shares held by the EBT will be
used to satisfy options under the Group’s share schemes.
8,882,350 of the shares were purchased at market value (117.3p per share and total consideration of £10.4m) from John Roberts,
Sally Roberts and Chris Hopkinson who are considered related parties. There were no outstanding balances with these related
parties as at 31 March 2025.
The merger reserve arose on the purchase of DRL Limited (now AO Retail Limited) in the year ended 31 March 2008 and Mobile
Phones Direct Limited in the year ended 31 March 2019. In the year ended 31 March 2023, the difference between the nominal
value and fair value issued as part of the capital raise of £37.0m was also taken to the merger reserve.
12. Share-based payments
The Company recognised total expenses of £3.5m (2024: £3.3m) in the year in relation to both the Performance Share Plan
(referred to as LTIP or SIP), Value Creation Plan (“VCP”) and the AO Sharesave scheme (referred to as SAYE). Details of these
schemes are described in Note 30 to the consolidated financial statements.
AO World PLC Annual Report and Accounts 2025 157
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Our Financials
Important information
Registered office and headquarters
AO
5A The Parklands
Lostock
Bolton
BL6 4SD
Registered number: 5525751
Tel: 01204 672 400
Web: ao-world.com
Company Secretary
Julie Finnemore
Email: cosec@ao.com
Joint Stockbrokers
Jefferies International Limited
100 Bishopsgate
London
EC2N 4JL
Peel Hunt
100 Liverpool Street
London
EC2M 2AT
Independent Auditor
KPMG LLP
1 St Peter’s Square
Manchester
M2 3AE
Bankers
Barclays Bank plc
3 Hardman Street
Manchester, M3 3AX
HSBC Bank plc
Landmark, St Peters Square
Manchester, M1 4BP
National Westminster Bank plc
250 Bishopsgate
London, ECM 4AA
Santander
8th Floor, Landmark, 1 Oxford Street
Manchester M1 4PB
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
By phone: +44 (0) 371 664 0300 (calls are charged at the
standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable
international rate).
Lines are open 9.00 am to 5.30 pm, Monday to Friday,
excluding public holidays in England and Wales.
Email: shareholderenquiries@cm.mpms.mufg.com
Enquiring about your shareholding
If you want to ask, or need any information, about your
shareholding, please contact our registrar (see contact
details in the opposite column). Alternatively, if you have
internet access, you can access the Group’s shareholder
portal via aoshareportal.com where you can view and
manage all aspects of your shareholding securely.
Investor relations website
The investor relations section of our website, ao-world.com,
provides further information for anyone interested in AO.
In addition to the Annual Report and share price,
Company announcements, including the full year results
announcements and associated presentations, are also
published there.
Share dealing service
You can buy or sell the Company’s shares in a simple and
convenient way via the Link share dealing service either
online (https://ww2.linkgroup.eu/share-deal) or by telephone
(+44 (0) 371 664 0445).
Calls are charged at the standard geographic rate and will
vary by provider. Calls outside the UK are charged at the
applicable international rate. Lines are open between 8.00
am and 4.30 pm, Monday to Friday, excluding public holidays
in England and Wales.
Please note that the Directors of the Company are not
seeking to encourage shareholders to either buy or sell
shares in the Company. Shareholders in any doubt about
what action to take are recommended to seek financial
advice from an independent financial adviser authorised by
the Financial Services and Markets Act 2000.
Cautionary note regarding
forward-looking statements
Certain statements made in this report are forward-
looking statements. Such statements are based on current
expectations and assumptions, and are subject to a number
of risks and uncertainties that could cause actual events or
results to differ materially from any expected future events
or results expressed or implied in these forward-looking
statements. They appear in a number of places throughout
this report and include statements regarding the intentions,
beliefs or current expectations of the Directors concerning,
amongst other things, the Group’s results of operations,
financial condition, liquidity, prospects, growth, strategies
and the business. Persons receiving this report should
not place undue reliance on forward-looking statements.
Unless otherwise required by applicable law, regulation or
accounting standard, AO does not undertake to update or
revise any forward-looking statements, whether as a result of
new information, future developments or otherwise.
AO World PLC Annual Report and Accounts 2025158
The production of this report supports the work of the
Woodland Trust, the UK’s leading woodland conservation
charity. Each tree planted will grow into a vital carbon store,
helping to reduce environmental impact as well as creating
natural havens for wildlife and people.
Glossary
Adjusted PBT means Profit before tax, adjusted for any adjusting
items as defined by the Board
Adjusting items means the items as set out on page 124
AGM means the Group’s Annual General Meeting
An AOer means one of our amazing employees
AOIP means The AO Incentive Plan, a form of LTIP
AO World, AO or the Group means AO World PLC and its
subsidiary undertakings
AV means audio visual products
B2B means business to business
B2C means business to consumer
Board means the Board of Directors of the Company or its
subsidiaries from time to time as the context may require
Code means the UK Corporate Governance code published by
the FRC in 2018
Companies Act means the Companies Act 2006
Company means AO World PLC, a company incorporated in
England and Wales, with registered number 05525751, whose
registered office is at 5A The Parklands, Lostock, BL6 4SD
CRM means customer relationship management
CRR means Corporate Risk Register
DC means distribution centre
D&G means Domestic and General
ENPS means Employee Net Promoter Score
EPS means earnings per share
ERP means the AO Employee Reward Plan, or Enterprise
Resource Planning, as the context requires
Europe means the Group’s entities operating within the European
Union, but outside the UK
FY23, FY24 and FY25 mean the financial year of the Group
ended 31 March 2023, 31 March 2024 and FY25 means the current
financial year ending 31 March 2025
GAAP means Generally Accepted Accounting Practice
GHG means greenhouse gas
IAS means International Accounting Standards
IFRS means International Financial Reporting Standards
IPO means the Group’s Initial Public Offering in March 2014
KPMG means KPMG LLP
LSE means London Stock Exchange
LTIP means Long-term Incentive Plan
MDA means major domestic appliances
MPD means Mobile Phones Direct
Magpie and musicMagpie refers to the musicMagpie group of
companies, unless the context indicates otherwise
NED means Non-Executive Director
NPS means Net Promoter Score, which is an industry measure of
customer loyalty and satisfaction
PSP means the AO Performance Share Plan, a form of LTIP
RMC means our Risk Management Committee
SDA means small domestic appliances
SECR means Streamlined Energy and Carbon Reporting
SEO means Search Engine Optimisation
SG&A means Selling, General & Administrative Expenses
SID means Senior Independent Director
SKUs means stock keeping units
TCFD means Task force on climate-related financial disclosures
UK means the Group’s entities operating within the United
Kingdom
VCP means the Value Creation Plan, a form of LTIP
WEEE means Waste Electrical and Electronic Equipment
There’s lots more online:
UK sites:
Customer
ao.com
ao-delivery.com
ao-outlet.co.uk
ao-recycling.com
mobilephonesdirect.co.uk
elekdirect.co.uk
affordablemobiles.co.uk
buymobiles.net
musicmagpie.co.uk
Corporate
ao-world.com
AO World PLC Annual Report and Accounts 2025 159
Overview Our Governance
Strategic Report
Shareholder InformationOur Financials
AO World PLC Annual Report and Accounts 2025
AO World PLC
AO, 5A The Parklands
Lostock
Bolton BL6 4SD