Trusted
times over
AO World Plc
Annual Report and Accounts 2026
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Our Mission
To be the destination
for electricals
Our Purpose
We make customers’ lives easier
by helping them brilliantly
Proud to be the
UK's most trusted
electrical retailer
Molly, AO Customer
April 2026
1 million+
Number of Trustpilot reviews
£1.26bn
Group Revenue
FY25: £1.14bn
£50.5m
PBT
FY25: £20.6m
£16.4m
Net funds/ (debt)
FY25: (£35.9m)
A million Trustpilot reviews coupled with a rating of 4.9 out
of 5 is a world rst and something we are immensely proud
of because it reects our deeply ingrained obsession with
customer service.
The website is very easy to
navigate, the perks of the
membership are well worth
it and communication has
been good throughout.
My items were delivered
quick and easy and my old
appliances taken away.”
Overview
AO World at a glance 01
Strategic Report
Chair’s statement 03
Chief Executive’s review 04
Our business model
and strategy 06
Our markets 08
Our brand 10
Financial and Operational review 12
Sustainability 21
Our risks 27
Our compliance statements 32
Our Governance
Governance at a glance 42
2024 Code compliance 43
Board of Directors 44
Corporate Governance report 46
Nomination committee report 49
Audit committee report 52
Directors’ Remuneration report 56
Directors’ report 68
Statement of
Directors’ responsibilities 71
Our Financials
Independent Auditor’s Report 73
Consolidated income statement 81
Consolidated statement
of financial position 82
Consolidated statement
of changes in equity 84
Consolidated statement
of cash flows 85
Notes to the consolidated
financial statements 86
Company statement
of financial position 114
Company statement
of changes in equity 116
Notes to the Company
financial statements 117
Important information 122
Glossary 123
01
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
13.3m 9,500 2,884 31
AO World at a glance
The AO Family
Key
Outbase (17)
Warehouses (7)
Oces (5)
Recycling Plant (2)
What we do
With over 9,500 electricals available on
ao.com from MDA to mobiles, blenders to
BBQs and TVs to toasters, millions of happy
customers and members choose AO again
and again because we deliver quickly,
oering quality installation services and
full recycling and recommerce capabilities
alongside nance and insurance products.
All underpinned by our trusted service
that’s magic in the moments that matter.
Where we do it
1
How we do it
Employees
FY25: 3,133
Employees include anyone
employed by the group.
Products
FY25: 9,000
Products is the total number
available for sale on ao.com.
Customers
FY25: 12.5m
A customer is dened as an
individual customer who has
purchased via ao.com.
Locations across
the UK
A location is dened as a
depot, warehouse or oce
space being used by the
AO group.
1 Certain sites have been aggregated where they
are geographically proximate for visual clarity.
Number in brackets is correct as at May 2026.
AO includes ao.com, ao-business, ao recycling, ao logistics and ao outlet.
02
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
AO World at a glance
continued
Our ecosystem behind
every brilliant experience
Our in-house logistics network comprises
seven distribution centres, with a total of
over 2m sq ft, 17 delivery depots and around
800 trucks and 300 trailers. This enables
nationwide delivery seven days a week, with
next day options and dynamic time slots.
The AO ecosystem brings together
expertise and services across retail
platforms, including recommerce,
in-house logistics, nancial
services, a dedicated recycling
plant and a recently launched
mobile network. Together, this
creates a seamless, one-stop
shop that makes buying, owning
and recycling electricals simpler
for customers.
Our customers are at the heart of everything we
do. Our eco-system constantly evolves to meet
changing customer needs and market demand,
ensuring we achieve our mission. It’s not about
what we do though – it’s about how we do it.
1
3
Multiple e-commerce platforms provide
access to over 9,500 electrical products.
Bespoke content, including imagery,
videos, how-to guides, lifestyle content and
energy-eciency ratings, is created by an
in-house multimedia team. Pricing tools
monitor the market several times a day to
maintain competitiveness, while My Account
functionality allows customers to order,
review and amend purchases up to the day
of delivery. If our customers want to talk to
somebody, they can call our contact centre
7 days a week.
Seamless
purchasing process
We recognise that our customers need options
as to how they pay for their products, and they
want peace of mind. On behalf of NewDay,
we promote a range of credit products at
competitive rates, but also use 0% interest
free oerings and buy now pay later for
promotional purposes. We ensure adherence
to responsible lending practices and provide
simple and clear nance options for our
customers. AO also works with Domestic &
General, the UK’s leading specialist warranty
provider, to oer product protection plans that
provide reassurance if repair or replacement
is required.
2
Payment options
and peace of mind
Dynamic distribution
and services
Our in-house state-of-the-art WEEE (Waste
Electrical and Electronic Equipment)
and plastics recycling facilities in Telford
recycles well over one million large domestic
appliances each year. Over 40% are
processed using Bertha, the Group’s fridge-
shredding machine. Plastics recovered are
rened through AO’s purpose-built recycling
plant, with annual capacity of 25,000 tonnes,
producing high-quality materials for reuse in
new products and appliances.
5
Recycling
Our reverse supply-chain platform,
musicMagpie, enables customers to trade
in old technology and purchase second-life
products. Where possible, returned products
are resold through ElekDirect or other
third-party outlets.
6
Recommerce
Our services include the basics of unpacking
and inspecting customers’ products,
removing packaging and the old product to
be recycled, to complex gas cooking and
integrated installations – we go the extra mile.
4
Extra mile engagement
03
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Chair’s statement
Strong performance
built on trust and
discipline
FY26 was a standout year
for AO, delivering record
prot of £50.5m, strong cash
generation and the Company’s
rst share buyback.”
Geo Cooper
Chair
FY26 was a standout year for AO, delivering
record prot, strong cash generation and the
Company’s rst share buyback.
This was achieved against a challenging and
uncertain external environment, providing clear
evidence of the strength and resilience of our
business model alongside AO’s continued focus
on simply doing the right thing for customers,
colleagues, shareholders and the wider
communities in which we operate. We believe
strongly this approach delivers the best long-
term outcomes for all our stakeholders.
Our strategy is clear: to create sustainable value
by being the most trusted electrical retailer, built
on brilliant retail basics, a structurally low cost
model and a shared economics approach that can
be delivered with scale that aligns the interests
of customers and shareholders. During the
year the Board has continued to challenge and
support management in executing this strategy
with discipline, while ensuring service standards,
culture and governance remain paramount.
Financially, the Group delivered a strong and
resilient performance. Sales growth, improved
protability and a strong balance sheet reect
the strength of our operating model and benets
of scale.
Capital allocation remains a key focus for the
Board as we balance disciplined investment,
growth opportunities and appropriate shareholder
returns. Within this context, the Board executed
the return of capital to shareholders through the
Company’s rst share buyback, while retaining
exibility to invest for the future.
We are intending to return further amounts to
shareholders via a special dividend of £10m
and a new share buyback of £10m following
the circulation of the FY26 annual report and
accounts to shareholders. We will continue to
maintain this balanced approach as we consider
strategic investments to build our infrastructure
for technological advantage.
A central theme this year has been the continued
development of AO’s ecosystem and customer
relationships. Membership continues to deepen
engagement, drive loyalty and reinforce trust,
while new propositions such as AO Mobile (our
MVNO) and Switch24 (our low monthly cost
upgrade deal) demonstrate AO’s willingness
to innovate where it strengthens the customer
oer and aligns with our long term economics.
The Board closely monitors these initiatives,
recognising both their strategic importance and
the need to remain pragmatic and disciplined as
markets and customer behaviours evolve.
Sustainability continues to play an important
role in how AO creates long term value,
with a particular focus during the year on
integrating and progressing our recommerce
capabilities through musicMagpie. FY26 saw
the Group strengthen the link between retail,
trade in and second life channels to support
a more joined up customer proposition.
We recognise the strategic importance
of recommerce in deepening customer
relationships, improving value generated
across the product lifecycle and supporting
aordability alongside sustainability.
The Board views sustainability as an investment
in resilience and long term value, and remains
focused on ensuring activity is measurable and
aligned with our strategy.
Strong governance continues to underpin
everything we do. The Board devoted signicant
time during the year to strategy, risk management,
cyber security, data protection, health and
safety and organisational capability. Governance
considerations are actively explored in key business
developments such as digital transformation,
automation and selective outsourcing.
We welcomed Sophie Tomkins to the Board
during the year, strengthening our collective skills
and experience, and we continue to keep Board
composition, succession and eectiveness under
regular review. Peter Pritchard became Senior
Independent Director from 1 April 2026, further
strengthening the Board’s independent oversight
and governance.
People and culture remain critical to AO’s
success. The Board receives regular insight into
engagement, wellbeing, talent and culture, and
continues to balance the need for eciency and
performance with our responsibility to maintain
capability, fairness and inclusion. We are pleased
that engagement and retention remained
strong during a period of change, reecting the
commitment of AOers across the Group.
Looking ahead, the external environment remains
uncertain and the pace of technological change
continues to accelerate. The Board is condent
that AO is well positioned to navigate these
challenges, supported by a strong balance sheet, a
clear strategy and a high performance culture that
embraces change while staying true to our values.
This positioning is supported by a management
team that actively explores market and
technological opportunities with a commendable
open mind and approach to learning. We remain
mindful of emerging risks, including cost pressures,
cyber threats and the organisational impacts
of further transformation, and will continue to
exercise careful oversight as the business evolves.
On behalf of the Board, I would like to thank our
colleagues for their continued commitment, our
partners and suppliers for their support, and
our shareholders for their trust. The progress
made during FY26 gives us condence in the
long term prospects of AO, and I look forward
to the year ahead.
Geo Cooper
Chair
16 June 2026
04
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Chief Executive’s review
FY26 has been another year of steady progress.
Our continued focus on delivering an exceptional
customer experience and value proposition
alongside disciplined nancial management
saw market share growth across all categories,
strengthening our position in an uncertain
external environment.
We achieved sales of £1.27 billion and delivered
prot before tax of £50.5 million, reecting our
structural cost advantage, the resilience and
relevance of our model and our ability to adapt
quickly as conditions change.
Our balance sheet has never been stronger.
Having completed our rst £10m share buyback
during the year, we had cash of over £81 million
at year end, complemented by an undrawn £120
million revolving credit facility. This provides over
£200 million of available liquidity and gives us
signicant exibility for future investment and
provides a great baseline from which to apply
our capital framework.
When we think about how best to return capital
to shareholders, we have a balance sheet oor
over which we will evaluate the return we can
achieve on our planned capex requirements and/
or other growth opportunities whether organic
or acquisitive. We will balance the surplus returns
through share buybacks and special dividends.
While our strategy is long term, we are
not immune to external uncertainty. Cost
ination, shifts in consumer demand and rapid
technological change continue to aect the
retail landscape. This requires an invest-to-save
mentality at times. For example, our oshoring
programme has had meaningful double running
costs while we learn how to achieve savings
without impacting AO standards. We will never
take the savings if service is sacriced.
Electrical retail is a low frequency, high ticket
purchase for customers. It has high price
transparency and low product dierentiation
between retailers. So, in 2022 we launched
AO membership as a mechanism to deepen
relationships with customers and give us
the platform to return more of the shared
economic gains through exclusive discounts and
propositions as well as other benets in return
for a greater share of spend from customers.
Today, our membership programme continues
to go from strength to strength, with all key
metrics improving. It remains central to our
customer engagement strategy and is proving
highly eective in driving loyalty and repeat
purchases. It’s no quick x or silver bullet but
what normally takes a while to work out and is
dicult to achieve is normally a decent moat.
musicMagpie, our recommerce business, is now
run rate protable on an annualised basis and
has launched a successful collaboration with
Timpson, enabling customers to trade in tech
for instant cash at locations nationwide, a great
example of consumer convenience aligned
to sustainability. It’s early days but we’re very
excited about its potential.
The Magpie team have celebrated their rst
anniversary with us and I’m delighted with
how the cultures have come together, which
is testament to Steve Oliver’s leadership.
Our Mobile business, which connects customers to
our network partners (O2, Three and Vodafone),
has been operating in a tough market for
several years. Changes in how customers buy
handsets and SIMs, longer contract cycles and
the growth of SIM-only oers have put pressure
on the economics of bundled mobile contracts.
AO has a long term
focus. Our investment
case is to create value
through our ywheel
that shares value with
our members at scale,
through structural
cost advantages and
an obsession with
world-class service
quality. In turn, the
same customers give
us a greater share of
their electricals spend
which further drives our
growth and operational
gearing. The benets
of scale, the brand
value of being the
most trusted electrical
retailer and our high
performance culture
are meaningful moats
around our business.”
John Roberts
Founder and CEO
05
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
AO World Plc
Annual Report and Accounts 2026
In response, we worked closely with the networks
to either reshape the category into something
that works mutually or to close it in an orderly
way. I’m pleased that the focus and creativity
across the network and client partnerships
have materially improved performance, and
the business is protable. If any of these key
relationships were to change for the worse, we
would be pragmatic and exit without drama.
This is AO doing what it does best: facing reality
early and driving a sensible, win-win outcome.
AO now has over one million Trustpilot reviews.
This is a world rst for any retailer in any category.
To achieve this at a rating of 4.9 out of 5 in a
low frequency category that is logistically
very dicult is an outstanding achievement.
We are immensely proud of this because it reects
the deeply ingrained obsession with customer
service AOers deliver every day. Doing this at
scale as a lowest cost operator is a huge moat
around our business. It is quite simply a way of
life at AO from me as the founder and CEO, all
the way through the business in both customer
facing and support roles.
Looking back over the last year, we can reect
with a sense of pride and achievement for a
job well done and I would, as ever, like to thank
all stakeholders; AOers, trading partners and
shareholders for their support. None of this
happens quickly or by accident.
Looking forward, there is much to be excited
about and a few grey clouds on the horizon.
The result of Government policy is higher cost at
every turn for businesses. Costs walk in on legs
and as those costs are increasing, historical labour
exibility is reducing. Simultaneously the capability
of AI, robots and automation is increasing
exponentially while cost is reducing quickly.
As a business, our primary responsibility is to
customers, sta and shareholders.
Chief Executive’s review
continued
We will continue to deliver our customers the
lowest prices through being a lowest cost operator
while protecting our world-class standards.
AO has a high performance culture, meaning
we continually communicate with our people
with candour for kindness not cruelty. People
can see what’s happening in the world and we’re
transparent about how it aects them. We are
always embracing technology to see how it
enables us to do things better and faster for less.
For example, so far, we have moved c.150 roles to
South Africa. It has taken time to recruit and train
the right people, to embed our culture and service
mentality but we’re out of learning mode and into
business-as-usual with a signicantly lower cost
base and far greater exibility whilst continuously
improving quality to serve customers better.
AI is clearly a hot topic and so we are taking a
parallel approach to it. There are clearly quick
productivity and eciency wins that we can
learn to capture for short term benet and we
are leaning into that every day.
We are keeping a very close eye on consumer
behaviour and adapting as we need to so that
we are making the most of the deep truths
that form our moat. We are already the best
range, price and delivery service as our 4.9/5
is testament. If AI shopping is informed by the
truth, then being the nation’s most trusted
electrical retailer is a pretty good starting point.
At the same time, we are reimagining our
whole business, end-to-end, from rst
principles with AI at its core. Given the level
of uncertainty around AI capabilities, costs
and what the models will be in the future, this
isn’t simple. How quickly customers will adopt
new behaviours and technologies is unknown.
However, our high-performing people and
culture thrives in a world of change. They
are seeing this as a generational shift that is
exciting to be part of. We are comfortable with
‘I don’t know’ being the answer while still being
willing to try at full speed.
We will back our intuition on innovation knowing
that not everything will work. We would rather be
70% right and fast than 90% right and too late.
We see an advantage in 13 years’ average
length of service on our senior leadership team.
They’ve lived some of these phases before and
have the condence and autonomy to invent,
experiment and correct.
At the heart of these changes is the constant
that our membership scheme beats to. The
compounding principles of shared economics,
brilliant retail basics and magic in the moments
that matter are incredibly powerful. I have
never been more convinced that we are on the
right track to deepen our relationships with our
customers and widen our moats around them.
That said, we are three years into the programme
now and still learning. Our new Switch24
proposition has broken new ground in making
phones aordable; you simply pay for the
handset depreciation and get a new phone every
24 months – it does what it says on the tin. That
said, the complexities through the journey have
not been insignicant for customers to navigate
and their understanding of a ‘new’ way to get
their hands on the latest tech requires education.
We thought the hard work was integrating
musicMagpie to enable the best residual value
combined with a completely new nance
product to create Switch24, when in reality,
getting a customer to understand that it really
isn’t too good to be true is the challenge! It’s
amazing how these things that are so obvious to
us are so rarely straight lines to success.
We have made huge progress this year with
compounding this amazing proposition with our
MVNO, AO Mobile, which recently launched.
It’s my deeply held belief that customers
who embrace Switch24 and AO Mobile will be
members for life. We’ll give them the lowest price
forever on their mobile and in return they will
give us their share of wallet on their electricals
spend. It is seriously tasty and sticky chicken –
once you’ve tried it!
To conclude, FY26 was a real success to be very
proud of.
Capital discipline has always been central to
how we run this business, and that does not
change as we grow. Our rst priority is always
the balance sheet – keeping it strong and
resilient, with the liquidity to trade condently
through whatever conditions we face. Beyond
that, we invest in the business where the
returns justify it, assessing every signicant
commitment against our cost of capital. And
where we generate surplus capital above those
needs, we will return it to shareholders in a
consistent and exible way – whether through
share buybacks where they represent an
attractive use of funds, or through additional
returns over time. We are custodians of your
capital. We take that responsibility seriously,
and we always will.
John Roberts
Founder and CEO
16 June 2026
06
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
£39 member fee
Shared Economics
Share of wallet
Best
People
Mums
& Grans
Human
Touch
It all
just works
Free of charge
recycling
Free of charge
delivery
Member
discount pricing
Awesome advice
and help to buy
Full
range
Best
price
World-class
personal service
100%
availability
Complete delivery
and services
proposition
Great brand
relationships
Brilliant Retail Basics
Trust
AO Brand
Finance account
PCP Mobile Handset
AO Mobile MVNO
Economic chicken
Sticky chicken
Check out our business model and
strategy video to learn more about
how we create brilliance.
At the heart
of what we do
This is driven by our unique
scaled economies shared model
We create value through our ywheel which
shares value with members at scale, giving
them ever more reasons to make AO their
default choice for all electrical purchases.
We’re cementing our position as
the most trusted electrical retailer
The best service should always be no service,
it should work perfectly every time, but when it
doesn’t then we are there to just put things right.
And built on a foundation
of brilliant retail basics
A brilliant product range and service,
at the best price, delivered to suit the
customer. Simple. No hassle.
Our customers sit at the centre of our strategic ywheel, driving our obsession for
being the most trusted retailer through compelling pricing, proposition and service.
In turn they will reward us with their hard earned spend, which will enable us to share
the value we create together through our scaled economies shared model.
Our business model and strategy
07
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
We obsess over brilliant retail basics: expert advice,
a complete range, market-leading prices, and outstanding
availability. With next-day delivery, convenient time slots,
installation and recycling included, we remove friction and
make choosing AO the simplest, smartest decision.
1
Our membership model shares value with customers.
For an annual fee, members receive free delivery, free
recycling and exclusive discounts across our range,
encouraging greater share of wallet while reinforcing
long-term value, transparency and trust for customers.
2
3
4
5
Making it a no brainer
to buy with AO
Trusted
to deliver
Sharing value
with customers
through membership
We operate a vertically integrated, low-cost model,
retaining control over logistics, service and recycling.
This eciency creates operating leverage as we grow,
freeing up investment to improve customer value while
maintaining high service standards and structural
cost advantages.
We deepen engagement beyond retail through member-
only nance, simpler checkout and exclusive propositions.
These reduce eort, increase convenience and embed
AO into customers’ everyday decisions, strengthening
retention while creating additional reasons to renew
membership year after year.
Delivering eciency,
control and value capture
Building enduring
customer relationships
By expanding relevant services such as mobile, handset
upgrade programmes and nance, we encourage members
to transact more often, across more categories. Greater
familiarity drives loyalty, embedding AO as customers’
default destination for essential technology purchases.
Building frequency,
familiarity and loyalty
Sharing value with our
members at scale
How our economics
model translates into
ownable actions
We want to deepen customer
relationships beyond retail basics
through a shared economics
approach that can be delivered
at scale, which customers trust,
and choose to invest in.
Economic chicken
The clear and meaningful reasons to
save money through membership is the
motivation for members to use it more and
to keep on renewing. The value comes from
free of charge recycling, free delivery and
special extra discounts for members only.
Sticky chicken
Focuses on increasing member transaction
frequency, familiarity and loyalty by
oering simple, fast-to-use nance
accounts and demystifying the mobile
market. Through AO Mobile and Switch24,
members can access a single all-inclusive
tari and the latest handsets at market-
leading prices, with the exibility to
upgrade every 24 months.
Our business model and strategy
continued
08
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Our markets
Market forces shape our
performance, from macroeconomic
conditions to evolving customer
expectations. Our ability to
identify, manage and respond to
the risks and opportunities these
dynamics create underpins how
we deliver sustainable value for
customers and shareholders.
We operate in large, competitive markets
inuenced by consumer condence,
technology, sustainability expectations
and geopolitical and economic uncertainty.
£28bn
9
AO’s current UK addressable market (MDA,
SDA, AV, consumer electronics, gaming,
mobile, garden and DIY, smart home and
personal care) estimate.
17.1%
(+1.3ppts)
AO remains a UK market leader in MDA,
with a 17.1% market share
9
.
Our Market size
Interest rates, ination and
consumer condence
Impact
Consumers’ spending power remained
constrained by a challenging macroeconomic
environment and was further impacted
during the latter half of FY26 by heightened
geopolitical disruption.
The Bank of England base rate fell from 4.5%
in April 2025 to 3.75% by March 2026
1
. The pace
of further easing was curtailed by geopolitical
conict, which drove a signicant increase
in global energy and commodity prices
1
CPI
ination rose to 3.3% in the twelve months to
March 2026,
2
having been trending towards
the 2% target prior to the conict. Ination is
now expected to remain in a 3.0%–3.5% range
through mid 2026 before easing back
1
.
The housing market is a signicant driver of
major domestic appliance (“MDA”) demand.
Residential property transactions in
February 2026 were 6% lower year-on-year
7
,
reecting the reversal of stamp duty relief in
April 2025 alongside rising mortgage rates.
Aordability constraints continue to weigh
on transaction volumes.
Business energy costs remain a meaningful
operational pressure. UK businesses are paying
approximately 50% higher electricity rates in
2026 than pre-2022 levels
8
.
Wage growth moderated to 3.6% in the period
December 2025 to February 2026 with a further
increase in National Living Wage in April 2026
4
will further increase business running costs
3
.
Consumer condence remains subdued. The GfK
index stood at -21 in March 2026, with the Major
Purchase Index down four points to -18
5
. Ongoing
nancial pressure has continued to support
demand for “Buy Now Pay Later” products.
Our Response
According to Reuters, UK interest rates are
expected to remain at 3.75% for the remainder
of the year
6
. Any resumption of the rate-cutting
cycle would improve mortgage aordability
and support a recovery in housing transactions
and MDA demand.
AO’s range of over 9,500 products provides
customers with choice across all price points.
The majority of MDA sales remain distressed
purchases, providing inherent resilience
against macro-economic headwinds.
AO has a fuel hedge in place until March 2027
(signed in December 2025) covering c.80%
of forecast fuel usage in FY27. Furthermore
the business has a xed price agreement
for materially all of its electricity usage until
October 2027 (signed in July 2025).
AO oers customers a range of nance options
through NewDay, regulated by the Financial
Conduct Authority (“FCA”), including revolving
credit and promotional instalment plans. Credit
limits are tailored to individual customer proles
to support responsible lending.
Key trends shaping
the market
By maintaining a broad, value-led product
range, disciplined cost control, operational
exibility and continued investment in our
digital platform, we aim to remain resilient,
protect margins and support long-term,
sustainable growth while continuing to
meet customers’ needs.
AO FY26 UK
product sales
£1,047.2m
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09
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
1 Bank of England,
Monetary Policy Summary and Minutes
, March 2026. bankofengland.co.uk.
2 Oce for National Statistics (“ONS”),
CPI Ination Bulletin
, March 2026. ons.gov.uk.
3 ONS,
Average Weekly Earnings in Great Britain,
April 2026. ons.gov.uk.
4 Low Pay Commission,
The National Minimum Wage in 2026
. gov.uk.
5 GfK Consumer Condence Barometer powered by NIM, March 2026. nielseniq.com.
6 Reuters,
BoE to hold interest rates through 2026 despite ination threat: Reuters poll
, 21 April 2026.
7 HMRC,
UK Monthly Property Transactions Commentary
, February 2026. gov.uk.
8 Connection Technologies,
UK Electricity Prices Per kWh 2026: Business Rates Explained
. connection-technologies.co.uk.
9 GfK/ NielsenIQ,
UK Electricals Market Data
. nielseniq.com. Due to the scale of the chart, some categories are not visible.
Values have been rounded to the nearest £bn.
10 Heimdal Security,
UK Cybersecurity Statistics for 2026
. heimdalsecurity.com.
11 Ipsos,
Price trumps planet? Britons want sustainable products, but on a budget
, April 2025. ipsos.com.
AO addressable market by year
9
Technology and the
customer journey
Impact
Online purchasing continues to gain share, with
67% of the electricals market now transacted
online
9
, driven by customer preference for low-
touch, app-led shopping and exible service
and delivery options.
Demand for personalised experiences continues
to rise, with consumers increasingly drawn to
subscriptions, membership propositions and
tailored product recommendations.
Rising online penetration has increased the
importance of cybersecurity. High-prole
ransomware attacks on UK retailers during FY26
10
have heightened customer expectations around
data security.
Our Response
AO’s website and app are designed to be simple,
intuitive and empowering, enabling customers to
shop in the way that best suits them. Customers
are supported in making informed decisions
through intuitive lters, detailed specications,
energy ratings and customer reviews.
Our “My Account” feature provides a
personalised experience, allowing customers
to manage and track orders from purchase
through to delivery. AO continues to invest in its
digital proposition, including enhanced product
visualisation and interactive content.
AO continually invests in the online proposition
with improved product visualisation and
interactive information, which enables a better
digital journey for our customers. Operational
gearing means we can move quickly to adapt
to customer demands with limited investment.
AO has invested and continues to invest
in leading customer identity and access
management technology to safeguard
customer data and maintain trust.
Environment/Net zero
Impact
Demand for energy-ecient products remains
strong amid high energy prices, with 65–70%
of consumers considering sustainability when
purchasing major appliances and c.35% willing
to pay more, although cost-of-living pressures
continue to constrain behaviour
11
.
Our Response
AO views sustainability as an investment that
supports long-term relevance with customers,
suppliers and colleagues, while also driving
cost eciencies.
Detailed energy ratings on AO’s website support
informed and ecient purchasing decisions.
Since inception, AO’s in-house recycling plant
has recycled over 9.9 million products.
With a delivery network of over 680 vehicles
on the road 364 days of the year we are
continuously looking at ways to reduce our
carbon footprint that make sense to our
operation. Alongside our eet partner we have
launched a trailer which increases load and
eciency by c.5%, we also continue to roll out
the trial of electric delivery vehicles, with 10 now
part of our eet. We also expect that by 2035
the vast majority of the trunking eet will run on
compressed natural gas (“CNG”) or other lower-
carbon alternatives as technology develops.
musicMagpie capability positions AO in
the refurbished electronics market, aligning
with circular economy principles and
appealing to environmentally conscious,
value-driven consumers.
FY18
FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26
0
5
10
15
20
25
30
35
23
24
25
28 28
26
28 28
28
Our markets
continued
MDA
SDA
Personal Care
AV
CE
Mobile
Gaming
Garden & DIY
Smart Home
Lifestyle
£m
10
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Our brand
Trust is our
superpower
Trust is present in every customer interaction, from individual service
moments through to how we communicate and advertise. Trust is
not established through a single action; it is built over time, through
consistent behaviour, and sustained across multiple touchpoints.
We take this seriously.
Our ambition shapes how we operate across
the organisation, guiding how we listen to
customers, focus our eorts, and deliver the
experiences that matter most.
This consistent, trust-led approach continues
to resonate with customers. Brand tracking
indicates positive momentum across key
measures, with strong growth in awareness as
the brand scales and we maintain stable trust
levels. Customer anity continues to build,
and AO converts familiarity into loyalty more
eectively than the category average.
Building for the long term
Our brand and marketing strategy is built around
reinforcing trust as the foundation of our activity,
supported by three core focus areas: customer
insight, ecient media investment, and credible
real-world presence. In a complex category, this
approach ensures our investment is focused and
disciplined, helping us reach the right audiences
with messages that truly resonate. These
priorities are underpinned by our commitment
to building Trust, Fame and Love. Together, they
guide how we show up as a brand, strengthening
relevance and awareness at scale while creating
meaningful connections with customers.
Initiatives such as AO Membership and AO Finance
continue to deepen relationships with existing
customers by rewarding loyalty and reinforcing
AO as the rst choice for electricals. By combining
brand investment with a consistent focus on
customer experience, we are strengthening the
brand while laying the foundations for sustainable
long-term growth.
Building relevance in new
categories through insight
This year, our focus was rmly rooted in deepening
customer insight and understanding behaviour
at a more granular level, with particular emphasis
on the mobile category. Mobile is an increasingly
complex and competitive market, but one where
we believe we can make a meaningful dierence
by applying the AO way: putting the customer rst
and solving their problems.
These insights directly shaped the development
of Switch24 and AO Mobile and highlighted the
key tensions and barriers that informed how we
communicate value. Throughout, we focused
on extending the same AO-led customer service
and care through the proposition.
By grounding innovation in real customer needs
and insight, we have strengthened relevance and
condence as the brand expands into new areas.
Smarter reach, greater impact
Driving eciency through advertising remains
a core focus of our marketing. This year, we
sharpened our media investment to deliver
stronger value, reach and eectiveness.
A long-term partnership with Global has been
central to this, unlocking access to high-quality,
trusted environments and enabling broader reach
and consistent presence across key moments
through an ecient multi-channel model.
This has allowed us to engage audiences at scale,
build mental availability, and keep AO front of
mind where it delivers the greatest impact.
Showing up in the real world
As a digital-rst brand, maintaining a credible
and consistent presence in the real world
remains an important part of our brand
and marketing mix. These activities create
tangible points of connection, placing the AO
brand into everyday life and reinforcing trust
through action.
Sponsorship played a meaningful role this
year in extending our reach and relevance. Our
long-standing partnership with the AO Arena in
Manchester city centre continues to connect
the brand with a wide range of audiences at
scale, while enabling us to reward AO members
and employees through exclusive tickets and fan
experiences. This presence ensures AO is visible
in shared cultural moments and experiences that
bring families and communities together.
The renaming of Manchester Thunder to AO
Thunder marked a signicant evolution in
our approach, combining national visibility
with strong local and community relevance.
Aligning with one of the UK’s most successful
netball teams reects our commitment to
elite performance, regional pride and long-
term investment in women’s sport, while
also engaging directly with families and
grassroots participants closely aligned to
our core audiences.
Our Grassroots programme remains central to
building long-term brand connection at a local
level. By supporting community sports initiatives
and helping more children across the UK access
sport, we are investing in communities in a
values-led way, creating positive and lasting
connections with families over time.
Alongside this, our brochure continues to bring
the AO brand directly into customers’ homes,
reaching millions through a trusted and tangible
format that reinforces familiarity and condence.
11
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Trust built on scale
Reaching one million Trustpilot
reviews marks a dening milestone
for AO and a powerful endorsement
of the trust we have built with
customers over time. While
our Trustpilot score remains a
strong measure of performance,
it is the scale and consistency
behind that score, with the vast
majority rated ‘Excellent’, that
truly reects the strength of our
customer relationships. Together,
these form our clear, measurable
indicator of how well we deliver
against our promise to be the UK’s
most trusted electrical retailer.
Trust at AO is not a campaign or a lofty metric
alone; it is embedded into every touchpoint of
the customer journey. From the design of our
website to the experience delivered by our drivers
and customer service teams, we hold ourselves
accountable to a simple principle: treat every
customer like your gran and make decisions
your mum would be proud of. These beliefs guide
thousands of daily interactions, ensuring that
trust is consistently felt, not just claimed.
Crucially, this trust starts internally. Our
people believe in what we stand for, and that
belief drives the behaviours that customers
experience. By building trust from the inside out,
we ensure it is authentic, repeatable and a true
point of dierentiation.
Customer reviews are monitored and responded
to in real time, helping teams across the
business learn quickly, resolve issues and
continuously improve the customer experience.
By treating customer feedback as an engine for
improvement rather than a reporting metric, AO
has built a transparent, customer-led approach
to trust. As the brand continues to scale, Trustpilot
remains a vital proof point in AO’s ambition to
become the UK’s most trusted retailer.
1 million+
Customer reviews
ao.com/trust
Our brand
continued
I have used AO for about 12 years now, they can
always be trusted to deliver on time and install
if needed. Always a pleasant driver and back up
service, plenty of products to choose from and good
prices, would always recommend to look at rst.”
Sandy
AO Customer
March 2026
12
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Financial and Operational review
Financial performance
In the 2026 nancial year we remained focused on growing revenue while delivering prot and
cash. Against an inationary cost backdrop, we prioritised eciency and mitigated cost increases
through automation and process simplication.
Adjusted prot before tax increased to £50.5m, up 16.1% on revenue growth of 11.4%, reecting
improved gross margin and continued cost discipline across the Group delivering a PBT margin of
c.4%. This represents further progress towards our medium-term 5% PBT margin target, supported
by a stronger and more resilient operating model.
The Group also delivered a signicant strengthening of the balance sheet, moving from £35.9m net
debt to £16.4m net funds, underpinned by strong cash generation and disciplined working capital
management. The strong conversion of prot into cash has enabled disciplined capital allocation
in the year, including continued investment in the business, funding the EBT (£4.2m), a £10.1m share
buyback programme and a signicant strengthening of the balance sheet to a net funds position.
Operationally, this performance was driven by continued market share gains in core Retail, the
return to protability in Mobile and the rapid improvement in musicMagpie, alongside the strength
of our customer proposition. This is reected in market-leading customer satisfaction, with a
Trustpilot rating consistently above 4.9/5 across more than one million reviews, and continued
progress in our membership proposition, which is supporting increasing customer engagement
and long-term value creation.
While the external environment remains uncertain, we remain condent in our ability to continue
to grow revenue, improve protability and generate cash, supported by ongoing investment in
automation and our vertically integrated platform.
FY26 Financial Highlights
£m unless stated otherwise FY26 FY25 YoY change
Revenue 1,266.6 1,137.5 11.4%
B2C Revenue 911.0 831.9 9.5%
Adjusted Prot Before Tax 50.5 43.5 16.1%
Prot Before Tax 50.5 20.6 145.1%
Basic Earnings per share (p) 6.36 1.70 275.2%
Free cash ow 66.4 26.3 152.3%
Net funds/ (debt) 16.4 (35.9) N/A
Shareholder Returns
1
10.1 – N/A
1 Shareholder returns relate to purchase of own shares by the Company.
Adjusted PBT of
£50.5m, up 16.1% on
revenue growth of
11.4%, while moving
from £35.9m net debt
to £16.4m net funds.”
Mark Higgins
Group Chief Financial Ocer
and Chief Operating Ocer
13
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Financial and Operational review
continued
Revenue
1. Revenue
Year ended £m
31 March
2026
31 March
2025
%
Change
B2C Retail revenue 911.0 831.9 9.5%
B2B Retail revenue 103.0 116.9 (11.9%)
Mobile revenue 77.0 94.4 (18.4%)
Recommerce revenue 119.5 42.6 180.5%
Third-party logistics revenue 33.3 30.5 9.2%
Recycling revenue 22.7 21.3 6.8%
1,266.6 1,137.5 11.4%
For the 12 months ended 31 March 2026, total revenue increased by 11.4% to £1,266.6m (2025: £1,137.5m).
B2C Retail revenue
Revenue in our core B2C Retail business has increased 9.5% year on year. This increase is driven
by growth in product, service, delivery and product protection plan sales. Product revenue and
associated 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,
where our share of the total market grew by over 1pt to 17.1% but also in other key categories
including SDA and AV where we also made market share gains year on year.
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 by 11.9% year on year in B2B, as expected, in line with the Group’s focus on
optimising for protability. We expect a small single digit decline in revenue in FY27, but the reset
of B2B has been materially completed.
Mobile revenue
Mobile revenue decreased by 18.4% year on year, reecting the shift in focus towards prot generation.
As we prioritised margin optimisation and tighter acquisition cost disciplines, connection volumes
reduced as a consequence. This, alongside a softer market for new mobile contracts, resulted in lower
overall commission income from network partners.
Recommerce revenue
Recommerce revenue is generated from product sales through musicMagpie and ElekDirect,
as well as reworked recycled products through AO Recycling. Revenue grew year on year by
180.5% to £119.5m (2025: £42.6m), with the majority of the increase attributable to a full year
of musicMagpie consolidation.
Third-party logistics revenue
Third party logistics revenue increased by 9.2% year on year to £33.3m (2025: £30.5m), driven by
demand for our market leading expertise in complex two person delivery. We provide delivery and
related services for a number of third party clients in the UK, including Hisense and Simba. This
activity generates incremental protability by leveraging existing infrastructure and operational
capacity. The Group will continue to optimise this opportunity to benet from operational gearing,
while maintaining focus on the core retail business.
Recycling revenue
Recycling revenues increased by 6.8% during the year, representing a resilient performance given
the wider trading environment. Higher major domestic appliance sales and increased customer
uptake of our recycling services drove year on year growth in processed volumes, supported by
the introduction of palletised plastic processing. This increase in volumes was partly oset by a
reduction in output prices for recycled materials, reecting broader market conditions.
Gross margin
2. Gross Margin
Year ended £m
31 March
2026
31 March
2025
%
Change
Gross prot 316.1 276.0 14.5%
Gross margin 25.0% 24.3% + 0.7 ppts
Gross prot, comprising product margins, services and delivery costs, increased by 14.5% to
£316.1m (2025: £276.0m), exceeding the 11.4% growth in revenue. The 0.7 percentage point increase
in gross margin to 25% was driven by the pivot to prot in mobile as well as the inclusion of a
full year of musicMagpie trading. While inationary pressures and lower average selling prices
continued to impact delivery costs, these were more than oset by the operational eciencies,
targeted pricing actions and ongoing margin optimisation.
14
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Financial and Operational review
continued
Selling, general & administrative expenses (“SG&A”)
3. Selling, General & Administrative Expenses (“SG&A”)
Year ended £m
31 March
2026
31 March
2025
%
Change
Advertising and Marketing 53.5 44.4 20.4%
% of revenue 4.2% 3.9%
Warehousing 75.1 62.0 21.1%
% of revenue 5.9% 5.4%
Other admin 138.2 125.7 10.0%
% of revenue 10.9% 11.0%
Administrative expenses before adjusting items 266.7 232.1 14.9%
% of revenue 21.1% 20.4%
Adjusting items – 22.9 N/A
% of revenue – 2.0%
Total Administrative expenses 266.7 255.0 4.6%
% of revenue 21.1% 22.4%
SG&A costs, excluding the adjusting items (see Alternative Performance measures for further
detail) increased to £266.7m (2025: £232.1m). The drivers of the increase were as follows:
Advertising and marketing costs increased to £53.5m (2025: £44.4m), primarily reecting the
consolidation of a full year of musicMagpie trading, which contributed approximately £3.5m of
the increase. Continued investment in brand awareness also resulted in a year on year increase of
around £1.0m, including spend on merchandise.
A highly competitive marketplace, combined with subdued market growth and an inationary cost
environment, led to increased investment in direct customer acquisition channels, particularly PPC,
which increased by approximately £8.4m year on year. These increases were partially oset by a
reduction of around £4.0m in Mobile acquisition spend following the successful pivot of the Mobile
business to a protable and more sustainable operating model.
Approximately 30% of warehouse costs relate to infrastructure and running costs for warehousing
and outbases across the logistics business as well as the infrastructure costs relating to
musicMagpie warehousing and for our inhouse recycling plant. The remaining c.70% of warehousing
costs relate to people related costs which have been impacted by ongoing inationary pressures.
Of the £13.1m increase in warehousing year on year, musicMagpie accounts for £7.3m of increase
with the remainder of the increase attributable to volume increase and inationary pressures on
labour costs. The business continues to look to oset the impact of ination through eciencies
and advancements in the use of robotics in warehousing.
Other administrative costs decreased marginally as a percentage of revenue, with total spend
of £138.2m (2025: £125.7m). The inclusion of musicMagpie for a full year accounts for £11m of the
increase. Inationary pressures, primarily wage-driven, together with continued investment in our
ERP programme, have been partly oset by oshoring and ongoing right-sizing of the business.
Adjusted prot before tax
Adjusted prot before tax (“Adjusted PBT”) is used by the Group as an additional measure to
assess underlying nancial performance and is consistent with how performance is monitored by
management and the Board.
There were no adjusting items in the year, with Adjusted PBT therefore equal to reported Prot
Before Tax. This represents a positive step in the quality and transparency of earnings compared
to the prior year, where results included a number of one-o and non-cash items.
£m FY26 FY25 YoY change
Reported PBT 50.5 20.6 145.1%
Adjusting items – 22.9 (100%)
Adjusted PBT 50.5 43.5 16.1%
In the prior year, adjusting items related to acquisition-related costs and non-cash impairments of
goodwill and intangible assets in the Mobile business, which are excluded to aid comparability of
underlying performance.
Earnings per share
Earnings per share were as follows:
12 months ended £m
31 March
2026
31 March
2025
Prot
Prot attributable to Owners of the Parent Company from
Continuing operations 35.9 9.7
Prot attributable to Owners of the Parent Company from
Discontinued operations – 0.8
Earnings attributable to owners of the parent company 35.9 10.5
Adjusting items – 22.9
Adjusted earnings attributable to owners of the parent company 35.9 33.4
15
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Financial and Operational review
continued
12 months ended £m
31 March
2026
31 March
2025
Number of shares
Weighted average shares in issue for the purposes
of basic earnings per share 564,430,910 571,918,807
Potentially dilutive shares 22,737,153 21,413,462
Weighted average number of dilutive ordinary shares 587,168,063 593,332,269
Earnings per share from continuing operations (pence per share)
Basic earnings per share 6.36 1.70
Diluted earnings per share 6.11 1.63
Adjusted basic earnings per share 6.36 5.70
Earnings per share from continuing and discontinued
operations (pence per share)
Basic earnings per share 6.36 1.83
Diluted earnings per share 6.11 1.76
Adjusted basic earnings per share 6.36 5.84
Adjusted basic earnings per share is calculated by adding back the Adjusting items in the prior year
noted above.
Operational highlights
B2C Retail
Our B2C Retail business remains one of the UK’s market leaders in major domestic appliance
(“MDA”) retailing, serving customers primarily through our ao.com website and selected third
party marketplaces. Alongside our core MDA oer, we continue to broaden our range across
SDA, computing, AV, mobile, consumer electronics, gaming and smart home products.
ao.com continues to be the cornerstone of our retail operations. We dierentiate through our
strong customer proposition underpinned by market leading service levels, competitive pricing,
broad product choice and exible options across delivery, installation, recycling and payment.
We continuously monitor the market to ensure our pricing and proposition remain competitive
and aligned to customer expectations.
Customer engagement remained strong throughout the year. Over 720,000 new customers chose
to buy from AO, taking our total historical customer base to 13.3 million. We continue to maintain
market leading customer satisfaction, with a Trustpilot rating consistently above 4.9 out of 5
across more than one million reviews. These satisfaction levels continue to support high levels of
repeat purchasing and reect our continued focus on delivering a consistently strong customer
experience and getting it right rst time.
Membership continues to perform well, supported by an expanding range and a broader
ecosystem of customer benets, including Switch24 and our recently launched MVNO proposition.
All key underlying performance measures, including commercially sensitive metrics, remain
positive, with growth in member numbers, improved renewal rates and members contributing an
increasing share of wallet.
MDA remains our core category and central to our strategy. During the year, our share of the MDA
market increased by over 1 percentage point to 17.1%, demonstrating continued share gains in a
competitive market. We have also continued to expand our broader product range, with customers
now able to access over 9,500 products across the site. During the year, we began exploring
opportunities to expand into original equipment manufacturer (“OEM”) propositions within audio
visual categories. Whilst we are only in the early stages, the initiative has generated valuable
learnings, with future expansion expected to focus primarily on MDA.
In the second half of FY26, we launched Switch24, our new mobile handset proposition. Initial
performance was impacted by supply constraints, particularly around iPhone availability, and by
the need to simplify customer messaging to more clearly articulate the value of the oer. Building
on these learnings, the launch of our own mobile virtual network operator (“MVNO”), which launched
in early FY27, will complete our vision for a simpler and more transparent way for customers to
purchase mobile devices and connectivity.
Gross margin remained stable year on year, demonstrating the resilience of the B2C model despite
changes in customer purchasing patterns, brand mix, and ongoing logistics cost pressures (see the
logistics section below).
In response to ongoing inationary cost pressures, and particularly rising employment costs,
we have taken further steps to optimise our operating model. During the year, we successfully
outsourced the majority of our inbound sales operations to a carefully selected third party partner
based in South Africa whilst maintaining service quality for our customers. The savings delivered
from this initiative were c.£2m with an expected annualised saving of c.£4m with the impact of dual
running costs impacting in the year. Recruitment plans for the current year are expected to result
in the majority of our customer engagement operations being based overseas by the end of the
nancial year.
We continue to oer customers a broad range of payment and service options. Our long standing
partnership with NewDay, which provides customer nance and is regulated by the FCA, remains
a core part of our proposition, supporting customer choice and aordability, with nance uptake
at c.13% of sales. Our Care product protection oering also performed resiliently during the year,
as customers continue to recognise the value and peace of mind these plans provide. We remain
pleased with the performance of this proposition and the strength of our long term partnership
with Domestic & General, which extends to 2033.
Earnings per share continued
16
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Financial and Operational review
continued
Operational highlights continued
Mobile
The UK mobile market has continued to evolve, with customer demand increasingly shifting away
from traditional post-pay contracts towards disaggregated handset and airtime solutions. Given
the size of the overall mobile market and the fact that it’s the largest category in the electricals
sector by value, the category remains strategically important to AO, especially given the frequency
with which customers change their devices and the high level of engagement they have with
the category.
Against this backdrop of a structurally shrinking contract market, it was imperative that our post-
pay Mobile business addressed the underlying economics and secured sustainable arrangements
with the network operators on whose behalf we connect customers. During the year, we have made
good progress in reshaping the business, agreeing improved commercial terms with our network
partners, growing partnerships with Samsung and Lebara and materially reducing reliance on
high cost customer acquisition channels. As a result, the Mobile business is now protable, with
performance across all key metrics improving year on year.
While the market remains competitive, we are encouraged by the steady and protable
performance delivered in the period. Our focus is now on concluding longer term agreements with
the networks to provide greater economic certainty and support continued disciplined growth.
Post year end, we launched AO Mobile, starting with friendly user trials, which will be expanded
in further phases, with full launch expected within the rst quarter of FY27. We look forward to
combining this with our Switch24 product and we expect the proposition to reect customer
demand for simple, low monthly pricing, providing access to the latest iPhone alongside a
SIM-only plan.
musicMagpie
In a little over 15 months since acquisition, musicMagpie has moved from being a c.£6m loss-making
business to an annualised run rate protable business. This turnaround reects a series of decisive
actions taken during the period, including the exit from the loss-making US operation and the
consolidation of the warehouse footprint to improve eciency and cost control.
Access to product supply, particularly in consumer technology such as mobile phones, is a key
driver of protability in recommerce. During the year, musicMagpie commenced a partnership
with Timpson, enabling customers to trade in their mobile phones for cash in over 1,300 stores
nationwide. This materially broadens access to supply and we expect to extend the model to
additional technology categories over time.
The acquisition of musicMagpie has also benetted the implementation of our Switch24 project.
With over 15 years’ experience in the mobile recommerce market and acting as a key outlet for
Switch24 devices, musicMagpie is integral to Switch24’s protability and therefore to the economics
of our broader membership proposition.
The business continues to receive external recognition for its market leadership. musicMagpie has
been awarded a lifetime achievement award by eBay, recognising it as the largest seller in the
platform’s history with over 20 million positive feedback ratings. In addition, the 2026 Mobile News
Awards named musicMagpie Online Retailer of the Year.
Looking ahead, we continue to see opportunities to enhance capability and capture additional
value across consumer technology categories, while further strengthening our ESG credentials.
Over time, this is expected to improve the aordability of products for customers on ao.com and
further dierentiate the AO proposition.
Logistics
Our market leading in house logistics infrastructure enables the nationwide delivery of millions of
products each year, operating seven days a week and serving both AO’s retail business and third
party clients. The network is centred around our national hub in Crewe and spans warehouses and
distribution centres totalling over 2 million sq ft, as at today, supported by a network of 17 delivery
depots across the UK.
Labour represents a signicant proportion of costs across our warehousing and delivery
operations. As a result, inationary pressures arising from changes to National Insurance and the
National Living Wage in April 2025 had a material impact on operating costs of c.£8.5m across the
Group year on year. In response, we implemented a range of mitigating actions, including changes
to warehouse shift patterns, team structures and the management of returns operations, to
improve eciency and productivity.
Fuel and electricity are also material components of our cost base. In line with the Group’s hedging
policy, 80% of expected fuel usage has been hedged through to March 2027, and substantially all
electricity usage across the Group is xed until October 2027, providing greater cost certainty.
As part of the Group’s wider technology roadmap, we continued to progress the upgrade of our
warehouse management system, which is expected to be completed in FY28. This programme is
intended to improve operational resilience, scalability and data visibility across the network.
With a continued focus on prot and cash generation amid persistent inationary pressures, we
carried out a small-scale, exploratory trial during the year to test the use of robotics within our
warehousing operations. The early results are encouraging, and we are extending this trial into FY27,
including testing in a live operational setting, to develop our understanding further. We continue to
review opportunities to optimise our logistics network as part of our focus on improving eciency
and supporting future growth.
Investment in the delivery eet also continued, with a focus on increasing capacity and lowering
emissions. During the year, 160 new delivery vehicles were added, including 10 electric vehicles, as
we continue to evaluate the scalability of electric delivery solutions. In addition, we are targeting
2035 for the transition of the vast majority of our trunking eet to CNG (or other lower-carbon
alternatives as technology develops).
Our operations remain highly adaptable to the retail business’s demand for driver resources and
are able to leverage operational gearing through third party logistics volumes. Our expertise
in complex two person delivery, which is highly valued across the industry, enables incremental
protability whilst ensuring strong service levels in the core retail business.
17
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Annual Report and Accounts 2026
Financial and Operational review
continued
Operational highlights continued
Recycling
Our recycling facility in Telford is one of the most sophisticated refrigeration recycling plants
in Europe and operates to the highest UK and European environmental standards. The plant
ensures the safe and ecient capture of environmentally harmful gases and oils, supporting
both regulatory compliance and our ESG objectives.
The facility specialises in the recycling of refrigeration products, including large American style
refrigerators, while also processing all other domestic fridges and a wide range of white goods.
Where appliances are assessed to still have a viable useful life, our highly skilled repairs team
refurbishes these products, which are then sold with a warranty through our established base
of trade customers, maximising reuse outcomes.
For end-of-life products, our focus is on maximising value recovery from raw materials. To support
this, we have developed a bespoke plastics rening facility alongside the recycling plant, enabling
us to process plastic output into higher value, commoditised forms rather than lower grade
waste streams.
During the year, we recycled or reused 1.26 million products, bringing the total number of products
recycled to 9.9 million. While global commodity price pressures during the year have reduced
recycling input values and increased net processing costs, we continue to actively manage this
through operational eciency and downstream value optimisation.
We remain committed to ongoing investment in our recycling operations. This includes the
acquisition of 120k square feet of additional space and further investment in the plastics facility
to enable the conversion of plastic waste into rened pellets, a more standardised and higher
value product. Our circular economy partnerships with customers such as Volution Group and
Ultra Polymers continue to strengthen, with processed plastic pellets repurposed into new products
including ventilation components. Our medium term strategic objective remains “Closing the
Loop”: forming deeper partnerships with manufacturers to supply recycled materials back into
the production of new electrical appliances, thereby maximising value recovery.
Our vertically integrated logistics network continues to support the collection of third party
volumes, including from local authority amenity sites. This approach improves service eciency
while reducing vehicle miles and associated emissions.
We continue to monitor potential legislative developments, including Extended Producer
Responsibility and proposals that may require retailers to collect old appliances free of charge
at the point of delivery of new products. While such changes would add complexity and cost to the
sector, our integrated logistics and recycling capabilities position us well relative to competitors.
Should these requirements be introduced, they could also create additional downstream recovery
and recycling opportunities for the Group.
Technology
Technology investment remains focused on improving operational eciency, reducing cost-to-
serve and enhancing customer experience, supporting the Group’s delivery of protable growth.
Total ERP Programme expenditure in FY26 was £3.8m (FY25: £2m). In the year we progressed
Phase 2 of our ERP programme, the replacement of our warehouse management system, which
is expected to simplify processes across supply chain and warehousing operations and improve
data visibility.
We replaced our contact centre platform during the year which didn’t go as smoothly as we hoped.
We now look forward to building AI solutions on top of it, to improve customer experience and
lower costs.
We continue to deploy data and analytics, including targeted use of AI, in specic operational areas
such as demand forecasting, pricing optimisation and customer service automation, where benets
can be clearly measured in terms of cost and performance. Cyber security remains a priority, with
continued investment in resilience, governance and monitoring capabilities.
Technology investment is expected to increase in FY27 as these programmes move into implementation,
with a continued focus on disciplined returns, operational eciency and scalable growth.
Cash, balance sheet and capital allocation
The Group delivered strong cash generation in the year, with a cash inow of £53.9m
(2025: £12.7m outow), resulting in a signicant strengthening of the balance sheet and a
move to a net funds position at year end. Available liquidity increased to £201.3m, supported
by strong operating performance and continued capital discipline. The table below highlights
the key movements:
31 March
2026
31 March
2025
Cash ow from operating activities 95.7 58.0
Cash ow from investing activities (3.9) (13.5)
Cash ow from nancing activities (37.9) (57.2)
Cash inow/ (outow) in the year 53.9 (12.7)
Purchase of shares by Company & EBT
(net of employee contributions) 12.5 11.0
Acquisition of musicMagpie (including payment of debt) – 28.1
Free cash ow 66.4 26.3
Free cash ow increased to £66.4m (2025: £26.3m), reecting strong operating performance,
disciplined investment and improved working capital management. This level of cash generation
provides the Group with increased exibility to invest in strategic growth, return capital to
shareholders and maintain a resilient balance sheet.
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Annual Report and Accounts 2026
Capital allocation
The Group operates a disciplined capital allocation framework designed to balance nancial
resilience, investment for growth and the return of surplus capital to shareholders in a consistent
and transparent manner.
The rst priority of the framework is to maintain a strong balance sheet and appropriate liquidity
headroom, reecting the working capital intensity and cyclical nature of the Group’s markets.
This includes ensuring sucient resources to absorb volatility, support trading and maintain
stakeholder condence through the cycle.
The Group does not manage the business to a xed leverage target. Instead, we adopt a disciplined
and exible approach to balance sheet management, ensuring that leverage, liquidity and
covenant headroom remain appropriate to the scale and cyclicality of the business. Our strong
cash generation and capital-light model typically support a low level of nancial leverage, with the
Group able to move between net funds and modest net debt positions depending on investment
requirements and market conditions. This exibility is a core component of our capital allocation
framework and enables the Group to respond dynamically to opportunities while maintaining
nancial resilience.
Beyond this, capital is allocated to support strategic investment in the business, including logistics,
technology and infrastructure initiatives necessary to drive sustainable long-term value creation.
All investment decisions are assessed against disciplined nancial criteria, including returns above
the Group’s cost of capital, cash payback and strategic alignment with our vertically integrated
model. In practice, this results in a selective approach to capital deployment, with investment
prioritised towards opportunities that enhance operational eciency, scalability and long-term
cash generation.
The Group’s growth strategy is primarily organic; however, we will consider opportunities for
targeted M&A where these are consistent with our strategy and enhance our capabilities.
All opportunities are evaluated on a disciplined, case-by-case basis within our capital
allocation framework.
While the specic return prole varies by project type, we remain focused on delivering sustained
improvements in ROCE over time. Where capital is generated in excess of these requirements, the
Board will consider returning surplus funds to shareholders. The level and certainty of such returns
are assessed against the Group’s nancial position, forward investment requirements and market
conditions, ensuring that exibility is preserved.
Consistent with this approach, the Group completed a £10.1m share buyback programme
during the year. Share buybacks are the preferred method of return where they represent an
attractive return relative to the Group’s cost of capital, providing exibility and value accretion for
continuing shareholders.
The Group will continue to apply this framework dynamically, ensuring that capital allocation
decisions remain aligned to long-term shareholder value while maintaining nancial resilience and
strategic exibility.
Cash inow from operating activities £95.7m (2025: £58.0m)
The cash inow from operating activities was largely driven by the post tax operating result of the
Group and a continued improvement in working capital management.
The Group’s movement in working capital outow is set out in the table below:
31 March
2026
31 March
2025
Inventories 87.4 88.5
Trade and other receivables 197.7 191.0
Trade and other payables (238.3) (212.9)
Net working capital 46.8 66.6
Inventory reduced by £1.1m year on year, reecting a deliberate rebalancing of stock aligned to
our strategic priorities. This movement was driven by two osetting factors: continued growth in
the Core Retail business, where we increased inventory by £13.0m to support category expansion,
improved availability and service levels; and a £14.0m reduction in Mobile stock. The decrease in
Mobile inventory reects our pivot away from chasing volume in the post-pay market, alongside a
disciplined and targeted programme to exit older stock lines. Overall, these actions demonstrate
tighter inventory management, improved capital eciency and a clearer focus on areas of
the business that generate sustainable returns. Inventory days were 40 days at 31 March 2026
(31 March 2025: 47 days).
Receivables increased by £6.7m year on year, driven by two principal factors. First, changes in
the mix of connections across mobile network operators resulted in a higher level of receivables
outstanding at the year end. Second, the timing of the Samsung S26 launch materially impacted
the phasing of connections, with stronger volumes in March 2026. By contrast, March FY25 volumes
were subdued due to the delayed launch of the S25, creating a lower comparative receivables
balance at the previous year end.
Payables increased by £25.4m year on year, primarily reecting the impact on trade payables of
the higher level of Retail inventories noted above. In addition, continued growth in membership and
the increase in sales resulted in higher deferred income liabilities. Creditor days at 31 March 2026
were 49 (31 March 2025: 52) reecting continued support from our supplier base with the reduction
driven by the mix of supplier balances at year end.
The strength of operating cash ow relative to prot also reects the improving quality of earnings
and disciplined conversion of prot into cash.
Financial and Operational review
continued
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Annual Report and Accounts 2026
Financial and Operational review
continued
Cash outow from investing activities £3.9m (2025: £13.5m)
Cash capital expenditure in the year was £6.0m (2025: £8.9m), with the majority relating to
continued investment in our Recycling facility, including the purchase of additional land (which had
previously been leased) and plant and machinery to drive further eciencies. Other additions are
mainly replacement in nature, including IT.
Reported capital expenditure is lower than the underlying level of investment in the business,
reecting the increasing use of lease and hire purchase arrangements to fund strategic
programmes. In particular, the Group has continued to invest in its logistics capability, including
the start of a signicant refresh of the delivery eet. A substantial proportion of this investment
is therefore reected within lease liabilities rather than capital expenditure, consistent with the
Group’s focus on capital eciency and balance sheet exibility.
On a combined basis, capital expenditure and lease-funded investment provide a more
representative view of the Group’s total investment in operational capacity during the year.
Looking ahead, we expect investment levels to increase in FY27 to c.£29m as key programmes
continue, including further eet replacement with the addition of 360 vehicles, technology
investment and infrastructure development, with the mix between capital expenditure and
lease-funded investment determined on a project-by-project basis albeit it is anticipated that
the vehicle funding of c.£22m will be lease funded. Consistent with our capital allocation priorities,
all investment decisions continue to be assessed against returns above the Group’s cost of
capital while maintaining balance sheet strength and funding capacity for future growth. Recent
initiatives, continued investment in our ERP transformation programme, expansion of our recycling
capabilities and the refresh of the eet have been progressed under this framework, balancing
upfront investment with expected eciency gains, scalability and long-term cash returns.
Higher cash balances throughout the year resulted in interest received increasing to £2.1m
(2025: £1.0m).
In the prior year, the Group acquired the whole of the issued share capital of musicMagpie for
net cash consideration of £5.7m.
Cash outow from nancing activities £37.9m (2025: £57.2m)
Financing cash outows in the year were primarily driven by ongoing structural obligations, with
capital and interest repayments on leases totalling £23.8m (2025: £24.5m), principally relating
to the Group’s logistics property estate and vehicle eet. In addition, other interest payments
amounted to £1.3m (2025: £2.3m).
Activity in relation to employee share schemes resulted in a net outow in the year. The Group’s
Employee Benet Trust acquired shares in the market for £4.2m (including fees) to satisfy awards
under share-based payment arrangements. This was partially oset by £1.8m of cash inows from
employees following the vesting of a SAYE scheme.
Consistent with our capital allocation priorities, the Group also completed a share buyback
programme during the year, resulting in cash outows of £10.1m (including expenses).
In the prior year, nancing cash ows included £19.1m of borrowings repaid following the acquisition
of musicMagpie.
Net funds and total net debt
As a result of the above movements, Net funds/ (debt) were as follows:
As at £m
31 March
2026
31 March
2025
Cash and cash equivalents at year end 81.3 27.4
Borrowings – Repayable within one year (0.2) (0.2)
Borrowings – Repayable after one year (1.5) (1.7)
Owned asset lease liabilities – Repayable within one year (3.2) (0.7)
Owned asset lease liabilities – Repayable after one year (11.5) (1.4)
Net funds excluding leases relating to right of use assets 64.9 23.4
Right of use asset lease liabilities – Repayable within one year (13.5) (17.7)
Right of use asset lease liabilities – Repayable after one year (34.9) (41.5)
Net funds/ (debt) 16.4 (35.9)
The Group delivered a signicant strengthening of its balance sheet in the year, moving from net
debt of £35.9m at FY25 to a net funds position of £16.4m at FY26. This £52.3m improvement reects
strong underlying cash generation and continued discipline in capital allocation, materially
enhancing nancial exibility at the year end.
Gross borrowings remain modest, with £1.7m (2025: £1.9m) relating to a mortgage used to part-fund
the acquisition of one of the Group’s recycling sites.
Total lease liabilities increased by £1.7m to £63.1m (2025: £61.4m), reecting capital repayments
of £20.2m broadly oset by £22.3m of new lease additions in the year. The composition of these
liabilities continues to evolve, with growth in “owned asset” lease liabilities driven by the ongoing
refresh of the Logistics eet, principally funded through hire purchase arrangements. We expect
to add a further 360 delivery vehicles during FY27 on hire purchase contracts as older vehicles
are replaced.
Right-of-use liabilities reduced by approximately £11m during the period, reecting the natural
run-o of the existing estate, partially oset by lease renewals. Looking ahead, we expect right-of-
use liabilities to increase in FY27 by c.£20m as a result of new leases plus the renewal of leases for
a number of key properties, albeit this is dependent on the timing and terms of these additions.
The Group maintains a strong liquidity position, supported by a £120m revolving credit facility which
remains fully undrawn and is available through to October 2028.
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Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Taxation
The tax charge for the year was £14.6m (2025: £10.9m) resulting in an eective rate of tax for the
year of 28.9%. The eective rate of tax is higher than the UK corporation tax rate for the period
of 25%, primarily due to the add-back of the IFRS 2 share-based payment charge for which no
corresponding corporation tax deduction has been recognised in the year.
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 has
performed an assessment of this legislation and does not expect a material exposure to Pillar Two
income taxes.
Our tax strategy can be found at ao-world.com/responsibility/group-tax-strategy.
Outlook and FY27 Priorities
Looking ahead, the external environment remains uncertain, with ongoing geopolitical
developments and continued inationary pressures impacting both consumers and input costs
across the economy. Notwithstanding these challenges, the strength of our value proposition,
disciplined cost management and continued investment in technology give us condence in our
ability to deliver FY27 PBT in line with current market expectations
1
. Our medium term objective
remains to deliver a 5% PBT margin.
Shareholder Returns
In line with our capital allocation framework and particularly our strong cash generation in FY26,
we are announcing the intention to return further amounts to shareholders via a special dividend
of £10m and a new share buyback of £10m following the circulation of the FY26 annual report and
accounts to shareholders.
Mark Higgins
Group Chief Financial Ocer and Chief Operating Ocer
16 June 2026
1 Market expectations as at 28 May 2026 can be found at ao-world.com/investor-centre/investor-analysis-and-research.
Financial and Operational review
continued
21
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
1
Making the
right impact
Our ESG strategy is made up of three pillars addressing our material
topics*, and our long-term objectives remain unchanged
Our operations, behaviour
and relationships with people
and communities have a wide
reaching impact.
Sustainability at AO is about
doing the right thing in a way that
strengthens our business. By
investing in circularity, improving
eciency across our operations
and supporting customers
to make more sustainable
and aordable choices, we
reduce waste and carbon while
creating long term value. We
also recognise that none of this
is possible without our people
and the communities in which
we operate, and we continue to
invest in them and give back in
ways that reect our values.”
Julie Finnemore
Legal Director and
Company Secretary
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Sustainability
We align our purpose, values and strategy with
stakeholder needs to create long term value in
a way that is responsible, ecient and resilient,
treating sustainability as an investment that
protects the planet while reducing cost and
waste across our vertically integrated model.
190k
Consumer Tech put into Reuse
(FY25: 191k)
1.26m
MDA units recycled
(FY25: 1.17m)
4.2k tonnes
Packaging processed
(FY25: 3.6k)
11.1k tonnes
plastics processed
(FY25: 9.3k)
2 3
18.45
Carbon intensity ratio
(FY25: 19.81)
80.3
Engagement Index Score
(FY25: 81)
* A materiality assessment was conducted in 2022 to identify the topics that are driving AO’s current and future ESG
performance, dening these as risks, impacts or opportunities. As part of our enterprise risk management processes
we have this year revisited the assessment and report that our material sustainability risks remain unchanged as
against previous years.
22
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
1. Reuse
and Reduce
Our ambition is to build a genuinely circular
model for consumer technology.
By reconnecting products with customers
through recommerce, and safely recycling
materials that cannot be reused, we aim
to minimise waste, and capture long term
value from products and materials – while
at the same time reducing our carbon
footprint and our use of natural resources in
our operations, protecting the environment
and communities in which we operate.
Recommerce
Through musicMagpie, c.190,000 used consumer
technology products were resold or rented in
FY26 (broadly at YoY). Towards the end of the
period, we launched the Timpson smartphone
trade-in initiative, providing a simple route for
customers to return unwanted devices. Rework
volumes increased by 10% as throughput
improved and additional capability was added
to support customer retention across Switch24.
Magpie also resells millions of books and
disc media each year that would otherwise
become waste.
Our reverse supply chain division ‘ElekDirect’
resold c.54,000 returned appliances
(FY25: 47,000) and we expanded rework
capability, enabling appliances previously
treated as disposals to be processed, retail
graded and resold.
Alongside this, we continued to strengthen
circular practices through initiatives such as
AO Armour, a reusable protection system now
deployed more than 25,000 times. Appliances
unsuitable for resale were stripped for viable
spare parts, supporting both internal repairs
and consumer self repair, further extending
product life and reducing waste.
A further c.35,000 items initially collected as
waste were reworked and resold through our
Telford capability (FY25: 38,000).
Recycling
During FY26, 1.26 million major domestic
appliances were recycled at our Telford
facility, taking the total to 9.9 million since
the facility opened in 2016. This capability
supports customer benets through our
membership scheme and positions us well as
extended producer responsibility is looking to
require retailers to nance and organise product
take back.
FY26 was the rst full year of converting
plastic regrind ake into pellets. Over 4,000
tonnes of pellets were produced and sold to a
growing customer base, supported by retained
RecyClass and WEEELABEX accreditations. This
helped customers reduce reliance on oil-based
virgin plastics and progress their sustainability
goals. Our fridge from a fridge project continues
and we have completed successful trials with
our chosen manufacturing partner. We are now
in discussions on range and design.
ao.com also increased packaging collections
ahead of sales growth. Over 4,000 tonnes
of packaging were collected and recycled
during the year, up almost 18% by weight
year on year. Our collection at delivery model
ensures cardboard remains dry and recyclable
and enables expanded polystyrene – rarely
accepted through kerbside schemes – to be
recycled responsibly, while minimising
additional transport related emissions.
Carbon Reduction
AO is committed to reducing carbon emissions
across its operations where practical and cost
eective. Overall, our carbon intensity improved
by 6.90%, demonstrating continued progress in
decoupling emissions from revenue growth.
Fleet and gas (Scope 1)
The direct emissions of the AO Group for FY26
represented c.1.2% of our total emissions, broadly
in line with the prior year. The major contributor
to our Scope 1 emissions continues to be UK
diesel, reecting the operation of our in house
logistics and recycling eets. The transition
to a decarbonised eet remains a long term
strategic priority for the Group.
Ambition
Sustainability
continued
190k
Consumer Tech put into Reuse
(FY25: 191k)
1.26m
MDA units recycled
(FY25: 1.17m)
11.1k tonnes
plastics processed
(FY25: 9.3k)
18.45
Carbon intensity ratio
(FY25: 19.81)
Timpson
smartphone
trade in
partnership
Through musicMagpie, we
partnered with Timpson to
remove friction from smartphone
trade ins and tackle apathy –
the biggest barrier to reuse.
Customers can “take it to Timpson” at over
1,300 UK locations, receive instant payment
and see devices re enter the economy
through refurbishment and resale. By
combining musicMagpie’s refurbishment
expertise with Timpson’s trusted high street
network, the initiative keeps more devices
in use, makes technology more aordable
and demonstrates the scalable potential of
circular models. Since launching the initiative,
we’ve seen an increase in the proportion
of customers who complete their trade in,
from conrming online through to devices
being received into our refurbishment
operations, relative to other channels.
Case study
23
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Sustainability
continued
Understanding
the carbon
impact of
recycling
Case study
Looking ahead
Looking ahead, we will continue to expand
recommerce across the Group, with a
particular focus on musicMagpie, including
the Timpson partnership to increase
customer access and drive volume alongside
greater use of automation to improve scale,
consistency and eciency. Within recycling,
while the Telford facility is operating broadly
at capacity, we will continue to drive
incremental throughput and eciency
improvements and consider options for
additional or expanded sites to support
future growth. In carbon reduction, we will
progress our eet transition plans, trialling
new technologies as they become available
and actively seeking government support
as electric solutions mature. Alongside
this, we will continue to drive initiatives to
reduce electricity consumption across our
operations, including voltage optimisation
and other targeted eciency measures.
In absolute terms, Scope 1 emissions increased
modestly year on year (+875 tCO
2
e, c.+4.3%),
reecting the impact of updated emissions
factors and increased deliveries. Vehicle
related emissions have increased marginally
with slightly higher fuel consumption. This
has been partially oset by our investment in
telematics and early progress in transitioning
to alternative fuels.
During FY26, we continued to test lower emission
alternatives within our delivery eet. Ten electric
vans entered operation late in the year, with ve
Mercedes vehicles introduced in September and
ve Renault vehicles in November, operating
from four depots as part of the core home delivery
eet. Early performance has been encouraging
in terms of payload and range.
We also trialled two types of electric tractor
units. One trial was paused due to charging
constraints and will be revisited as new vehicle
variants become available. Another trial met
operational expectations. While electric tractor
units are becoming increasingly viable from
a range perspective, total cost of ownership
remains the primary limiting factor. We continue
to review adoption as technology matures,
electricity pricing stabilises and government
incentives evolve.
Alongside electrication, we continue to deploy
compressed natural gas (“CNG”) vehicles as an
interim solution. During the year, a further 20 Iveco
CNG tractor units joined the eet. To maximise
eciency, these were paired with 50 new longer
semi trailers, replacing older units and increasing
load capacity, reducing emissions per delivery.
Electricity (Scope 2)
Scope 2 emissions remain relatively small in
the context of our overall footprint. YOY we
increased our electricity usage, reecting
the expansion of our operations and a full
year on a non-renewable electricity supply.
This followed a commercial decision taken in
2024, with a planned return to renewable supply
from October 2026.
As a result, location based Scope 2 emissions
decreased by 4.83% but market based
emissions increased by 7.65%. Approximately
50% of Scope 2 emissions are generated by
our recycling sites, however see our Case
study: Understanding the carbon impact of
recycling overleaf.
During FY26, our focus was on reducing relative
electricity consumption across the estate
while maintaining cost discipline. We continued
to improve data accuracy through expanded
smart and half hourly metering and progressed
energy eciency initiatives including voltage
optimisation, LED lighting upgrades and
HVAC improvements across key sites. Voltage
optimisation installations at larger facilities are
expected to deliver electricity savings of around
9%. Preparatory work also continued to support
our transition back to REGO-backed renewable
electricity from October 2026, while ensuring
robust evidence capture for carbon reporting.
Scope 3 and sustainable products
Indirect emissions continue to dominate our overall
footprint. Scope 3 emissions accounted for 98.7%
of total Group emissions in FY26, consistent
with FY25. The overwhelming majority of these
emissions arise from the manufacture, use and
end-of-life treatment of the products we sell.
AO continues to actively inform customers
about energy eciency throughout the
customer journey and through marketing
emails and brochures.
Energy eciency is clearly signposted on
ao.com through prominent display of statutory
energy ratings, accessible explanations of
what those ratings mean in practice, and
clear descriptions of energy saving features
and running costs. This is enhanced by the
use of the Youreko Energy Savings Tool, which
converts technical energy eciency data into
estimated lifetime cost savings in pounds and
pence, applies simple comparative ratings, and
highlights lower energy alternatives where longer
term savings outweigh higher upfront costs.
During FY26, AO Recycling worked with Small
World Consulting to assess the downstream
carbon impacts of its recycling activities,
including both gross emissions and the
wider system benets delivered through
material recovery. Using an ISO 14044 veried
lifecycle assessment model the analysis
examined cooling appliances and large
domestic appliances across collection,
processing and end-of-life treatment. For
FY24 volumes processed, recycling activities
generated gross emissions of approximately
48,500 tonnes of CO
2
e. However, the recovery
of secondary materials and energy recovery
– primarily recycled metals and plastics – was
estimated to deliver avoided emissions of
around 129,000 tonnes of CO
2
e, as recycled
outputs displaced virgin material production
and more carbon intensive disposal routes.
This resulted in a net carbon benet of
approximately 80,000 tonnes of CO
2
e across
the AO Recycling system boundary assessed
1
.
1 In line with best practice, avoided emissions are reported
separately and are not oset against the Group’s Scope
1, 2 or 3 greenhouse gas emissions. Nonetheless, the
analysis demonstrates the signicant environmental
value of high quality recycling and informs decision
making across our circular operations.
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Annual Report and Accounts 2026
Sustainability
continued
2. Responsible
Retail
We operate a responsible, trusted
and resilient retail business that puts
customers rst, acts with integrity and
manages risk eectively across our
value chain.
We aim to uphold high ethical standards,
protect customer data, promote
fair outcomes, and maintain strong
governance, security and safety as our
business grows.
Data Protection and
information and
Cyber Security
We further strengthened our data protection
and cyber security arrangements in response
to an increasingly complex regulatory and
threat environment, and the growing scale and
sophistication of our digital operations. The Data
Protection and Information Security teams worked
closely together to ensure data protection by
design was embedded into strategic initiatives
and business as usual change, with particular
focus on complex programmes involving new data
ows, multiple brands and third party integrations.
This included the launch of our mobile virtual
network operator (“MVNO”), where end-to-end data
ows across group companies, network partners
and technology providers were fully mapped,
documented and appropriately governed. As
our operating model expanded, including
increased use of overseas service providers, we
undertook detailed transfer risk assessments
and implemented appropriate safeguards to
manage international data transfers.
Cyber security resilience was a key area of
focus throughout the year. We ran structured
cyber attack simulations as noted below, and
continued to enhance core controls, including
identity and access management, vulnerability
monitoring, incident response governance and
mandatory cyber and data protection training
across the Group.
During the year we also progressed our cyber
security maturity programme, including work
towards recognised standards such as ISO 27001,
alongside existing PCI DSS obligations. Governance
frameworks, policies and control documentation
were reviewed and strengthened, and independent
testing and assurance activity continued to
support ongoing improvement. Collectively, these
actions helped maintain a strong compliance
posture, support customer trust and ensure
preparedness for regulatory scrutiny and cyber
disruption as the business continues to scale.
Health and Safety
We continued to strengthen health and safety
performance across the Group, with clear
oversight through regular Board reporting and
a focus on embedding consistent standards
in higher risk environments. We retained key
external accreditations, including RoSPA Gold
standards in Logistics and Recycling and
continued alignment with ISO 45001 within our
Recycling operations, providing independent
assurance over the robustness of our health
and safety management systems. Performance
indicators remained positive across business
units, supported by enhanced risk assessments,
improved incident reporting and increased
management ownership of safety outcomes.
We also undertook targeted red team
exercises during the year, testing our ability
to respond eectively to serious incidents
and operational disruption. These exercises
supported the development of our crisis
management capability, helping to clarify
roles, improve escalation and decision making,
and strengthen alignment between health and
safety, communications and service continuity
planning. Alongside this, audit and inspection
activity was expanded and rened, enabling
better identication of themes, more focused
interventions and continued learning from
incidents and near misses.
Within Recycling, a particular focus during the
year was the continued development of employee
health monitoring. This included enhanced
monitoring of workplace health risks, promotion
of physical and mental wellbeing, and greater
use of data to identify trends that could aect
employee safety. Using a risk based approach,
we focused on tracking and supporting employee
wellbeing in areas of higher inherent risk, helping
to reduce avoidable health related disruption and
build a more resilient and sustainable workforce.
Collectively, these actions supported our wider
objective of embedding a proactive health and
safety culture that protects our people while
supporting operational resilience.
Ambition
During the year, we strengthened
our cyber resilience by delivering
a programme of cyber attack
simulations designed to test
our preparedness across
the organisation.
Scenarios were run at functional, senior
leadership and Plc Board level, supported
by external cyber and legal advisers, and
focused on realistic ransomware and data
exltration events. The exercises tested
technical response, decision making,
escalation, regulatory considerations and
external communications under pressure.
Insights from the simulations were used to
rene incident response plans, clarify roles and
improve coordination between technology,
legal, communications and operational
teams, strengthening our ability to respond
eectively to a major cyber incident.
Cyber resilience
through simulation
Case study
Ethical practices
During the year, we continued to embed ethical
practices across our operations and supply
chains, supported by clear governance, Board
oversight and a risk based approach to due
diligence. Our Modern Slavery Statement was
reviewed and approved by the Board, and reects
ongoing renement of how risks are identied,
assessed and monitored. Supplier onboarding and
procurement processes continued to incorporate
policy checks, contractual commitments and
audit rights proportionate to risk, while our cross
functional working group met to review emerging
risks and progress against prior year objectives.
In line with our Consumer Duty obligations, we
also continued to review our practices to ensure
fair outcomes for customers across product
design, communications and customer journeys.
Throughout the year, condential whistleblowing
arrangements remained available to AOers and
third parties, supporting a speak-up culture.
Looking ahead
Looking ahead, we will continue to embed
responsible retail practices as the business
evolves. Our focus will remain on strong
governance, resilient systems and consistent
standards across ethical practices, data
protection, cyber security and health and
safety, particularly as digital transformation,
automation and outsourcing progress.
Ongoing testing and data led oversight will
support eective risk management and
protect AOers, customers and partners.
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3. People and
Places
Sustainability
continued
Our ambition is to be a business where
people feel safe, valued and able to thrive,
and where our culture, leadership and ways
of working enable everyone to do their best
work and build lasting careers.
We aim to create inclusive, high-performing
environments, invest in wellbeing and
development, and make a positive
contribution to the communities in
which we operate.
Ambition
80.3
Engagement Index Score
(FY25: 81)
58%
(at 3 years’ service) Labour Stability
(FY25: 65% at 2 years’ service)
15%
Voluntary Turnover rate
(FY25: 17%)
Engagement, retention
and reward
During the year, we maintained strong AOer
engagement despite a period of organisational
change. Our Engagement Index Score remained
consistently at or around our target level of
80, supported by high participation across
engagement and pulse surveys demonstrating
a continued willingness among AOers to share
feedback and help shape the business. Survey
results again highlighted strengths in culture,
team support and sense of purpose, with AOers
reporting a clear understanding of how their
roles contribute to making customers’ lives
easier. We also introduced a Cultural Index
Score, recognising that measuring culture
matters as much as measuring engagement
to understand how AOers feel about how
things really get done at AO: the behaviours,
the atmosphere, the everyday experiences,
culture is the engine behind engagement.
This new metric indicates strong results in
belonging, representation, involvement and
support, reinforcing AO’s inclusive culture.
Retention remained healthy, with voluntary
turnover and labour stability exceeding
targets for successive years, supporting
capability and continuity across the business.
We recognise that increased stability has
limited internal movement in some areas,
inuencing feedback on career progression.
In response, we have invested in personal
and professional development for AOers to
broaden knowledge and expertise, increased
transparency around development pathways
and strengthened performance and career
conversations, supported by the continued
rollout of our
Leading with Impact
programme
to improve condence and consistency across
management teams.
As we increase our use of overseas outsourcing, we
recognise the potential impact on engagement,
capability and organisational culture.
We will actively manage this to ensure a consistent
experience for people and our customers.
Reward continued to play an important role in
supporting engagement. During the year, we
reinstated a performance-related approach to
annual pay alongside a cost-of-living underpin
for all AOers. We continued to review reward
and benets through the lens of fairness,
aordability and market competitiveness,
informed by engagement feedback and
ongoing dialogue with our people.
Wellbeing
During the year, we continued to invest in our
wellbeing strategy as a core component of
a sustainable, high-performing organisation,
reecting the evolving pressures faced by
AOers. Our approach focuses on mental,
physical, nancial and social wellbeing, with a
range of support available including digital GP
services, employee assistance programmes,
u vaccinations, eye care and nancial
wellbeing resources.
Mental health remained a key focus, particularly
within operational environments. We invested in
manager capability through targeted training
to help leaders recognise and respond to
mental health challenges, manage absence
eectively and support AOers with condence
and compassion. We also introduced the AO
Health Passport, enabling managers to record
reasonable adjustments in a consistent way and
reducing the need for AOers to repeatedly re
explain personal circumstances when changing
roles or managers. Flexible working continued
to be promoted where roles allow, supported by
initiatives such as holiday purchase schemes,
carry over exibility and alternative bank holidays.
Combined with active listening channels, these
measures helped identify emerging pressure
points early and support wellbeing.
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Annual Report and Accounts 2026
Supporting
young people in
Crewe through
The Dome
AO is a Founder Patron of
The Dome
, a new
OnSide Youth Zone in Crewe developed to
support young people aged 8–19, and up
to 25 for those with additional needs. The
partnership was selected by AOers and
reects AO’s commitment to investing in the
communities in which we operate. Through
nancial support and active AOer involvement,
AO is helping enable the delivery of high
quality facilities, mentoring and development
opportunities for young people in the local
area. During the year, AOers engaged with
the project through site visits, skills based
volunteering and leadership development
initiatives, including participation in youth led
projects that build condence, teamwork and
employability skills.
Case study
Looking ahead
Looking ahead, our focus will be on
sustaining strong engagement while
continuing to adapt our organisation in a
disciplined and responsible way to support
long term growth and resilience.
As we continue to explore opportunities to
enhance our operating model, including
selective use of overseas outsourcing, we
remain mindful of the potential impacts
on engagement, skills retention and
organisational culture. We will therefore
balance eciency with our responsibility
to maintain capability, support inclusive
leadership and ensure a consistent
experience for AOers and people across all
locations. Alongside this, we will strengthen
career pathways, invest in future-ready
skills and maintain open dialogue with
our people, while continuing to give back
to the communities in which we operate
through partnerships, volunteering and
local initiatives that reect our values. By
managing change thoughtfully, we aim
to remain a workplace where people feel
valued, supported and able to thrive.
Inclusion
During the year, we further strengthened our
commitment to inclusion, supported by clear
values, inclusive leadership and a zero-tolerance
approach to discrimination, harassment or
bullying. Engagement feedback and the Cultural
Index Score indicate that belonging and inclusion
remained areas of strength, with AOers feeling
safe to speak-up. We progressed our equity,
diversity and inclusion approach through active
employee resource groups and improved data
quality, with diversity data now held for the
majority of our workforce. Addressing structural
challenges, including gender representation at
senior levels and in traditionally male-dominated
roles, remained a priority, informed by Gender Pay
Gap reporting and inclusive leadership practices.
Talent development
We continued to invest in building the skills and
capabilities needed for AO’s long term success.
Our focus remained on attracting high quality
hires, strengthening leadership capability and
supporting development at all career stages,
including through the rollout of Leading with
Impact and clearer frameworks for performance
and succession. We continued to support early
career pathways and professional development,
making eective use of apprenticeship levy
funding and expanding access to learning
through our digital platform, while equipping
AOers with future-ready skills and clearer
visibility of longer term opportunities.
Community and Charity
The AO Smile Foundation continued to support
the causes that matter most to AOers and
local communities. AOers raised just under
£26k for charities across the UK, which was
boosted by over £10k through Smile’s matched
funding programme, beneting organisations
including The Christie, Barnardo’s, Samaritans
and local hospices. We also continued to oer
two paid Make a Dierence (“MAD”) days to
every AOer, with 72 AOers donating 576 hours of
volunteering time to 12 good causes since April
2025. In addition, AO remained a Founder Patron
of The Dome (an OnSide Youth Zone in Crewe).
As part of a four year commitment we donated
various electrical products to community
organisations, generating positive local
engagement and strengthening our connection
to the communities we serve.
Additional statutory disclosures, including TCFD aligned
reporting, Board diversity, equal opportunities, disability
policy and other governance requirements, are included
in the Group’s compliance statements on page 32.
Sustainability
continued
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Our risks
Plc Board
• has overall responsibility for the eectiveness
of AO’s internal control and risk management
process; and
• approves risk appetite and capacity, and agrees
the principal risks and mitigation strategy.
Audit Committee
• reviews the Corporate Risk Register twice per
year and is notied of signicant changes
as appropriate;
• annually assesses the Group’s ERM and
internal control framework and recommends
to the Board on its eectiveness; and
• oversees implementation of the GRC tool to
support readiness for Code requirements.
Risk Management
Committee (“RMC”)
• meets twice per year to review Business Unit
risks, the status of the Corporate Risk Register
(“CRR”) and whether risks remain current; and
• assesses new risks for potential inclusion on
the CRR, including mitigation, inherent and
residual ratings, and movements.
Group Audit & Risk
• facilitates ERM reporting and maintains the
Corporate and Business Unit risk registers;
• shares risk information and best practice
across the Group;
• provides independent assurance over risk
management and controls;
• monitors compliance, identies gaps and
recommends corrective action;
• administers the Governance, Risk and
Compliance (“GRC”) system; and
• issues the annual risk survey and summarises
results in a thematic pack for the RMC.
Business Unit Risk Management
• business units meet at least twice per year
(and as needed) to assess emerging and existing
risks, mitigations and changes within the unit,
the wider Group or the macro environment; and
• each business unit maintains a risk register;
together these form the Corporate Risk Register.
Plc Board
Audit
Committee
Internal audit plan
Internal Audit and Business Unit
Risk Management Committees
Principal risks
Risk Management
Committee
Corporate risk register
Retail – Mobile – Logistics – Recycling – Financial Services
musicMagpie – Tech – People – Financial and Legal
Holistic approach covering strategic, operational,
nancial and compliance risks.
Consistent risk methodology – risk identication (Top Down
& Bottom Up e.g. survey), risk assessment and common risk
language. All well embedded.
Regular risk meeting cadence with Board, RMC and
Leadership/BUs for prompt identication of risk, horizon
scanning and mitigation strategies.
Clearly dened and measured approach to risk appetite
and risk tolerance.
Established Three Lines (3LoD) approach – see Audit & Risk
organisation design.
*NEW* Periodic control owner self-attestations and
Internal Audit validation through our Governance, Risk &
Compliance system, Audit Board.
Underpinned by governance committees with Audit & Risk
presence e.g. data protection, ESG Steering, Ethical Supply
Chain, and Financial Services.
Managing risk
in a changing
environment
We manage risk through our
Enterprise Risk Management
Framework (“ERM”), with policies and
processes to identify and address
risks and clear accountability and
delegated authority. This helps us
monitor and, where possible, mitigate
risks in line with our risk appetite,
deliver our strategic objectives
and protect stakeholder value.
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Our risks
continued
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 nancial 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;
• an Environmental, Social & Governance (“ESG”)
Steering Group, responsible for driving the
ESG strategy and coordinating reporting
compliance; and
• an Ethical Supply Chain Steering Group,
responsible for ensuring that policies and
practices reduce the risk of partnering with
unethical suppliers, particularly in relation
to modern slavery.
Risk Assessment
We assess likelihood and impact against the
Group’s Risk Assessment Matrix to determine
a risk factor and category (from minimal to
signicant/aggressive). This is complemented
by an overall reasonableness check to
ensure scores are consistent and complete.
The process helps us understand control
eectiveness and identify gaps.
Principal risks
These are the most signicant risks faced
by the business, based on a likelihood
and impact assessment. These are set
out overleaf. In addition, we carry some
signicant 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.
Principal risks reect current assessment and
judgement at the reporting date and remain
subject to change as external conditions,
regulation, technology and customer
behaviour continue to evolve.
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 signicant 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
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
The Group monitors a range of emerging risks
that may, over time, aect its business model,
operating footprint or risk prole across
e-commerce, recommerce, logistics and recycling.
We use a combined top down and bottom up
approach to risk identication. We monitor
market and macroeconomic developments and
discuss these at business unit risk meetings.
Introduced in FY22, our annual risk survey asks
senior leaders across the Group to identify key
threats over the short to medium term. Results
are reconciled to the Corporate Risk Register and
inform Risk Management Committee and Board
discussions. Business Units, steering groups and
our SMEs undertake horizon scanning for market,
technological, regulatory and legal developments,
and the ESG team monitors emerging ESG
(including climate) risks.
• Embedded enterprise risk management
AO’s ERM framework operated consistently
across the Group in FY26, with aligned
business unit registers, clear risk appetite
and eective oversight through the Risk
Management and Audit Committees.
• Progress towards UK controls requirements
We strengthened the internal control
framework in preparation for UK
Corporate Governance Code Provision 29
requirements applying from FY27.
• Aligned musicMagpie compliance with
Group standards
We strengthened regulatory governance
within musicMagpie Financial Services,
aligning compliance arrangements with
Group standards.
• Rened risk assessment methodology
We recalibrated the gross impact scale to
reect improved liquidity and headroom,
improving proportionality and clarity in
risk reporting.
• Deliver the UK controls declaration
Deliver Provision 29 compliance, evidence
Board oversight and formally declare on
the eectiveness of material controls.
• Embed enhanced control testing
and assurance
Embed half year and year end control
self attestation and Internal Audit
validation, with more consistent, higher
quality evidence.
• Maintain regulatory discipline as
activities expand
Continue monitoring regulatory
obligations as we operate in more
regulated areas, with clear ownership
and accountability.
• Strengthen resilience in core risk areas
Maintain focus on cybersecurity,
technology resilience and business
interruption risk, particularly during
automation and transformation.
• Continue proactive emerging
risk monitoring
Continue risk surveys, business unit
reviews and RMC oversight to support
early identication and management
of emerging risks.
Key Achievements in FY26 Key Actions for FY27
Emerging risks include changes in customer
behaviour and routes to market driven by AI;
greater automation and reliance on external
partners, and potential cost volatility or
regulatory developments that could inuence
future operating models. Where these risks
become more immediate or material, they are
assessed for inclusion on the Corporate Risk
Register and, where appropriate, reected
within the Group’s principal risks (for example,
IT Systems, Cyber Security and Agility).
As automation increases across logistics and
recycling, the Group also monitors emerging
risks relating to operational resilience, third
party dependency, governance and workforce
transition, recognising that these risks may
intensify as scale and reliance increase and as
technology, process and organisational change
occur concurrently.
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What are our principal risks?
UK Electricals Market Relevant strategic pillars – 1, 2 and 5
Nature of Risk Control and Mitigation Overall Change during year
UK (and global) economic uncertainty continues, driven by the
conict in Iran and continued unrest in the Middle East.
Ination continues to pressure consumers, potentially reducing
demand (and sales), changing protection plan take up/cancellations,
increasing mobile defaults/cancellations, and lowering out of
contract income or upgrade rates.
Suppliers may also be impacted by supply chain disruption and
higher operating/transport costs.
These factors can intensify competition and make forecasting
more dicult.
We maintain a strong proposition; in MDA, our infrastructure and
processes are hard to replicate.
Strong supplier relationships help secure our fair share of stock.
Our price match promise and technology support strong value;
digital acquisition and our trusted reputation drive website trac.
Beyond MDA, we have re engineered the model to serve SDA and
newer categories cost eectively.
Our nance proposition helps customers spread purchase costs.
Fuel and energy costs are hedged in the short term.
We monitor competitors closely and can respond quickly to stay
competitive, alongside continued customer retention initiatives.
INCREASE
Geopolitical tensions and the uncertain political environment in
the UK drive increased risk.
Demand remains soft and we have seen reduced average
selling prices.
Product protection plan take up was slightly down year on year,
with cancellation rates relatively stable.
Supply chains have not been materially impacted so far by
geopolitical conict, but disruption risk remains.
IT Systems, Cyber Security and Agility Relevant strategic pillars – 1, 3, 4 and 5
Nature of Risk Control and Mitigation Overall Change during year
AO’s IT systems are critical to ongoing operations.
Major website or key system downtime from breach or failure could
disrupt trading and damage our reputation.
Loss of sensitive information could expose our strategy; loss of personal
data could trigger complaints/investigations and negative publicity.
Under investment in technology could leave us reliant on inecient
systems and processes.
Rapid advances in articial intelligence present both strategic
and operational risk. Failure to keep pace with AI driven trends in
customer behaviour – including agentic shopping, AI led product
discovery and changing routes to market – could reduce customer
relevance, digital visibility and competitiveness.
At the same time, increased use of AI by threat actors is accelerating
the scale, complexity and frequency of cyber attacks, including
more targeted ransomware, social engineering and automated
attack techniques.
Self built applications have redundancy, monitoring/alerting,
security controls and fault tolerance, with 24/365 support.
Third party products follow procurement/review to understand
failure modes, availability SLAs and security.
InfoSec risk is managed via our SOC and dedicated InfoSec team.
We run regular training and simulations, external penetration testing,
and maintain clear policies and standards. This year we increased
training and simulated phishing, and ran cyber attack simulations
at functional, senior leadership and Plc Board level, supported by
external cyber and legal advisers, focusing on realistic ransomware
and data exltration scenarios.
Enhanced security has improved data management/backup and
reduced time to restore critical data.
We continue to monitor developments in AI driven customer behaviour
and technology risk, alongside enhancements to our cyber security
controls, threat detection and incident response capability, recognising
the increasing use of AI by both competitors and cyber criminals.
NO CHANGE
We continue to improve availability, performance, recovery and
security across our systems estate.
As cyber threats grow more complex, we have continued to
strengthen our security posture.
AI advances increase both competitive and cyber complexity.
These are oset by ongoing investment in resilience, security and
digital capability, and the opportunities AI presents to strengthen
customer proposition and operational eectiveness.
Our risks
continued
Read about our strategic pillars on page 07.
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Our risks
continued
Culture and people Relevant strategic pillars – 1, 3 and 4
Nature of Risk Control and Mitigation Overall Change during year
Our culture is critical to success and a key dierentiator.
Failure to sustain our culture could aect customer attraction/retention
and relationships with suppliers/partners. The risk may increase with
outsourcing, leadership churn, or insucient capability/capacity
across the Group.
There is also a risk of industrial action in operational areas, driven by
pay expectations.
Drivers include wage ination, working practices, skills shortages and
engagement levels.
Leaders are jointly responsible for embedding AO’s values. Engagement
is supported locally and Group wide, with surveys and engagement
groups used to identify issues and improvements.
Outsourcing will only be to partners we trust to reect AO’s culture,
ethos and values.
Competitive pay/benets (including senior incentives and the
Value Creation Plan) support attraction/retention.
Pay is benchmarked for fairness and we engage closely with unions.
Our Learning & Development hub, programmes and apprenticeships
develop our people.
NO CHANGE
Improved business stability has supported our culture and our ways
of working are embedded in the UK. We are mindful that we need to
actively manage culture as outsourcing overseas increases.
Our EIS score is broadly unchanged year on year.
Business Interruption Relevant strategic pillars – 3 and 4
Nature of Risk Control and Mitigation Overall Change during year
A major event at or near a Group site (including our main DCs)
could disrupt operations, harm nancial performance and
impact customers.
Our multi site Crewe network reduces single point of failure risk and
reliance on any one DC.
On site engineering teams run daily maintenance to support
Crewe operations and Head Oce.
Standalone controls also mitigate major site events.
Insurance cover further mitigates this risk.
NO CHANGE
We continue work to implement an enhanced Group wide
Crisis Management Plan.
What are our principal risks?
continued
Read about our strategic pillars on page 07.
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Key Commercial Partnership Relevant strategic pillars – 1, 2 and 3
Nature of Risk Control and Mitigation Overall Change during year
Delivery of our strategy depends in part on key suppliers and partners.
Supplier/partner failure, or a relationship breakdown, could weaken
our customer proposition and reduce sales and prot.
Key partners include:
• Manufacturers and distributors;
• Delivery partners;
• Mobile network operators and our mobile partner relationship;
• Finance and Insurance providers;
• B2B and Third-Party Logistics clients; and
• Plant and information technology systems suppliers.
This includes securing favourable terms and competitive rebates,
attracting premium brands, and ensuring fair stock allocation where
supply is constrained. Our mobile business is dependent on a number
of material contracts. Loss of, or deterioration of these relationships/
contracts could impact the viability of our mobile business.
We actively manage key supplier relationships to maintain
strong partnerships.
We listen to supplier/client concerns and respond accordingly, hold
regular operational and strategic meetings, and set clear SLAs so
expectations are understood and met.
Rebates are agreed through annual trading terms; stretch target
rebates are recognised only once targets are achieved.
We manage stock availability and procurement to minimise
disruption and customer dissatisfaction, balanced with active
working capital management to protect liquidity and headroom.
NO CHANGE
Supplier relationships remained stable, supported by improved
liquidity and a simplied strategy, helping secure good allocation
of available stock.
Our relationships with D&G and NewDay remain stable and contracts
have been renewed.
Our mobile-related relationships are stable, with a more balanced,
win-win approach established during the year.
Changes to and Compliance with
laws and regulations
Relevant strategic pillars – 2, 3 and 4
Nature of Risk Control and Mitigation Overall Change during year
Regulatory change or non-compliance could aect strategy or
operations, particularly in:
• Data protection and privacy;
• Product protection plan rules (including commission arrangements,
fair value requirements and revenue recognition);
• Financial Services regulation, Consumer Duty and commission rules;
• Driver employment status and wider employment rights;
• Health and safety;
• Mobile and Ofcom rules/guidance; and
• Environmental, Social & Governance (“ESG”).
The pace, complexity and cumulative cost of regulatory and
legal change also create ongoing operational and management
challenges, requiring sustained investment in compliance capability
and judgement, increasing the risk of inadvertent non compliance
as the Group continues to evolve its business model.
We routinely monitor regulatory developments to identify,
assess and respond to change.
AO is supported by a Legal team (awareness and best practice),
Internal Audit (compliance assurance), a Health & Safety function
and specialist compliance teams.
Steering committees provide oversight of key regulatory risks (including
data protection/security, health and safety and nancial services).
We obtain external legal advice where needed; recommendations
are implemented and monitored.
Training is delivered via the LMS and, for operational roles, face to
face H&S modules, as appropriate.
A Group wide H&S risk assessment programme is in place; policies
and standards are dened and communicated and we run scenario-
based H&S incident exercises (tabletop and live drills).
INCREASE
Regulatory change continues at pace. We must stay ahead of
employment law changes, FCA and Ofcom developments, increased
scrutiny of digital markets and expanded enforcement powers for
the CMA.
Launching AO Mobile exposes the Group to increased regulation.
Our risks
continued
What are our principal risks?
continued
Read about our strategic pillars on page 07.
32
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Our compliance statements
Our compliance statements
1. Purpose and scope of this section
These compliance statements summarise where AO’s mandatory non nancial, climate, energy
& carbon and other statutory disclosures are made, and provide the key disclosures required for
compliance. It is intended to sit alongside the Group’s sustainability strategy and performance
reporting and the Annual Report.
2. Non Financial and Sustainability Information Statement
(Companies Act 2006 – Sections 414CA and 414CB; and Non Financial Reporting Directive requirements)
2.1 Statement of compliance
The table below constitutes AO’s non nancial 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.
2.2 Non Financial and Sustainability Information Statement
Reporting
requirement
Policies/ standards that
govern our approach
Information necessary to understand our business
and its impact, policy due diligence and outcomes
Environmental Environmental policy These compliance statements; The “Reuse and
Reduce“ section of the Sustainability report
Employees Group employee handbook;
Whistleblowing policy;
Health & safety policy;
Equal opportunities policy
These compliance statements; The “Responsible
Retail” section of the Sustainability report
Social matters Modern slavery policy;
Data protection policy
These compliance statements; The “Responsible
Retail” section of the Sustainability report
Human rights Modern slavery policy;
Code of conduct
These compliance statements; The “People and
Places” section of the Sustainability report
Anti corruption
and bribery
Anti-bribery policy These compliance statements
Principal risks and
impact on the business
– Our risks on page 27
Description of
business model
– Our business model on page 06
Non nancial KPIs – Sustainability report on page 21
Climate related
nancial disclosures
– TCFD section on pages 33 to 35
3. SECR – Streamlined Energy and Carbon Reporting
(Companies (Directors’ Report) and LLPs (Energy and Carbon Report) Regulations 2018)
3.1 SECR statement and methodology
AO reports on greenhouse gas (“GHG”) emission sources as required under the SECR Regulations.
The methodology used to calculate GHG emissions and energy use is the GHG Protocol Corporate
Accounting and Reporting Standard (revised edition) and ISO 14064.
3.2 Organisational boundary/ baseline approach
FY23 is used as the baseline year for future targets for the UK-only Group, based on third party work
undertaken to calculate Scope 1, 2 and 3 emissions.
3.3 Required disclosures:
Greenhouse gas emissions
Scope 1, 2 & 3 Greenhouse Gas Emissions1 for AO Group for FY26 including musicMagpie
Year ending
31 March
%
change
FY26 v
FY25
2026
tCO
2
e
2025
tCO
2
e
5
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 4.39% 20,817 19,942 19,794 21,919 38,081 31,958 26,587
Scope 2 (indirect
emissions)
2
: Total
emissions from
energy purchased
Market-based 7.65% 6,267 5,822 284 304 2,992 1,284 1,697
Location-based -4.83% 2,481 2,607 2,350 2,350 3,396 3,411 3,679
Total gross Scope
1 and 2:
Market-based 5.12% 27,084 25,764 20,078 22,222 41,073 33,242 28,284
Location-based 3.33% 23,298 22,549 22,114 24,268 41,477 35,369 30,266
Carbon Intensity
ratio
3
:
Tonnes of CO
2
e per
£m of revenue -6.90% 18.45 19.81 21.31 21.31 30.32 21.29 28.55
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Annual Report and Accounts 2026
Year ending
31 March
%
change
FY26 v
FY25
2026
tCO
2
e
2025
tCO
2
e
5
2024
tCO
2
e
2023
tCO
2
e
2022
tCO
2
e
2021
tCO
2
e
2020
tCO
2
e
Scope 3
4
Cat 1: Purchased
goods & services 5.55% 708,332 671,078 479,733 445,349 – 260,044 –
Cat 3: Fuel
and energy 22.18% 6,529 5,344 5,258 5,344 – – –
Cat 4: Upstream
transportation &
distribution 593.20% 1,969 284 – – – – –
Cat 5: Waste
in operations 78.00% 32 18 4.5 4.54 – – –
Cat 6: Business
Travel 12,826% 129 1 – – – – –
Cat 7: Commuting 15.23% 2,689 2,334 2,356 3,021 – – –
Cat 9: Downstream
transport 36.11% 520 382 372 705 – – –
Cat 11: Use of
sold products 1.09% 993,092 982,339 903,129 1,036,426 – 928,296 –
Cat 12: End-of-
life treatment
of sold products 22.38% 959 783 546 621 – – –
Cat 13:
Downstream
Leased Assets 150.00% 25 10 – – – – –
Other Scope 3
emissions – – – – – – 14,564 –
Total gross Scope 3
emissions 3.11% 1,714,276 1,662,572 1,391,397 1,491,470 – 1,202,904 –
Total gross Scope 1,
2 (location-based)
and 3 emissions 3.08% 1,737,574 1,685,120 1,413,542 1,515,738 – 1,238,273 –
%
change
FY26 v
FY25 2026 2025 2024 2023 2022 2021 2020
Energy use kWh
(Scope 1 and 2) 11.08%
16,450,763 14,809,283 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 use UK emissions factors.
2 Emissions from electricity use, Scope 2, have been estimated using “location-based” and “market-based” approaches.
3 In order to express our annual emissions in relation to a quantiable 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
eciency) and secondary (product lifespan).
5 We have updated FY25 (but not prior years) to reect: updated emissions factors; our improved methodology for Scope
3 Category 1, where 99% of products now have emissions factors (up from 78% in the previous year); and to include
emissions and revenue from musicMagpie, since acquisition. These updates to FY25 allow readers to make a meaningful
comparison against FY26. musicMagpie’s total emissions for FY26 were 26,671 tCO
2
e, which we have concluded are not
signicant in the context of the AO Group FY23 emissions, meaning no change has been made to our baseline year.
4. TCFD – Climate-Related Financial Disclosures (“TCFD”)
The Board recognises the importance of understanding and managing the impact of potential climate-related
risks and opportunities on AO’s business and strategy. Our ESG steering group helps drive our strategy forward
and facilitate cross-group collaboration amongst local area owners.
We conrm that the following section of the Annual Report includes all climate-related nancial 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.
Our compliance statements
continued
Governance
Board’s oversight of climate-related risks and opportunities
The Board oversees material climate-related risks and opportunities, supported by the Audit Committee and Risk
Management Committee. It receives at least an annual written update on ESG (including climate), covering our
recommerce, recycling and carbon reduction strategies, and approves the sustainability section of the Annual
Report (including GHG disclosures and year-on-year progress). The Board also approves major capital investment
decisions (e.g. eet renewal and property energy strategy) and monitors the resulting emissions impact,
supported by management papers. The Audit Committee considers climate-related topics as part of its review
of the eectiveness of risk management and the associated system of internal control. Our Risk Management
Committee meets at least twice per year 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.
An annual ESG strategy and progress review is scheduled, and environmental impacts are considered within the
Board’s s.172 decision-making. During the year, the Board approved further CNG and LST investment and EV trials,
reviewed UK Group Scopes 1, 2 and 3 emissions and scenario planning, and reviewed ESG metrics and KPIs.
Management’s role in assessing and managing climate-related risks and opportunities
Management identies, assesses and manages climate-related risks and opportunities through our integrated
risk management process, supported by the Director of Group Audit and Risk and the ESG Steering Group.
Relevant risks are captured in business unit risk registers; these are reviewed twice yearly by the Risk Management
Committee, with critical risks escalated to the corporate risk register and monitored against risk appetite.
The ESG Steering Group drives delivery across three working groups: (a) Recommerce; (b) Recycling; and (c)
Carbon Reduction (Fleet, Estates and Products) and supports cross-group collaboration and local ownership.
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Climate-related risks and opportunities identied over the short, medium and long term
Climate-related risks and opportunities with potential to aect our strategy, operations and nances are set out
on page 35. We assess impacts over the short term (1–3 years), medium term (3–5 years) and long term (5+ years),
aligned to our wider risk management and nancial planning.
Overall risk and potential nancial impact increase over time: transitional risks are more relevant in the near term, with
physical risks becoming more signicant over the longer term. Based on our qualitative assessment, we do not consider
there to be an immediate material nancial threat to our business model. The areas of highest potential impact are
those already being addressed through our working groups.
Impact of climate-related risks and opportunities on our businesses, strategy and nancial planning
Our climate risk assessment and scenario analysis form the basis for evaluating how climate-related risks and
opportunities aect our strategy and nancial planning. We currently focus mainly on qualitative impacts, with
limited short- to medium-term quantication. We will rene this analysis over time and provide more detail in
future reports, including on risk interdependencies and long-term value creation.
Resilience of our strategy under dierent climate-related scenarios (including 2°C or lower)
In FY24 we carried out qualitative scenario analysis to 2050 at 1.5°C and 4°C, aligned to the UK net zero by 2050
ambition, using internal research and reference to the IPCC. During the reporting period we reassessed that
analysis and do not consider material updates are required at this stage.
The IPCC considers a range of possible futures with dierent levels of projected warming and society’s ability to adapt.
Our processes for identifying and assessing climate-related risks
Climate-related risks are identied and assessed by business units through our integrated risk management
process, supported by the Risk and Audit team. Business unit risk registers are reviewed twice per year; critical
risks are escalated to the corporate risk register and reviewed against risk appetite. Principal risks are approved
by the Board.
Our processes for managing climate-related risks
All risks are assigned an owner responsible for ensuring they are controlled and mitigated (or, where appropriate,
tolerated). Risks above appetite are scrutinised by the Risk Management Committee and, where necessary,
escalated to the Audit Committee and/or Board. The Risk and Audit team supports business units to strengthen
identication, assessment and management of environmental risks.
Integration into our overall risk management
Climate-related risks are included in business unit and corporate registers and are assessed using the same
likelihood and impact criteria as other risks. Risks are classied as short (1–3 years), medium (3–5 years) and long
term (5+ years), consistent with our wider approach described in the Our risks section (page 27).
Metrics used to assess climate-related risks and opportunities
We use Scope 1, 2 and 3 GHG emissions and a carbon intensity ratio as core metrics (reported on page 32). For
recommerce and recycling opportunities, we also track: appliances received for recycling/reuse; products reused;
packaging tonnage recycled; plastics tonnage recycled; and used consumer tech resold or rented.
Scope 1, 2 and 3 GHG emissions and related risks
We report GHG emissions under the SECR Regulations. Emissions are calculated using the GHG Protocol
Corporate Standard (revised) and ISO 14064, and expressed as tCO
2
e. FY23 (UK-only Group) is our baseline,
calculated with specialist third-party support (Green Jam). FY26 Scope 1, 2 and 3 results are set out on page 33;
related risks (including medium-term carbon pricing) are summarised on page 35.
Targets and performance against targets
We support the UK net zero by 2050 ambition and intend to set interim science-based targets for Scope 1 and 2
once we have greater certainty on eet decarbonisation technology/infrastructure and longer-term energy and
legislative requirements.
In the short term, we target Scope 1 reductions through logistics programmes (CNG trunking, LSTs, improved
capacity, delivery box design and telematics). We target HGV transition to CNG (or other lower-carbon
alternatives as technology develops) by 2035.
For Scope 2, we aim for 100% renewable electricity, but have temporarily reverted to non-renewable supply due
to cost; our focus is reducing absolute energy consumption per site through the initiatives on pages 22 to 23.
Progress is reected in the emissions metrics on page 32.
We also have qualitative targets to: (a) maximise e waste collected from customers; (b) optimise reuse; and (c)
maximise plastics recycled. Climate-related metrics are not currently included in executive incentives due to
uncertainty in UK policy, infrastructure and energy strategy.
Strategy
Orderly transition Hot house world
As shown in the table on page 35, risk and estimated potential nancial impact increase over time. We do not
consider there to be an immediate material nancial threat, but this assessment may change once quantitative
scenario analysis is completed. We expect our strategy to evolve over time; demand for electrical products and
physical delivery is expected to continue, although delivery methods and product characteristics may change as
technologies develop.
Consistent with keeping warming below 2°C (c.1.5°C).
• Physical risks increase (e.g. more frequent/severe
extreme weather) but the most severe impacts
are avoided.
• Stronger policy, innovation and investment increase
transition risks.
• Carbon pricing introduced in the 2020s, rising through
the 2030s.
Global warming exceeds 4°C (c.4.4°C), with continued
reliance on fossil fuels.
• Severe acute and chronic physical risks.
• Lower near-term transition risk due to limited
policy action.
Risk Management
Metrics and targets
Strategy
Our compliance statements
continued
35
Overview Strategic Report Our Governance Our Financials
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Annual Report and Accounts 2026
Our compliance statements
continued
Climate-related Risks and Opportunities
Transitional Risk
Extended Producer
Responsibility (“EPR”)
TCFD Category (Policy and Legal)
Impact: Stronger WEEE take-back and packaging
obligations could increase complexity and cost
(Retail, Logistics and Recycling).
£
Right to Repair
TCFD Category (Policy and Legal)
Impact: Regulation requiring repairable products could
reduce new product sales but lower compliance costs
(Retail, Logistics and Recycling).
£
Reputation and greenwashing
TCFD Category (Customer Reputation)
Impact: Failing to meet customer expectations
(or greenwashing risk) could damage trust,
sales and share (Retail).
£
Fleet transition
(cost/technology/infrastructure)
TCFD Category (Market)
Impact: Higher cost to shift away from fossil fuels; risk
of sub-optimal technology choices; site constraints/
infrastructure readiness (Logistics).
£
£
Carbon pricing and regulation
TCFD Category (Policy and Legal)
Impact: Potential carbon taxes, permits, osets,
sector-specic charges and expanded reporting/
disclosure requirements.
£
Physical Risk
Supply chain disruption
TCFD Category (Acute and Chronic)
Impact
1
– orderly transition: Supplier constraints (raw
materials), transport disruption, warehousing adaptation
and higher inventories; risk of supplier failure.
£
£
Impact
1
– hot house world: Greater raw material
scarcity, severe transport and storage constraints;
potential business disruption; water scarcity could
aect manufacturer production.
£
£
£
Mitigation strategy: Enhance supply chain planning,
contingency and risk modelling to minimise disruption
and maintain availability.
Site impacts (outages,
oods, heatwaves)
TCFD Category (Acute and Chronic)
Impact
1
– orderly transition: Building adaptation
costs and potential delivery restrictions (e.g. low-
emission zones). Extreme weather (oods/high winds)
and outages could damage assets, raise costs and
reduce service levels.
£
Impact
1
– hot house world: More pronounced sea level
rise and land scarcity; higher damage/maintenance
from extreme weather; potential water/drainage
constraints; heatwaves impact colleague wellbeing
and site cooling needs.
£
£
Mitigation strategy: Adapt/retrot buildings for
resilience and eciency; consider location and long-
term climate/energy access in site planning.
Delivery disruption
TCFD Category (Acute and Chronic)
Impact
1
– orderly transition: Weather events (oods,
heatwaves, severe cold) could disrupt roads and reduce
drops per route, lowering prot and capacity.
£
Impact
1
– hot house world: Greater infrastructure
disruption (roads/bridges) and increased delivery
constraints; heatwaves could require vehicle cooling
and reduced drops for health and safety.
£
£
£
Mitigation strategy: Review network resilience and,
where needed, consider relocation of sites to better
support delivery operations.
Opportunities
Circular economy: strengthen brand
and reputation
TCFD Category (Reputation)
Impact: Higher sales; lower customer acquisition costs.
Timeframe
2
:
2
Mitigation strategy: Increase customer/stakeholder
communications on recycling and circular economy
progress. Expand plastics facility to include in-house
extrusion, enabling easier use of recycled material
in new products. Grow reuse operations, including
consumer tech, supported by musicMagpie.
Extended Producer
Responsibility (“EPR”)
TCFD Category (Policy and Legal)
Impact: Higher sales/margins; lower compliance cost.
£
Timeframe
2
:
1
Mitigation strategy: Leverage in-house logistics and
recycling/reuse to deliver ecient free take-back for
AO and third parties. Continue evaluating additional
recycling capacity, including a new site.
Product mix shift (e.g. heatwaves
cooling demand)
TCFD Category (Market)
Impact: Expanded ranges and sales.
Timeframe
2
:
2
Mitigation strategy: Monitor market trends and
customer demand; build supplier relationships in
growing categories.
1 Estimated Financial Impact –
Without Detailed Quantitative Modelling
£ £ £
Signicant impact on group
£ £
Moderate impact on group
£
Limited impact on group
2 Timeframe
1
Short
2
Medium
3
Longer
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Overview Strategic Report Our Governance Our Financials
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Annual Report and Accounts 2026
5. FCA Listing Rules – Diversity Disclosure
In accordance with Listing Rule 9.8.6(R)10, annex 2, we set out our Board diversity data
1
as at
31 March 2026 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 75% 3 2 100%
Women 2 25% 0 0 0%
Other categories 0 0 0 0 0
Not specied/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) 8 100% 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 specied/ 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 was vacant as at 31 March 2026 but from 1 April 2026 Peter Pritchard has been appointed as SID.
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.
AO’s 2026 Gender Pay Gap Report highlighted that our overall gender pay gap (as at the snapshot
date of 5 April 2025) is 3% on a median basis and 6% on a mean basis (signicantly below the ONS
average). However, our gender pay gaps (on a median basis) and at individual entity level range from
-2% in Recycling to c.29% in AO World – the listed Company (with the gaps reducing year on year in
the main). At the AO World level, 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 21% and 15% female representation, respectively, as at the snapshot
date. Retail and enabling functions have c.49% and 40% female representation.
As at 31 March 2026, our Senior Leadership team (i.e. the direct reports to our two Executive
Directors) was 36% (FY25: 33% female). The number of female AOers across the whole business was
31% (FY25: 32%).
Our latest Gender Pay Gap Report, with a snapshot date of 5 April 2025 can be found at
https://www.ao-world.com/responsibility. 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.
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 benets 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.
6. Equal opportunities and disabled persons (Companies Act disclosures)
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.
Our compliance statements
continued
37
Overview Strategic Report Our Governance Our Financials
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Annual Report and Accounts 2026
6. Equal opportunities and disabled persons (Companies Act disclosures)
continued
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 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 eective 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.
7. Modern Slavery/ ethical supply chain disclosures
Our Modern Slavery statement for the year ended 31 March 2025 was published during the year and
can be found at https://www.ao-world.com/responsibility.
During the year, AO published its tenth Modern Slavery Statement, applying a risk based approach
across all UK subsidiaries. Governance, supplier due diligence and awareness activity remained
embedded, with a focus on higher risk areas such as logistics and recycling. No conrmed instances
of modern slavery were identied, with continued emphasis on prevention and vigilance.
8. Anti-bribery and whistleblowing
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 condence. As noted in the
governance section, we have undertaken an assessment of these procedures during the year
and are condent these continue to work eectively.
9. Consumer Duty
During the year, the Board reviewed and approved AO’s annual Consumer Duty assessment,
conrming that the business is delivering good outcomes for retail customers. Consumer
Duty considerations are embedded through governance, training, monitoring and partner
oversight, with regular review of customer outcomes, complaints and vulnerability. The Board
was satised that AO complied with Principle 12 and PRIN 2A, with controls in place to support
continuous improvement.
10. Data protection and cyber security
Protecting customer data and safe online shopping remain critical. Dedicated data protection,
information security and cyber teams oversee policies, supported by mandatory employee
training via the learning hub. The Data Protection and Security Committee meets quarterly
to oversee strategy and risk. Continued investment has progressed initiatives to reduce risk,
alongside training on cybersecurity, GDPR and related compliance policies.
11. Health and safety
AO is committed to maintaining a safe working environment for employees and customers. Health
and safety is overseen at Group level through a clear governance framework, with regular Board
reporting on performance, risks and incidents. A Group H&S strategy with dened KPIs is in place,
supported by consistent systems, audits and training. Management monitors performance
across all business units, contractor controls and high risk activities, and reviews serious incidents,
assurance ndings and crisis management readiness.
Further information is included in our sustainability report.
12. Tax strategy disclosure
AO’s tax strategy supports the wider Group strategy by minimising risk and uncertainty and
providing a stable tax environment. The Group is committed to responsible tax management,
acting with integrity and transparency, paying the right amount of tax at the right time and
complying with all ling obligations. The tax strategy is reviewed regularly to ensure ongoing
alignment with business strategy and priorities.
A copy of our current tax strategy can be found on our corporate website at
ao-world.com/responsibility.
13. 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.
14. Section 172 Statement and Engagement with Our Stakeholders
Our section 172 duty
The Board is required under section 172 of the Companies Act 2006 (“s172”) to act in the way it
considers, in good faith, would be most likely to promote the success of the Group for the benet of
its members as a whole. In doing so, Directors must have regard (amongst other matters) to:
• the likely consequences of any decision in the long term;
• the interests of the Company’s employees;
• the need to foster the Company’s business relationships with suppliers, customers and others;
• the impact of the Company’s operations on the community and the environment;
• the desirability of the Company maintaining a reputation for high standards of business conduct; and
• the need to act fairly as between members of the Company.
Section 414CZA of the Companies Act 2006 requires the Board to describe in this Annual Report
how, during the nancial year, it has had regard to the matters set out in section 172 when
performing its duty (the “section 172 statement”). This section 14 constitutes the Company’s section
172 statement for the year ended 31 March 2026. This section 14 also provides information relevant
to the requirements on employee engagement and fostering business relationships set out in
the Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008 (SI
2008/410) as amended by the Companies (Miscellaneous Reporting) Regulations 2018.
This statement should be read in conjunction with other sections of this Annual Report, including
the Strategic Report, Sustainability Report, Corporate Governance Report and Directors’ Report.
Our compliance statements
continued
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Annual Report and Accounts 2026
Customers
People
Suppliers and
Partners
Communities and
the Environment
Shareholders
Our compliance statements
continued
How we engage
• Customer service centres
supported by digital
channels, including chat
and social media
• Extensive use of customer
satisfaction metrics and
review platforms
• Product, proposition and user
journey testing, including
trials linked to new initiatives
How we engage
• CEO led business updates,
listening groups and
engagement surveys
• Designated NED for
workforce engagement
• Formal engagement
arrangements with recognised
trade unions in relevant areas
How we engage
• Regular senior level and
operational engagement
• Structured governance
with key commercial and
strategic partners
• Ongoing dialogue on
performance, resilience and
compliance standards
How we engage
• Engagement with local
communities where the
Group operates
• Participation in recycling,
sustainability and
industry forums
• Environmental and health
and safety reporting
How we engage
• Regular results
announcements
and investor presentations
• Meetings with shareholders
and analysts
• Transparent disclosure
through regulatory
announcements
and reports
What matters to them
• Reliable service and
delivery. Clear, fair pricing
and transparency
• Trust, data protection
and product quality
What matters to them
• Job security, wellbeing and
health and safety
• Fair reward and
pay transparency
• Career development and
eective communication
during change
What matters to them
• Long term,
collaborative relationships
• Fair payment practices
• Clear standards of conduct
and mutual accountability
What matters to them
• Environmental performance
and responsible retailing
• Safe operations
• Local employment and
community investment
What matters to them
• Sustainable value creation
and capital discipline
• Financial resilience and
risk management
• Clear strategy
and governance
How we have responded
• Continued focus on Trustpilot
performance and operational
service metrics
• Careful testing and phased
launch of new propositions,
including mobile and
membership enhancements
• Ongoing investment in cyber
security, data protection and
customer communications
How we have responded
• Board oversight of workforce
engagement outcomes and
labour stability metrics
• Continued investment in
leadership capability, training
and mandatory learning
• Careful consideration of
people impacts associated
with oshoring, technology
change and restructuring
How we have responded
• Active management of
supplier relationships during
periods of operational and
strategic change
• Focus on resilience, continuity
and quality, particularly in
logistics, technology and
mobile partnerships
How we have responded
• Continued progress
on recycling and reverse
supply chain capabilities
• Consideration of
environmental impacts
in eet, property and
logistics decisions
• Ongoing investment in
health and safety systems
and practices
How we have responded
• Continued focus on
protability, cash generation
and disciplined investment
• Enhanced transparency
around capital allocation
and returns
• Regular engagement with the
investment community
Stakeholder engagement
To enable eective decision making, the Board seeks to understand the perspectives and priorities
of the Group’s stakeholders and receives regular updates on stakeholder engagement across
the business. The Board considers engagement outcomes alongside nancial, strategic and risk
information when making decisions.
The Group’s key stakeholder groups are Customers, People, Suppliers and Partners, Communities,
Shareholders and Regulators. Engagement with each stakeholder group during the year is
summarised below:
Regulators
How we engage
• Ongoing horizon scanning
and regulatory updates
• Formal compliance
reporting and internal
control frameworks
• Participation in
industry consultations
What matters to them
• Compliance and cooperation
• Consumer protection and
data security
• Environmental and
social responsibility
How we have responded
• Board level oversight of
regulatory compliance,
including consumer duty,
SM&CR and data protection
• Continued enhancement
of internal controls and
governance processes
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15. Viability assessment
In accordance with Provision 31 of the 2024 UK Corporate Governance Code, the Directors have
assessed the viability of the Company and the Group over a three-year period to 31 March 2029.
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 specically 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 29 to 31; and
• nancial analysis and forecasts showing current nancial position and performance, cash ow
and covenant requirements.
The Directors have reviewed the Group’s annual and longer-term nancial 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 ination, 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
sucient 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.
Our compliance statements
continued
During the year, the Board considered and
approved a programme of investment to
strengthen the Group’s cyber resilience and
to modernise critical legacy systems that
support core operations, including logistics
and customer fullment.
In reaching its decision, the Board had regard
to the following section 172 matters:
The likely long-term consequences
of the decision
The Board recognised that the reliability
and resilience of critical systems are
fundamental to the long-term success of
the Group. Investment in modern platforms
and enhanced cyber controls was intended
to reduce operational risk, mitigate the
increasing threat of cyber incidents, and
ensure continuity of service as the business
scales and evolves.
The interests of employees
The Board considered that reliable, well
supported systems enable employees to
perform their roles safely and eectively,
reduce operational disruption and create
a more stable working environment,
particularly in customer facing and
logistics operations.
The need to foster relationships
with customers, suppliers and
other stakeholders
The Board noted that customers and
partners expect secure handling of
data, consistent service delivery
and operational resilience.
An example of how the Board has had regard to section
172 when making decisions
Strengthening cyber security and system
continuity was therefore seen as critical to
maintaining trust and supporting long term
relationships with customers, suppliers and
key technology partners.
The desirability of maintaining high
standards of business conduct
and reputation
The Board considered its responsibilities
in relation to data protection, regulatory
compliance and responsible business
practices. Continued investment in cyber
resilience and system controls was viewed
as essential to maintaining the Group’s
reputation for high standards of conduct.
Acting fairly between members
of the Company
The Board balanced the cost of investment
against the potential nancial and reputational
impact of system failure or cyber incidents,
concluding that a disciplined, phased approach
represented a responsible use of capital in the
interests of shareholders as a whole.
Having taken these matters into account,
the Board concluded that strengthening
cyber resilience and ensuring continuity of
critical systems would promote the long-term
success of the Company for the benet of its
members as a whole.
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Annual Report and Accounts 2026
16. Going concern statement
The Group’s business activities, together with the factors likely to aect its future development,
performance and position, are set out in the Strategic Report on pages 03 to 40. The nancial
position of the Group and its cash ows are described in the Financial and Operational review
on page 12. In addition, the Notes to the Financial Statements include the Group’s policies and
processes for managing its capital, its nancial risk management objectives, details of its
nancial instruments and hedging activities, and its exposures to credit risk and liquidity risk.
Further information on our risks is on page 27.
The nancial statements have been prepared on a going concern basis which the Directors
consider to be appropriate.
The Group meets its day-to-day working capital requirements from its cash balances and the
availability of its £120m revolving credit facility which expires in October 2028.
The Directors have prepared base and sensitised cash ow forecasts for the Group for a period of at
least 12 months from the expected approval of the nancial statements ( the “going concern period”)
which indicate that the Group will remain compliant with its covenants and will have sucient 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 2026. Further sensitivities have been
modelled to reduce gross margin by 1% and to assume greater than ination sta costs for non
head oce sta. These sensitivities capture a severe cash ow impact from a combination of
potential downsides including a weaker UK electricals market, a business interruption or a cyber
security incident.
Although not modelled in these severe but plausible downside scenarios, the risks above could be
oset 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 nance 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 condent that the Group and Company will have sucient funds to
continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the
nancial statements and therefore have prepared the nancial statements on a going concern basis.
17. Approval and sign o
The Company’s Strategic Report was approved by the Board on 16 June 2026 and signed on its
behalf by:
Julie Finnemore
Legal Director and Company Secretary
16 June 2026
Our compliance statements
continued
41
Overview
Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Our Governance
Governance at a glance 42
2024 Code compliance 43
Board of Directors 44
Corporate Governance report 46
Nomination committee report 49
Audit committee report 52
Directors’ Remuneration report 56
Directors’ report 68
Statement of
Directors’ responsibilities 71
AO has a balanced
Board with diversity
of skills and thought.”
Geo Cooper
Chair
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Annual Report and Accounts 2026
Board Gender
Female 25%
Male 75%
Board Role and Independence
1 Chair (Independent
on appointment)
2 Executive Directors
4 Independent NEDs
1 Non-independent
NED (Chris Hopkinson
is considered non-
independent in respect
of his Board tenure only)
Board Tenure (In years)
JR, CH, MH and GC
= 9+ years
SM
= 6-9 years
SV, PP and ST
= 1-3 years
Governance at a glance
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.
The
strength in
our people
Board meeting attendance
The table below summarises the attendance of the Directors during the
year ended 31 March 2026.
Director
Meetings
eligible to
attend
Geo Cooper 6/6
John Roberts 6/6
Mark Higgins 6/6
Chris Hopkinson 6/6
Shaun McCabe 6/6
Peter Pritchard 6/6
Sarah Venning 6/6
Sophie Tomkins* 4/4
* Sophie was appointed on 1 September 2025.
Skills Matrix
Retail/customer-focused
business experience
Digital experience
Finance and accounting
International experience
Functional experience in
management and operations
Marketing
Strategy
Public company governance
Geo
Cooper
John
Roberts
Mark
Higgins
Chris
Hopkinson
Shaun
McCabe
Sarah
Venning
Sophie
Tomkins
Peter
Pritchard
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AO’s compliance with the 2024 Corporate Governance Code (the “Code”)
This Corporate Governance Statement (“Statement”), together with the Corporate Governance Report and Committee Reports, explains
the key features of the Company’s governance structure and how it has applied the principles set out in the Code during the reporting period.
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.
The Directors consider that the Company has, throughout the period under review, complied with the provisions of the Code, save that:
• the Chair’s tenure has been extended beyond 9 years by agreement of the full Board (Provision 19) – see page 50 for further explanation;
• no externally facilitated board performance review has been conducted (Provision 21) – see page 51 for further explanation;
• the share awards granted to the Executive Directors are subject to a total vesting and holding period of 4 years by agreement of the shareholders at the 2025 AGM (Provision 36) – see last year’s
Remuneration Committee Report for further explanation; and
• during the year under review, the Company had not appointed a Senior Independent Director (Provision 12) – Peter Pritchard has now been appointed as Senior Independent Director.
The Directors conrm that, through the activities of the Audit Committee described on pages 52 to 55, it has reviewed the eectiveness of the Company’s risk management and internal controls.
The table below summarises how the Directors have applied the principles of the Code during the year and where relevant content can be found in other parts of this report.
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 – page 06
Risk management – page 27
Board leadership and purpose – page 46
Shareholder engagement – page 48
People, culture and workforce engagement – page 25
Division of responsibilities
(Principles F to I)
There exists a clear division of responsibilities between the Chair and the CEO. 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 eectively.
Governance framework – page 44
Division of responsibilities – page 46
Independence and time commitments – page 47
Nomination Committee Report – page 49
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 eectiveness review – page 50
Nomination Committee Report – page 49
Board skills and experience – page 42 and pages 44 to 45
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 – page 27
Audit Committee report – page 52
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 – page 56
44
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Peter Pritchard
Senior Independent Non-Executive
Director
Committee membership
Audit, Remuneration and
Nomination Committees
Appointment to the Board
1 October 2022
Relevant skills and experience
• Signicant consumer and broad
operational experience.
• Previously CEO 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.
Signicant current external appointments
NED and Remuneration Committee Chair
at Motability Operations Group PLC, NED
at Nutriment and NED at B&M European
Value Retail plc.
Independent
Yes
Board of Directors
Geo Cooper
Non-Executive
Chair
Committee membership
Nomination and Remuneration Committees
Appointment to the Board
1 July 2016
Relevant skills and experience
• Over 25 years’ UK public company board
experience, including chair and chief
executive ocer roles.
• Signicant 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 ocer of Travis Perkins PLC.
Signicant current external appointments
Chair at Channel 4 Corporation.
John Roberts
Founder and CEO
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.
• Signicant market knowledge
and understanding.
Signicant current external appointments
None.
Mark Higgins
Group Chief Financial Ocer and
Chief Operating Ocer
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 Ocer
in 2015.
• Appointed as Chief Operating Ocer in 2025,
a role he performs in conjunction with his role
as Group Chief Financial Ocer.
• Previous senior nance roles held at
Enterprise Managed Services Limited
and the Caudwell Group.
• Member of the Chartered Institute of
Management Accountants.
Signicant current external appointments
None.
Key
Audit Committee Nomination Committee Remuneration Committee People Champion Chair of Committee
P
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Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Board of Directors
continued
Shaun McCabe
Non-Executive
Director
Committee membership
Remuneration and Audit Committees
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.
• Signicant international, nance and general
management experience.
• Previous senior positions held at several online
market leaders, including Trainline PLC, ASOS
PLC, Amazon Europe and boohoo Group PLC.
Signicant current external appointments
Chief Financial Ocer at Tide.
Independent
Yes
Sarah Venning
Non-Executive
Director
Committee membership
Audit, Remuneration and
Nomination Committees
Appointment to the Board
1 November 2022
Relevant skills and experience
• Signicant experience in digital and IT elds
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.
Signicant current external appointments
Chief Strategy and Transformation Ocer
at Allwyn UK.
Independent
Yes
Sophie Tomkins
Non-Executive
Director
Committee membership
Audit and Nomination Committees
Appointment to the Board
1 September 2025
Relevant skills and experience
• Chartered Accountant with substantial Board
and Audit Committee Chair experience. Sophie’s
executive stockbroking career included senior
managerial roles, and she has advised numerous
companies on a huge range of transactions.
• Previous Board roles have included Hotel
Chocolat Group PLC, The Snowfox Group, and
CloudCall Group PLC, all of which have seen
highly successful capital events.
Signicant current external appointments
NED and Audit Committee Chair of Wilmington
PLC, Virgin Wines UK PLC, and System1 Group
PLC. She is also Senior Independent Director of
System1 Group PLC which won the AIM Corporate
Governance Award in 2024.
Independent
Yes
Key
Audit Committee Nomination Committee Remuneration Committee People Champion Chair of Committee
P
Chris Hopkinson
Non-Executive Director
and People Champion
P
Committee membership
Nomination Committee and People Champion
Appointment to the Board
12 December 2005
Relevant skills and experience
• Former City nancial analyst.
• Signicant industry experience.
• Holds a master’s degree in Logistics.
Signicant current external appointments
Executive Director of Clifton Trade
Bathrooms Limited.
Independent
No, due to length of tenure only.
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Annual Report and Accounts 2026
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 eective 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/
COO. The Executive Committee is supported
by the Senior 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 Tech, Finance, HR and Legal.
The Senior 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 Senior 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/COO and comprises our work
level three and above AOers (dened 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 nancial 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 Certication Regime (“SM&CR”),
Health and Safety and ESG.
Formal Board meetings of our operating
subsidiary companies are also held on a regular
basis. Our Risk Management Committee, 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.
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 dened
and well-established strategy and purpose,
combined with the Group’s culture and values,
are critical to achieving this.
The positions of our Chair and CEO are not
exercised by the same person, ensuring a
clear division of responsibility at the top of
the Company. The roles and responsibilities of
our Board members are clearly dened and
are summarised below. For a more detailed
description of the roles of the Chair and CEO,
please review the Terms of Reference on our
website at ao-world.com.
Board roles and key responsibilities
As at the date of this Annual Report, the Board
comprises eight members: the Chair, two
Executive Directors and ve Non-Executive
Directors. Excluding the Chair, four Board
members (i.e. at least half) are considered
independent in line with the Code.
All current Directors served throughout the year,
save for Sophie Tomkins, who was appointed on
1 September 2025. 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.
Chair (Geo Cooper)
• Providing leadership of the Board.
• Setting the Board’s agenda to emphasise
strategy, performance and value creation.
• Monitoring the eectiveness 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 CEO (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 Ocer and Chief
Operating Ocer (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.
Senior Independent Director (Peter Pritchard)
• Acting as an internal sounding board for the
Chair and serving as an intermediary for the
other Directors, with the Chair, when necessary.
• Being available to shareholders if they
require contact both generally and when
communication with the Chair or Executive
Directors would be inappropriate.
Non-Executive Directors (Chris Hopkinson,
Shaun McCabe, Peter Pritchard,
Sarah Venning and Sophie Tomkins)
• 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
ow 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.
Committees of the Board
The Board has delegated authority to
three Committees: Nomination, Audit and
Remuneration. These Committees carry out
certain tasks on the Board’s behalf. This allows
the Board to operate eciently and to give the
right level of attention and consideration to
relevant matters. The reports of the Committee
Chairs are set out on pages 49 to 67.
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.
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Annual Report and Accounts 2026
Board meetings
The Board meets as often as necessary to
eectively 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 eectively. To ensure the Board’s
time is used eectively in meetings, papers are
circulated several days in advance to provide
adequate time for reading and to raise any
specic queries or questions.
At each meeting, the CEO and Group
Chief Financial Ocer and Chief Operating
Ocer 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 nancial
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. The Head of Group Health
and Safety reports quarterly to the Board and
provides an in-person, annual update.
All members of the leadership team and
selected members of the management team
are invited to attend Board or Committee
meetings to present on specic 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.
Key Board activities during the year
to 31 March 2026
Some of the key Board activities during the
year include:
• Continually reviewing and challenging the
Group’s strategy, including monitoring the
alignment between strategy and culture.
• Reviewing regular reports from senior
management on trading, business
performance and health and safety.
• Supporting management in the continual
review of current trading, reforecasting and
actions proposed to drive eciencies.
• Hearing from expert speakers on the
Employment Rights Act, Cyber risk and
the Mobile industry.
• Approving the annual budget, the business
plan for the Group and individual capital
expenditure projects.
• Reviewing and approving the Group’s
full-year and half-year results, together with
trading statements and the Group’s viability
statement and going concern status.
• Reviewing the principal and emerging risks of
the Group and consideration of risk appetite.
Board meeting attendance
The table on page 42 summarises the
attendance of the Directors during the
year ended 31 March 2026.
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 2026
Sophie Tomkins appointed 1 September 2025
Sarah Venning appointed 1 November 2022
Peter Pritchard appointed 1 October 2022
Shaun McCabe appointed 24 July 2018
Geo Cooper appointed 1 July 2016
Mark Higgins appointed 1 August 2015
Chris Hopkinson appointed 12 December 2005
John Roberts appointed 2 August 2005
Independence
For the purposes of assessing compliance with the
Code, the Board considers that Shaun McCabe,
Peter Pritchard, Sarah Venning and Sophie
Tomkins 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 Geo
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.
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 sucient quality to enable
the Board to discharge its duties. Specic
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 conrms that all Directors have the
requisite knowledge, ability and experience to
perform the functions required of a Director of
a UK premium-listed company.
Directors’ conicts of interest
Directors have a statutory duty to avoid
situations in which they have, or may have,
interests that conict with those of the Company,
unless that conict is rst authorised by the
Board. This includes potential conicts that
may arise when a Director takes up a position
with another company.
Corporate Governance report
continued
48
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Annual Report and Accounts 2026
The Company’s Articles of Association, which
are in line with the Companies Act 2006, allow the
Board to authorise potential conicts 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 conict
of interest is only eective if it is agreed without
the conicted 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 conict arising and for the regular
review of actual or potential conicts of interest.
An Interests Register records any authorised
potential conicts and will be reviewed by the
Board on a regular basis to ensure that the
procedure is working eectively.
Whistleblowing and anti-bribery
and corruption procedures
AO is committed to the highest standards of
ethical conduct, honesty and integrity. The Board
recognises that transparent communication is key
to upholding these values and supports a culture
in which colleagues can raise concerns. During
the year, the Board, through the Audit Committee,
reviewed the Group’s whistleblowing policies and
received regular updates on reports. The review
conrmed that the policies are appropriate,
accessible and comprehensive, and enable
colleagues to raise concerns anonymously.
The Group has zero-tolerance for corruption,
fraud, criminal activity (including nancial crime),
and bribery. Colleagues are required to complete
annual anti-bribery and corruption training via
the Group’s learning platform. Any breach of
procedures is treated as serious misconduct
and may result in immediate dismissal.
Shareholder engagement
The Board recognises the importance of
communicating with shareholders to ensure its
strategy and performance are understood and
that it remains accountable. The Company has
an Investor Relations function, led by the Group
Chief Financial Ocer and Chief Operating
Ocer, which manages communication on
strategy and ensures the Board understands
the views of major shareholders. This function
is supported by corporate brokers Jeeries
and Peel Hunt. Executive Directors maintain
an ongoing programme of engagement with
institutional investors, fund managers and
analysts through results presentations, regular
dialogue, conferences and roadshows. These
discussions cover strategy, performance,
management and governance within the
bounds of publicly available information. The
Investor Relations function also handles ad
hoc shareholder queries. The Remuneration
Committee Chair engages with shareholders
on executive pay matters, while the Board Chair
engages with shareholders as needed and has
held discussions during the year on investor
sentiment regarding Board composition,
governance and strategy.
The Board recognises that institutional
shareholders may have more frequent contact
but ensures all price-sensitive information is
disclosed to all shareholders simultaneously
in line with legal requirements. The Company
Secretary is available to address unresolved
shareholder concerns. The Board receives
feedback from Jeeries and Peel Hunt on
investor views, and any major shareholder
concerns are communicated by Executive
Directors. It also regularly reviews share price
performance, trading activity, changes in
shareholdings, and analyst opinions and
forecasts. Shareholders can access all key
information, including announcements,
presentations and the Annual Report, via
the Company’s website at ao-world.com.
Annual General Meeting
The AGM of the Company will take place at
4pm on 24 September 2026 at Telephone
House, 2-4 Temple Avenue, London, EC4Y
0HB. All shareholders can 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 4pm on 22 September 2026
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 can 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 93% or more.
Stakeholder voice into
the Boardroom
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 37 to 39.
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 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 conict 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.
• 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 with colleagues, which complement
the monthly “State of the Nation”.
• 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.
Corporate Governance report
continued
49
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Nomination committee report
Ensuring an eective Board
for the leadership and
direction of the Company.”
Geo Cooper
Chair, Nomination Committee
Membership and meetings
• During the period under review, the Committee
comprised ve 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 signicant contribution
to the work of the Committee, ensuring it was
run eectively. 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 qualications
of all Committee members can be found on
pages 44 to 45.
• 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 CEO, Group Chief Financial Ocer and
Chief Operating Ocer, 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 three times 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 nancial
cycle and in advance of a Company Board
meeting to maximise eectiveness.
There are no unresolved disagreements between
the Committee and the Board.
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 reects 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 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
eectiveness. 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 the
Senior Independent Director or 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.
Overview
Committee member
Meetings attended/
Meetings eligible
to attend
Geo Cooper 3/3
Chris Hopkinson 3/3
Peter Pritchard 3/3
Sarah Venning 3/3
Sophie Tomkins
(appointed
September 2025) 3/3
I am pleased to introduce the report
of the Nomination Committee for
the year ended 31 March 2026,
which details the Committee’s
activities during the year.
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Annual Report and Accounts 2026
Nomination committee report
continued
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 identied, the Committee determines the
role prole, 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
identied a suitable candidate, we then make
a recommendation to the Board, which has
responsibility for making the nal decision.
All appointments are made on merit, against
objective criteria and with due regard to the
benets of diversity on the Board.
During the year and following the process
described above, we were delighted to welcome
Sophie Tomkins to the Board as an additional
Non-Executive Director. Sophie brings extensive
board-level experience and her background in
nance, combined with a strong commitment to
customer service excellence, will be a valuable
asset to the Board. It is expected that Sophie
will succeed Shaun McCabe as AO’s Audit
Committee Chair over time.
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 briengs 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.
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.
Having regard to the character, judgement,
commitment and performance of the Board
and Committees to date, and following the
internal Board Eectiveness review conducted
during the year, the Board is satised that
no one individual will dominate the Board’s
decision making and considers that all of the
Non-Executive Directors are able to provide
eective challenge to management.
As I have now served on the Board for over
9 years the Committee regularly reviews,
without me present, whether I continue to
hold management to account, exercise
objective judgement and promote constructive
challenge amongst other Board members.
The Committee is satised that I do and, in
reaching this conclusion, has taken into account
that 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
signicant shareholders.
Last year, we commenced the recruitment of
two new Non-Executive Directors to join the
Board and, as detailed above, are delighted to
have appointed Sophie Tomkins. The Committee
has decided to pause the recruitment of a
second new Non-Executive Director with a
marketing and brand background as extensive
searches failed to identify a suitable candidate.
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
eectiveness and that a diverse Board with
dierent perspectives, and those that reect
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 reect 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 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 has increased
this year to 25% (2025: 14%), and 36% at senior
management level (which comprises the Executive
Committee’s direct reports) (2025: 33%). 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 report on page 21.
Board eectiveness
The eectiveness 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.
51
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Annual Report and Accounts 2026
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 benets of
an external evaluation, over and above those
provided by the internal evaluation, are
sucient to justify the cost.
The internal review during the 2026 nancial
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
eective 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 signicant
concerns amongst the Directors about its
eectiveness. Some actions were agreed and
will be progressed over the coming year.
Following the review, it was agreed that all
Directors contribute eectively, 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.
Assessment of independence
and time commitments of the
Non-Executive Directors
Following our assessment this year, the
Nomination Committee is satised 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 condent that Chris’s experience and
knowledge continue to make a signicant
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 signicant
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 eectiveness 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 identied and the Nomination
Committee conrms that all individual Directors
have sucient time to full 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 2026 AGM and oer themselves for
reappointment, with the exception of Chris
Hopkinson, who is minded to step down at the
AGM having served on our Board for over 20
years. We are sincerely grateful for his long
serving support, guidance and stewardship.
The biographical details of the current
Directors can be found on pages 44 to 45. The
Committee considers that the performance
of the Directors standing for re-election
continues to be eective and that they each
demonstrate commitment to their role and
devote sucient 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 oce.
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.
The Committee will also continue to ensure
the Board operates eectively as a decision
making and oversight body. The Board will input
to senior management succession planning
and strengthening our senior talent pipeline,
elevating this activity due to it’s importance to
AO’s strategic progress.
Geo Cooper
Chair, Nomination Committee
16 June 2026
Nomination committee report
continued
52
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AO World Plc
Annual Report and Accounts 2026
52
Audit committee report
Ensuring eective 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 2024 Code, I have recent and
relevant nancial experience and am a Member
of the Institute of Chartered Accountants
in England and Wales, and so can provide
appropriate challenge to management.
• Detailed experience, skills and qualications
of all Committee members can be found on
pages 44 to 45, and the Board has conrmed
that it is satised that the Committee has the
appropriate range of nancial, commercial
and sectoral expertise and satises the
2024 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, or upon
request from the Company Secretary.
Eectiveness of the
Audit Committee
The eectiveness of the Committee is assessed
annually and as part of the annual Board
and Committee eectiveness review, further
details of which are set out on pages 50 and
51. The review for the year to 31 March 2026
concluded that the Committee continued to
operate eectively during the year. There are
no unresolved disagreements between the
Committee and the Board.
Key work during the year
• Focused on nancial 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
valuation of contract assets.
• Reviewed interim results statements and
nancial results presentations, including
going concern statements.
• Reviewed the eectiveness of external
and internal audit processes and the
eectiveness and appropriateness of
our system of internal controls, including
preparing for Provision 29 reporting.
• Reviewed the quarterly internal audit reports
together with management responses and
reviewed the progress on required actions
to improve the controls environment.
• Reviewed updates on the changing
regulatory environment.
• Reviewed Internal Audit practices against IIA
International Professional Practices standards.
• Conducted an External Auditor tender and
reviewed audit and non-audit fees.
• Reviewed the Group’s risk
management procedures.
• Reviewed the Group’s whistleblowing, anti-
bribery and fraud prevention procedures.
• 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 eectiveness and eciency of operations,
help to ensure the reliability of internal and
external reporting and assist in compliance
with applicable laws and regulations.
Overview
Committee member
Meetings attended/
Meetings eligible
to attend
Shaun McCabe 6/6
Peter Pritchard 6/6
Sarah Venning 6/6
Sophie Tomkins
(appointed
September 2025) 4/4
On behalf of the Committee, I am
pleased to present this year’s
Audit Committee Report for the
year ended 31 March 2026. The
report provides an overview of
the Committee’s role and how it
has discharged its responsibilities
in monitoring and reviewing the
integrity of nancial information and
in ensuring appropriate challenge
and oversight across the Company’s
internal control environment and
nancial reporting, setting out the
signicant issues we have reviewed
and concluded on during the year.
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Annual Report and Accounts 2026
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 nancial
controls and risk management processes,
notably reviewing the actions identied 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 nancial
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 Board. In line with the 2024 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 Our risks section on page 27.
Internal Audit
Through the Committee, the Group’s Internal
Audit function provides independent assurance
to the Board on the eectiveness 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 sucient to provide the level
of assurance required.
The Audit Committee receives reports from
the Internal Audit function on a quarterly
basis. These reports enable the Committee to
discuss key ndings, 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.
Internal Audit eectiveness review
We monitor and assess the role, eectiveness
and independence of the Internal Audit function
in the overall context of the Group’s risk
management systems, annually.
The Committee conrms that it is satised
that, throughout the reporting period, the
Internal Audit function provided the level of
assurance required and had an appropriate
level of resources to carry out its responsibilities
eectively 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 the Director
of Group Audit and Risk, whose tenure means
his independence and objectivity is subject to
increased scrutiny from the Committee.
Whistleblowing
The Group has established formal whistleblowing
procedures by which all employees may, in
condence, raise concerns about possible
improprieties in nance 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 condence 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 ndings reported to the Audit Committee
and all signicant matters reported directly to
the Board.
The Audit Committee monitors and reviews
the eectiveness of the Group’s whistleblowing
arrangements. Following its annual review of
whistleblowing arrangements, the Committee
is satised that they are eective, 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 satised that these were eective.
The Board has conrmed that, through the Audit
Committee’s review of the key nancial and
internal control matters as detailed above, it
has reviewed the eectiveness of the system of
internal, nancial, operational and compliance
controls and risk management.
Review of nancial statements
and reporting
The Audit Committee is responsible for reviewing
the appropriateness of, and monitoring, the
nancial 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 signicant
judgement and estimation and considers whether
these correlate with the key audit risks identied
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 nancial 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 2026, 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 2026 are 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 conrmed to the Board,
whose statement in this regard is set out
on page 71.
Signicant nancial statement
reporting issues
In reviewing the nancial 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 following were the
most signicant issues, judgements, estimates
and policies for the Period in the opinion of the
Audit Committee.
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.
Audit committee report
continued
54
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
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 fullled 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 aect
future attrition, and is discounted to reect
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 dierent which would
aect 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.
Audit committee report
continued
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.
In addition to the signicant nancial matters
noted above, the Audit Committee also
considered the carrying value of the Company’s
investments as this is a key audit matter
identied by KPMG. The Committee were
satised with the carrying value and noted that
no issues were raised by KPMG.
Going concern and
viability assessments
The Committee reviewed the Group’s going
concern and viability statements as set out on
page 40. 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 satised that the viability statement
set out in the Strategic Report presented a
reasonable outlook for the Group to March
2029 and recommended to the Board the
adoption of both the going concern and
viability statements for inclusion in this report.
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 15 September 2025, KPMG LLP
was reappointed as AO’s External Auditor for
the nancial year ended 31 March 2026. The
External Auditor was not asked to look at any
specic areas by the Audit Committee during
the review period.
Review of eectiveness of
external audit process
A key responsibility of the Committee is to review
and monitor the eectiveness of the external
audit process and independence of the External
Auditor. The assessment of the audit eectiveness
for the year ended 31 March 2025 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 identied;
• the key controls that the External Auditor relied
on to address any identied risk to audit quality,
such as appropriate audit methodologies;
• the ndings from internal and external
inspections of the external audit and audit rm;
• 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 rm 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 signicant 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
satised that: KPMG delivered a robust and
quality audit with the appropriate resources
available to the Company; suitable focus was
placed on the signicant risk areas and key
areas of accounting judgement; and that they
provided eective challenge to management.
We therefore concluded that the relationship
with the External Auditor continued to work well
and we are satised with their eectiveness
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 nancial year ended 31 March
2017 and was reappointed at the 2025 AGM.
Roger Nixon was the Audit Partner for the year
ended 31 March 2026.
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
was required to retender the external audit
contract by no later than the 2027 year end
audit, this being ten years since appointment.
55
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Audit committee report
continued
Under the CMA Order, when an incumbent
Auditor has been in oce for ve 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 did, therefore, retender the
external audit contract and commence this
process during the year. A list of invitees was
approved by the Committee in November
2025. Tender responses were collected and
evaluated in January 2026. Interviews with the
Committee were conducted in March 2026, with
KPMG and Grant Thornton making it through to
this stage. A nal decision was made in March
2026, and it was decided that KPMG should be
reappointed. This was based on a structured
set of criteria designed to assess both audit
quality and overall value. The assessment
placed signicant emphasis on the ability to
deliver a high-quality audit, including relevant
sector experience, technical capability, use of
technology and innovation, exibility to support
the Group’s future development, and the
provision of value-added insights for the Board
and Audit Committee. Proposals were also
assessed on team quality and t, covering the
experience of proposed partners and managers,
arrangements for succession planning and
continuity, and the approach to engagement
and communication with management
and the Audit Committee. Cost and value
for money formed a further key criterion,
including fee transparency, the ecient use of
technology and data analytics, and condence
in achieving cost eciencies over time. In
addition, consideration was given to the overall
quality of submissions and presentations. The
criteria were weighted to reect their relative
importance, with audit quality, team t and cost
each carrying equal weighting, supplemented
by qualitative factors.
Reappointment of External Auditor
for the next nancial year
Through open and honest dialogue with the
External Auditor, as well as feedback received
from the Executive Directors and senior
management and learnings from the tender
process, the Committee is satised with the
objectivity and independence of the External
Auditor. The Committee is also satised 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 2026 AGM.
Statement of compliance with the
Competition and Markets Authority
(“CMA”) Order
The Company conrms 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
specied 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
aect their objectivity and independence or
create a conict of interest.
During the year, KPMG undertook non-audit-
related assignments relating to the review of the
Group’s half-year report amounting to £75,000
(2025: £72,000), representing c.7.6% of the
value of the Group audit fee (2025: c.7.2%). 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 satised with work performed and considered
the level of these fees, determining that they are
not material relative to KPMG’s income from the
external audit, and, therefore, did not conict with
KPMG’s objectivity and independence.
The Group has also continued with the
appointment of other accountancy rms 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 2027.
External Auditor fees
During the nancial year, the Group External
Auditor’s fees were £990k (2025: £1m). The Audit
Committee was satised that the level of audit
fees payable in respect of the audit services
provided was appropriate and that an eective
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 nancial 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 aect its
independence and objectivity. The External
Auditor reported to the Committee that it had
considered its independence in relation to the
audit and conrmed 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 2027
A forward agenda will be used for the coming
year’s activities focused on the review of the
annual nancial 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
ndings and recommendations.
Shaun McCabe,
Chair, Audit Committee
16 June 2026
56
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Directors’ Remuneration report
Ensuring a reward strategy
that supports short- and
long-term sustainable
performance.”
Peter Pritchard
Chair, Remuneration Committee
• Considered pay levels for the wider workforce.
• Reviewed the Company’s Gender Pay Gap
report and recommended actions.
• Determined the remuneration for FY27
for our Executive Directors and certain
senior management.
• Set the performance conditions for the
AO Incentive Plan FY27 Award.
Overview
Committee member
Meetings attended/
Meetings eligible
to attend
Peter Pritchard 6/6
Shaun McCabe 6/6
Sarah Venning 6/6
Geo Cooper 6/6
Committee membership
and Governance
The Committee comprises Peter Pritchard (Chair),
Shaun McCabe, Sarah Venning and Geo Cooper.
Peter, Shaun and Sarah are all independent
Non-Executive Directors and Geo was deemed
independent on appointment as Chair of the
Board. There were 6 meetings of the Committee
during the year, all of which were attended in full.
The full Terms of Reference of the Committee
are available on the Company’s corporate
website at www.ao-world.com.
FY26 highlights and to date
Highlights of the work of the Remuneration
Committee in FY26 and to the date of this report:
• Determined the levels of vesting for the AO
Incentive Plan FY26 Award.
• Determined the shares to be released
pursuant to the AO Incentive Plan FY23 Award.
• Reviewed the eectiveness of the Directors’
Remuneration Policy.
FY26 AOIP Performance Snapshot:
Performance Condition Weighting Result* Vesting %
Financial B2C Revenue 15% £911m 8.2%
Group Adjusted PBT 45% £50.5m 36.4%
Average Daily Cash 10% £75.1m 10%
Strategic Trustpilot Score 10% 4.9 10%
Engagement Index Score 5% 80.3 3.2%
Development
of Membership 7.5% Full attainment 7.5%
Development of
Mobile Business 7.5% Full attainment 7.5%
Total 82.8%
Director Compensation implementation for FY27
Base Salary
2.5% increase (aligned to the majority of the wider workforce) CEO: £571k;
CFO/COO: £487k
Flexible Benets inc. pension 13% of salary for CEO
14% 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
and Chair
Increase Chair fee to £225k (FY26: 210k); Increased base NED fee to £60k
(FY26: £57k). No changes to additional fees.
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.
• A concise summary of the Directors’ Remuneration Policy (which was approved by shareholders
at the 2025 AGM).
• The Annual Report on Remuneration for FY26 (which will be subject to an advisory vote at the
2026 AGM).
57
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
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 the
nancial year ended 31 March 2026 (FY26).
Looking back
FY26 was a year of continued strategic delivery
and disciplined execution. Trading performance
was strong with B2C revenue growth of 9.5% YOY,
and record adjusted PBT delivered at £50.5m (up
16.1% YOY). Customer satisfaction stayed market
leading, and culture/engagement remained
strong. From a strategic perspective the work
done to develop our membership proposition and
strengthen our mobile business has gone well.
These outcomes are appropriately reected in
variable pay, with a high proportion of Executive
reward delivered through performance linked
arrangements under our single incentive plan,
the AO Incentive Plan (“AOIP”).
AOIP Award FY26
As with prior years, the FY26 AOIP combined
nancial, stakeholder and strategic measures.
The nancial performance is detailed above and
earlier in this report, with strong outturns for both
the Group adjusted PBT (36.4% out of 45%) and
average daily cash (10% out of 10%) reecting
our strong performance in the year. The B2C
revenue outturn was 8.2% (out of 15%), despite
c.9.5% total growth YoY, reecting 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
almost 1,000,000 customer reviews, a market
leading score. Accordingly, the Committee has
determined that this performance condition has
been met in full.
Three employee surveys have been conducted
in house during FY26, which assessed our
Engagement Index Score yielding an average
score for the year of 80.3, 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 3.2% (out of 5%).
In relation to the rst strategic transformation
measure, the Committee was pleased with
the work done to develop the membership
proposition with the base increasing, improved
cross category repeat, lower customer acquisition
costs, enhanced personalisation infrastructure
and continued proposition innovation with our
Switch24 and MVNO initiatives. Accordingly, the
Committee has determined that this performance
condition has been met in full.
In relation to the second strategic transformation
measure, the Group completed a comprehensive
strategic, nancial and operational review
of the mobile division and actions have been
implemented with the division now protable.
Accordingly, the Committee has also determined
that this performance condition has been met
in full.
In total, the Committee has awarded 82.8% of the
maximum AO Incentive Plan Award, which we feel is
warranted and well-earned in a strong year for the
Group. On this basis, no discretion was 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 of overall
business performance over the period 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 FY26 Award
are disclosed on page 61.
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
reecting the Company’s strong performance
and the broader stakeholder experience.
AOIP FY23 Award – release of
conditional deferred shares
Each of John Roberts and Mark Higgins were
granted a conditional deferred share award
pursuant to the FY23 AOIP Award, which had a
deferral period spanning FY24 to FY26, inclusive,
and which – at the point of grant – had a value
of £778,401 and £587,272, 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 FY26. The Remuneration
Committee has deemed that the performance
underpin has been met in full given the
protable growth during the vesting period and,
accordingly, the share awards should vest in
full. Accordingly, nil-cost options over 918,900
and 693,273 shares for John and Mark will vest
following the announcement of our FY26 results.
The CEO’s total remuneration was £2.0m,
compared with £1.4m last year. This increase
mainly reects (i) a slightly higher AOIP
cash payout for FY26 and (ii) a higher value
recognised for AOIP conditional deferred shares
that vested in the year.
Value Creation Plan
During the year, we continued to engage with
AOers on our all-employee AO Value Creation
Plan (“VCP22”), which targets sustained protable
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 eectively 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 2025 and has been
in force throughout the year under review. The
Committee reected on the policy during the
year and its operation and 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 eectively 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.
As a result, no new Policy will be put to
shareholders at the forthcoming AGM.
Wider workforce pay
A pay increase of 2.5% has been awarded to the
majority of the workforce to continue to support
our people with the cost-of-living increases,
with certain areas and individuals receiving
higher increases either to remain competitive
in market, or as a result of increases in national
minimum wage or to reect high performance.
Approach to remuneration for FY27 Executives
Both John and Mark have received pay increases
of 2.5% for the year ahead, in line with the cost-
of-living increase granted to the wider workforce.
Flexible benet amounts broadly remain
unchanged against the prior year (with Mark’s
total benet amount falling slightly as a
percentage of salary).
Directors’ Remuneration report
continued
58
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
FY27 AOIP
In terms of variable pay, the Executives will
be entitled to participate in the AOIP with an
opportunity level of 300% of salary.
The Committee has reviewed the FY27 AOIP
construct to ensure it continues to steer value
creation and align to the Board’s strategic
priorities. We intend to retain the AOIP’s single
plan architecture and the familiar three pillar
structure (nancial, stakeholder, strategic),
while updating measures to reect the
Group’s nancial position and priorities.
Financial framework
• Adjusted PBT (45%) – remains the principal
nancial driver of value.
• UK Retail B2C revenue growth (15%) – maintains
top line ambition in the core channel.
• Free cash ow metric (10%).
As the Group has progressed to a structurally
cash generative position, average daily cash
has been replaced by free cash ow as the
relevant metric. Free cash ow provides a
more meaningful measure of the quality and
sustainability of cash generation, supporting a
sharper focus on returns and capital discipline.
Stakeholder and strategic targets
• Trustpilot (10%) and Engagement Index Score
(5%) are being retained – reinforcing AO’s
customer obsession and cultural strength.
• Two strategic targets (7.5% each): Membership
Development and Smarter Operations. The
Membership Development measure incentivises
the delivery of sustainable membership growth
by improving retention, deepening customer
engagement and expanding the membership
proposition through new recurring revenue
products whilst the Smarter Operations
measure focuses on driving structural eciency
improvements through technology, automation
and process optimisation, supporting improved
operational leverage and medium term
margin sustainability.
This mix preserves the nancial majority, keeps
customers and AOers central to pay outcomes,
and anchors incentives to the two strategic levers
where execution will compound long term value.
Non-Executives
Fees for the Non-Executive Directors (including
the Chair) were reviewed during the year and
benchmarked against peers. It was determined
to increase the Chair’s salary by c.7% from £210k
to £225k reecting external benchmarking,
time commitment and performance (whilst also
recognising that no increase was made last
year). For the same reasons the base NED fee
has increased from £57k to £60k.
Further details regarding the implementation
of our policy in the year ahead are provided on
page 65.
Employees
As set out in the Corporate Governance
report, Chris Hopkinson, our designated People
Champion, has headed up engagement with the
workforce over the year, 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
FY26, the key features of the policy and how
we propose to approach FY27.
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
16 June 2026
Directors’ Remuneration report
continued
59
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Policy report
The shareholder-approved Directors’
Remuneration Policy (the “Policy”) was
approved on 15 September 2025 and remains
unchanged for FY27. No new Policy will be put
to shareholders at the forthcoming AGM; the
existing Policy continues to apply as set out
in the 2025 Annual Report and Accounts. The
summary table of the policy can also be found
at ao-world.com/investor-centre/governance-
and-leadership/governance-documents.
Policy approach (at a glance)
•
Purpose & alignment.
Reward supports
AO’s strategy and long-term value
creation, emphasising customer outcomes,
protable growth, capital discipline and
shareholder alignment.
•
Pay mix.
The Policy comprises xed pay
(salary, pension, benets), performance-linked
pay delivered through the single combined
plan (the AO Incentive Plan – AOIP) and the
Value Creation plan (“VCP”) which rewards
exceptional, sustained value creation over
a multi-year horizon, tightly aligned with
shareholder outcomes.
•
Shareholder alignment & safeguards.
Strong
alignment through shareholding guidelines,
deferral features within the AOIP, and malus
& clawback provisions (unchanged).
Fixed pay (salary, exible pension and benets)
Set at market-appropriate levels reecting role,
experience and performance; exible pension
and benets provides market competitive
benets, with pensions contributions within
this aligned with the wider UK workforce
approach (unchanged).
AOIP – AO Incentive Plan (single combined plan)
Purpose.
Align executives with delivery of
AO’s near- and long-term strategy within one
integrated incentive; balance annual execution
with multi-year value creation; reinforce
share ownership through equity deferral and
shareholding guidelines.
Measures & balance.
AOIP outcomes are
based on a balanced scorecard of nancial,
strategic/operational and customer measures,
with an underpin based on overall business
performance . The Board expects continued
emphasis on Membership Development (e.g.,
CLV, repeat behaviour, retention) and Smarter
Operations (AI-enabled service, warehouse
robotics, eciency/cost-to-serve), together with
returns/protable growth measures. Weightings
and targets are disclosed annually in the ARR.
Time horizon & alignment.
A material portion
of AOIP is delivered in shares with multi-year
deferral and with malus and clawback
provisions applying (unchanged in policy).
Discretion.
The Committee may exercise
discretion to ensure formulaic outcomes
reect underlying performance, risk and
shareholder experience.
VCP – Value Creation Plan (summary)
Purpose.
A separate long-term, share-based
framework intended to reward exceptional,
sustained value creation over a multi-year
horizon, tightly aligned with shareholder
outcomes; used in limited circumstances
alongside the AOIP (unchanged in policy).
Performance focus.
Oriented to absolute value
creation over time (i.e., demanding share price/
value-based hurdles), with no vesting unless
a material threshold level of value creation is
achieved; scaled vesting thereafter subject
to Committee judgement and underpins.
For Executive Directors, performance will be
assessed based on the share price in the periods
up to the end of FY27, FY28 and FY29, ensuring
that share price growth must be sustained.
Alignment & safeguards.
Equity-settled outcomes
with robust malus/clawback, post-vesting holding
and two-step assessment where relevant.
Shareholding requirements (employment and
post-cessation)
Executive Directors are expected to build and
maintain meaningful minimum shareholdings
during employment, with a dened post-cessation
holding period where applicable (unchanged).
Recruitment, promotion and leavers (principles)
Appointments follow this Policy framework using
AOIP (and, in rare cases, VCP) within normal
limits. Leaver treatment follows the plan rules,
with pro-ration and performance testing applied
as appropriate; no payments for loss of oce
beyond contractual entitlements.
Directors’ Remuneration report
continued
60
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Annual Report on Remuneration
The Annual Remuneration for FY26 was structured within the framework of the remuneration policy adopted by shareholders at 2025 AGM and has been implemented accordingly. This will be put to an
advisory vote at the Company’s AGM in September.
Single gure of total remuneration for FY26 (Audited)
The audited table below shows the aggregate emoluments earned by the Directors of the Company in respect of FY26 being the period 1 April 2025 to 31 March 2026 and, for comparison, the amounts
earned in respect of FY25, being the period 1 April 2024 to 31 March 2025.
Salaries and
fees and fees
£
Benets
(exc pension)
1
£
Pension
1
£
Total xed
£
AOIP
cash
2
£
AOIP
Deferred
shares
3
£
Total
variable
£
Total
£
Executive Directors
John Roberts FY26 557,080 49,232 22,000 628,312 461,262 920,971 1,382,233 2,010,546
FY25 546,174 65,836 4,000 616,010 422,193 346,965 769,158 1,385,168
Mark Higgins
4
FY26 475,000 57,089 10,000 542,089 393,300 694,836 1,088,136 1,630,224
FY25 400,500 49,907 10,000 460,407 309,587 261,719 571,306 1,031,713
Chairman
Geo Cooper FY26 210,000 0 0 210,000 0 0 0 210,000
FY25 210,000 0 0 210,000 0 0 0 210,000
Non-Executive Directors
Christopher Hopkinson FY26 59,000 0 0 59,000 0 0 0 59,000
FY25 59,000 0 0 59,000 0 0 0 59,000
Shaun McCabe FY26 76,000 0 0 76,000 0 0 0 76,000
FY25 76,000 0 0 76,000 0 0 0 76,000
Peter Pritchard FY26 78,000 0 0 78,000 0 0 0 78,000
FY25 78,000 0 0 78,000 0 0 0 78,000
Sarah Venning FY26 67,000 0 0 67,000 0 0 0 67,000
FY25 67,000 0 0 67,000 0 0 0 67,000
Sophie Tomkins
5
FY26 36,750 0 0 36,750 0 0 0 36,750
Total FY26 1,558,830 106,321 32,000 1,697,151 854,562 1,615,807 2,470,369 4,167,520
FY25 1,436,674 115,743 14,000 1,566,417 731,780 608,684 1,340,464 2,906,881
1 The Group operates a exible benets scheme for the Executives and other management. Pension contributions show the total amount each Executive contributed to the pension from their exible benet allowance, with the balance of the exible
benets allowance shown under benets. John Roberts’ total pension contributions for FY26 were £22,000, comprising £10,000 for FY26 and £12,000 relating to the two prior nancial years (FY24 and FY25), where contributions were £4,000 in each year.
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 FY26. Following partial attainment of the performance conditions 82.8% of the award has vested of which one-
third has been 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 2029 subject to continued employment and attainment of the performance underpin. The value
disclosed above relates to the cash portion of the FY26 award only, with the share portion due to be disclosed in the FY29 single gure.
3 Each of John Roberts and Mark Higgins were granted a conditional deferred share award pursuant to the FY23 AOIP Award of 918,900 and 693,273 shares respectively which had a deferral period spanning FY24 to FY26 inclusive and which at the point
of grant had a value of £778,401 and £587,272 respectively. The Remuneration Committee has deemed that the performance underpin has been met in full and accordingly options over 918,900 and 693,273 shares will vest to John and Mark following
announcement of our FY26 results. For the purpose of the single gure calculations these awards have been valued based on the three month average share price to 31 March 2026 of 100.23p. The share price used to determine the award in July 2023
was 85p. Of the value disclosed £139,906 for John and £105,554 for Mark is attributable to share price growth. For the deferred share option value for FY25 reported for both John and Mark , in the previous report we used an estimate of 98.7p (being the
3 month average share price to 31 March 2025); when the option became exercisable on 30 June 2025, the actual share price was 96.80p and the values in the single gure above have been adjusted accordingly.
4 The increase in Mark Higgins’ salary year on year reects Mark’s promotion to and additional responsibilities associated with the combined CFO and COO role.
5 Sophie Tomkins’ fees reect her appointment part way through the year on 1 September 2025.
Directors’ Remuneration report
continued
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AO World Plc
Annual Report and Accounts 2026
Details of variable pay earned in FY26 (Audited)
AO Incentive Plan FY26 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 2026. The targets for the AO Incentive Plan Award were weighted
towards nancial 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 FY26 AO Incentive Plan Award.
Measure (weighting) Targets
% payout (for
this element)
Performance
achieved Award
B2C revenue (15%) Threshold £875.65m 25% £911m 8.2%
On target £920.70m 62.5%
Stretch £966.70m 100%
Adjusted PBT (45%) Threshold £40m 25% £50.5m 36.4%
On target £47m 62.5%
Stretch £54.1m 100%
Average Daily Cash (10%)
1
Threshold £23.1m 25% £75.10m 10%
On target £33.1m 62.5%
Stretch £43.1m 100%
Ao.com Trustpilot (10%) Threshold 4.6 25% 4.9 10%
On target 4.7 62.5%
Stretch 4.8 100%
Engagement Index Score (5%)
2
Threshold 75 25% 80.3 3.2%
On target 80 62.5%
Stretch 85 100%
Strategic – Mobile (7.5%)
Committee
assessment Full attainment 7.5%
Strategic – Membership (7.5%)
Committee
assessment Full attainment 7.5%
Total 82.8%
1 In line with the principles agreed by the Committee to measure Average Daily Cash performance, the impact of Board
approved share purchase activities was neutralised to measure performance on a like for like basis compared to how
the targets were set.
2 This is the average Engagement Index Score taken across the three surveys conducted in the year.
Performance against nancial targets
As is covered in the CFO/COO report, the Group continued to focus on protable growth this
year and performance has been pleasing against those targets with us achieving Adjusted PBT
above target and Cash at above the stretch target. The B2C Revenue outturn was 8.2% (out of
15%), despite c.9.5% B2C revenue growth YoY reecting the stretching nature of the targets set
by the Committee.
Accordingly, 54.6% of the award relevant to nancial targets (of the possible 70%) has been met.
Performance against strategic targets
Customer satisfaction
Customer satisfaction, measured via Trustpilot, performed strongly with AO ending the year with
an improved score of 4.9 out of 5 from over 1,000,000 customer reviews, a market leading score.
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 FY26, which assessed our
Engagement Index Score. The rst was conducted in June 2025, which resulted in a score of 82, the
second in September 2025, which resulted in a score of 79 and a third score of 80 in January 2026,
which gave an average score of 80.3. This translates that engagement at AO is regarded as Very
Good. The Committee is also pleased with the participation rates, therefore determining that this
performance condition vested in line with the formulaic approach at 3.2% (out of 5%).
Strategic transformation
In relation to the rst strategic transformation measure, the Committee was pleased with the work
done to develop the membership proposition with the base increasing, improved cross category
repeat, lower CAC via supplier funded brand takeovers, enhanced personalisation infrastructure
and continued proposition innovation with our Switch24 and MVNO launches. Accordingly, the
Committee has determined that this performance condition has been met in full.
In relation to the second strategic transformation measure, the Group completed a comprehensive
strategic, nancial and operational review of the mobile division and actions have been implemented
with the division now protable. Accordingly, the Committee has also determined that this performance
condition has been met in full.
In total, therefore, we have awarded 82.8% 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% 82.8% £461,262 £922,524
CFO 300% 82.8% £393,300 £786,600
1 The cash element will be paid in June 2026.
2 The share award will similarly be granted in June 2026 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 nancial year ending 31 March 2029 as well
as the Executive’s continued employment.
Directors’ Remuneration report
continued
62
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Release of shares under the FY23 AOIP Award
Each of John Roberts and Mark Higgins were granted a conditional deferred share award pursuant
to the FY23 AOIP Award (of 918,900 and 693,273 shares respectively) which had a deferral period
spanning FY24 to FY26 inclusive and which at the point of grant had a value of £778,401 and
£587,272 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 FY26. The Remuneration Committee has deemed that the
performance underpin has been met in full and accordingly options over 918,900 and 693,273
shares will vest following the announcement of our FY26 results.
For the purpose of the single gure calculations these awards have been valued based on the
three month average share price to 31 March 2026 of 100.23p. The share price used to determine
the award in July 2023 was 85p. Of the value disclosed £139,906 for John and £105,554 for Mark is
attributable to share price growth.
Recovery provisions
AOIP and VCP awards are subject to recovery provisions that enable the Committee to withhold or
recover the value of awards. This applies up to ve years of the grant date/payment for the AOIP and
within three years of each measurement date under the VCP. The Committee considers these timeframes
to be sucient for any relevant events to be identied and are consistent with market practice.
The table below sets out details of the circumstances in which malus and clawback may be applied.
AOIP VCP
• 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 eect.
• a material misstatement of any Group Member’s nancial 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 nancial
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 eect.
Malus or clawback have not been applied in the year.
Percentage change in remuneration levels
The table below shows the movement in the salary, benets and cash element of the AO Incentive Plan Award for each Director between the nancial year ended 31 March 2026 and the previous three
nancial years compared to that for the average employee of the Company – AO World Plc – (but not the wider Group). For the benets and bonus/Incentive Award (cash element) per employee, this is
based on those employees eligible to participate in such schemes.
FY26 vs FY25 FY 25 vs FY24 FY24 vs FY23 FY23 vs FY22 FY22 vs FY21
Salary
1
Taxable
benets
2
AOIP cash
element
3
Salary
1
Taxable
benets
2
AOIP cash
element
3
Salary
1
Taxable
benets
2
AOIP cash
element
3
Salary
1
Taxable
benets
2
AOIP cash
element
3
Salary
1
Taxable
benets
2
AOIP cash
element
3
John Roberts 2% 2% 9% 7% 4% -16% 4% 4.7% 29% 3% 2.0% 445% 2.7% 4.3% -84%
Mark Higgins 18.6% 12% 27% 4% 4% -19% 4% 6.1% 29% 3% 10.8% 429% 2.7% 1.1% -84%
Geo Cooper 0% 0% 0% 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Chris Hopkinson 0% 0% 0% 14.04% 0% 0% 3.60% 0% 0% 0% 0% 0% 0% 0% 0%
Shaun McCabe 0% 0% 0% 5.56% 0% 0% -4% 0% 0% 36.6% 0% 0% 0% 0% 0%
Peter Pritchard 0% 0% 0% 24.03% 0% 0% 17.27% 0% 0% 36.6% 0% 0% 0% 0% 0%
Sarah Venning 0% 0% 0% 21.05% 0% 0% 3.64% 0% 0% 36.6% 0% 0% 0% 0% 0%
Other employees
(AO World Plc) 10.6% -7.1% 0.13% 0.04% -0.5% -19% 8.15% -1.8% 18.1% 8.25% 27.6% 8% -1.1% 7.4% 221%
1 Reects 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 benet entitlements per se for employees or Executives; however, we did introduce a exible benet scheme part way through FY23, which gives Executives a “benet allowance” that they can
spend on a choice of benets. The allowance has been calculated based on the costs of the provision of benets to which they were entitled (whether they had chosen to take that benet 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 nancial year received in cash, compared to the cash element participants in the
AO Incentive Plan, are expected to receive relating to the following nancial year, in each case, excluding Executive Directors.
4 No comparative gures have been given for Sophie Tomkins, since she was only appointed part way through FY26.
Directors’ Remuneration report
continued
63
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Directors’ Remuneration report
continued
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 2016 to 31 March 2026. 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.
TSR (Rebased) AO World Plc vs. FTSE 250
Total remuneration of CEO
The table below shows the total remuneration gure for the Chief Executive during the nancial
years ended 31 March 2017 to 31 March 2026. The total remuneration gure includes the annual
bonus payable for performance in each of those years up to FY18 and, from FY19, the cash element
of the AOIP. The total remuneration gure from FY23 also includes the value of vested options under
the AOIP.
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26
Total remuneration
(£’000) 575# + 781# 551* + 733* 977* 611* 1,132* 1,542* 1,392* 2,011*
Annual bonus
(% of maximum) 10% 37.5% – – – – – – –
AO Incentive Plan
Award (% of maximum) – – 50.5% 47.8% 97.5% 15% 79.3% 98.7% 77.3% 82.8%
PSP vesting
(% of maximum) – – 8.59% – – – – – –
* John Roberts, # Steve Caunce, + Figures calculated for full year pro-rata.
200
20
40
60
80
100
120
140
160
180
0
Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 23 Mar 24 Mar 25 Mar 26
AO World Plc FTSE 250
Source: LSEG Datastream
Relative importance of the spend on pay
The table below shows the movement in spend on sta costs versus that in distributions to shareholders.
FY25 FY26 % change
Sta costs
1
£125.9m £139.7m 11.0%
Distributions to shareholders
The Company conducted a share buyback
programme over the year of £10m in aggregate
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 gure of remuneration (“STFR”) of the CEO to the
equivalent pay for the 25th, 50th and 75th percentile employees (on a full-time equivalent basis).
Year Method
P25 25th
percentile
pay ratio
P50 50th
percentile
pay ratio
P75 75th
percentile
pay ratio
FY26 Option A 69:1 59:1 45:1
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 gure of remuneration of all AOers employed by the Group for FY26 was calculated and ranked using
2025/26 P60 and P11D data, employer pension contributions and payments under the Company share schemes, in line with
the reporting regulations. The total remuneration for FY26 for the employees identied at P25, P50 and P75 is £28,965,
£34,351 and £44,703 respectively. The base salary in respect of FY26 for the employees identied at P25, P50 and P75 is
£27,816, £27,513 and £40,808 respectively.
3 FY26 payments to the wider employee base referred to above include the FY25 cash element of the FY26 AOIP payment,
which was paid in FY26, but for the CEO, we have used the single total gure value, which includes the FY26 AOIP cash
payment to be paid in early FY27, but which relates to the FY26 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, reecting our pay philosophy; a fair and attractive reward
package, market competitive in the context of the relevant talent market and dierentiated by the
level of value creation.
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Overview Strategic Report Our Governance Our Financials
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Annual Report and Accounts 2026
The ratios, therefore, reect the dierent 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.
The increase in the CEO pay ratio year-on-year is primarily driven by higher variable remuneration,
with a signicant proportion of total pay linked to the AOIP. For FY26, AOIP vested at 82.8% (FY25:
77.3%), and the value recognised in respect of deferred shares vesting in-year was materially higher
than the prior year. This reects stronger underlying business performance and the alignment of
executive pay with outcomes.
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.
Payments to past Directors and loss-of-oce payments (Audited)
There were no payments to past Directors or loss of oce payments made in the year ended
31 March 2026.
External appointments
No fees were received by Executive Directors for external appointments during the year ended
31 March 2026.
Directors’ shareholdings and share interests (Audited)
Directors’ shareholdings as at 31 March 2026 are set out below.
During the year under review, no options were exercised by either of the Executive Directors, save as
disclosed in Notes 3 and 4 below.
There have been no changes to Directors’ shareholdings during the period from 1 April 2026 to the
date of this report save for a sale of 5,359,056 shares by John Roberts on 17 April 2026 and the sale
by the Jolly Foundation (a charitable trust of which John is a trustee) of a further 2,221,326 shares on
the same date.
Directors’ shareholdings
Shares held
benecially
at 31 March
2026
1
Target
shareholding
guidelines
(% of salary)
2
Target
shareholding
achieved
AOIP share
awards
3,4,5
SAYE
options
6
Geo Cooper 154,274 N/A N/A N/A N/A
John Roberts 88,585,888 200% Yes 3,060,072 20,222
Mark Higgins 160,138 200% No 2,691,646 –
Chris Hopkinson 21,080,429 N/A N/A N/A N/A
Shaun McCabe NIL N/A N/A N/A N/A
Peter Pritchard 93,517 N/A N/A N/A N/A
Sarah Venning NIL N/A N/A N/A N/A
Sophie Tomkins NIL N/A N/A N/A N/A
1 Excludes shares held by connected persons. For John Roberts, it excludes 4,547,115 shares held by a charitable trust
as at 31 March 2026 of which John Roberts and his spouse Sally Roberts are each a trustee, member and director.
Chris Hopkinson’s holding in the table above excludes 2,499,999 shares held by a pension fund of which Chris is one of
the beneciaries but not the sole beneciary. During the year:
– John Roberts, acquired a total of 752,015 shares following the exercise of employee share options (including his
remaining PSP options), he gifted 4,000,000 shares to charity and sold, in aggregate, 4,218,053 shares.
– Mark Higgins acquired 33,962 shares following the exercise of his SAYE options and sold 147,090 shares.
– Chris Hopkinson sold an aggregate of 1,200,000 shares.
2 Comprises shares held benecially only (and excludes options).
3 For John Roberts, 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 vested in July 2025 (and are then 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 following announcement of our FY26 results 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 following announcement of
our FY27 results subject to the attainment of the performance underpin and continued employment (and then be subject
to an additional one-year holding period) and options over 889,173 shares were awarded in September 2025 as part of the
AOIP FY25 award (based on a share price of £0.95), which will vest following announcement of our FY28 results subject to
the attainment of the performance underpin and continued employment (but with no holding period).
4 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 but which remain unexercised. 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 vested in
July 2025 (and are then 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 following announcement of our FY26
results 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 following
announcement of our FY27 results subject to the attainment of the performance underpin and continued employment
(and then be subject to an additional one-year holding period). Options over 652,035 shares were awarded in September
2025 as part of the AOIP FY25 award (based on a share price of £0.95), which will vest following announcement of our FY28
results subject to the attainment of the performance underpin and continued employment (but with no holding period).
5 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.
6 John Roberts entered into three-year SAYE contract, under which options over 20,222 shares were granted on 1 March 2026.
Directors’ Remuneration report
continued
65
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Implementation of remuneration policy for 2026/2027 (“FY27”)
A summary of the Policy can be found on page 59 of this Annual Report.
Salary
The performance of the business this year has been strong and our Executives have played hugely
signicant roles in continuing to grow the business, deliver improved operational performance,
protability and the creation of shareholder value.
Both John and Mark have received pay increases of 2.5% for the year ahead, in line with the
cost-of-living increase granted to the wider workforce.
Flexible benet amounts broadly remain unchanged against the prior year (with Mark’s total
benet amount falling slightly as a percentage of salary).
The current salaries as at 1 April 2026 (and those as at 1 April 2025) are as follows:
Individual Role
Base salary at
1 April 2025
Base salary at
1 April 2026 % increase
John Roberts CEO £557,080 £571,007 2.5%
Mark Higgins CFO and COO £475,000 £486,875 2.5%
Pension and other benets
Executive Directors are eligible for a exible benets regime equivalent to 13% and 14% of salary
for the CEO/CFO respectively, which can be used to acquire benets as they see t. 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 FY27, the Executive Directors will have a maximum award opportunity of 300% of basic
salary. Performance will be measured between 1 April 2026 and 31 March 2027 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 FY27. 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 reects the underlying performance of the business.
Performance conditions for the FY27 AO Incentive Plan Award
We have continued to set the performance conditions along three sets of deliverables:
1. nancial (output) metrics, focused on adjusted prot before tax, Retail B2C revenue growth
(excluding musicMagpie) and free cash ow (45%, 15% and 10% weighting, respectively);
2. stakeholder impact measures, focusing on customers (Trustpilot) and employees
(Engagement Index Score) (10% and 5% weighting, respectively); and
3. two strategic measures, specically aimed at: (i) developing membership and (ii) becoming
smarter with our operations (both with a 7.5% weighting).
Financial
The Committee believes these performance conditions will focus management on protable
growth, with a PBT metric accounting for the lion’s share of the nancial metrics (45%). This,
combined with the UK Retail B2C Revenue (15%), free cash ow (10%) and the customer metric
(10%) will ensure a clear focus on sustainable growth with an exceptional customer proposition.
For the nancial/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
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 06 and 07 customer and
employee satisfaction are central to our strategy with both being key drivers for creating long-term
sustainable growth.
• Customer: Last year we refocused the AOIP on Trustpilot scores, and this metric will continue to
apply for FY27, reecting our commitment to positioning AO as the UK’s most trusted electrical
retailer, as set out in John’s report. Trustpilot provides a clear, transparent and publicly accessible
measure of customer trust, enabling the business to consolidate its focus on a single external
benchmark. This supports greater accountability and allows management to concentrate on
improving customer satisfaction while reducing waste and ineciency across the Group. The
measure applies solely to Trustpilot scores for ao.com. Given its importance to the Group’s long
term success, the weighting remains at 10%, reinforcing our continued focus on the customer
alongside driving protable growth.
• Employee: We continue to recognise our people as central to the Group’s success and, as in
the prior year, the AOIP includes an Engagement Index Score (“EIS”) measure. EIS captures
employee engagement across six dimensions: happiness, loyalty and retention, meaningful work,
discretionary eort, belonging and growth. Threshold, target and stretch scores are set at 75, 80
and 85 respectively. This measure carries a weighting of 5%.
Strategic
The nal measures are also strategic and are specically aimed at:
• Membership Development (7.5%) This measure incentivises the delivery of sustainable
membership growth by improving retention, deepening customer engagement and expanding the
membership proposition through new recurring revenue products.
• Smarter Operations (7.5%) This measure focuses on driving structural eciency improvements
through technology, automation and process optimisation, supporting improved operational
leverage and medium term margin sustainability.
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.
Directors’ Remuneration report
continued
66
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Performance
condition Weighting
Group nancial (70%) Adjusted PBT 45%
Retail B2C Revenue 15%
Free cash ow 10%
Stakeholder measures non-nancial (15%) Customer –
Trustpilot score
10%
Employee EIS Score 5%
Strategic measures non-nancial (15%) Membership
Development
7.5%
Smarter Operations 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 signicantly
stretching and, therefore, the Committee considers that this level of payout at target is appropriate.
25% of maximum pays out for threshold performance. Performance below threshold results in
zero payout.
The Committee has discretion to override the formulaic outcome if it considers that the formulaic
outcome is not reective of the underlying nancial or non-nancial performance of the Group,
or the individual performance of the participant over the relevant period.
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 FY27 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 peer companies. Following consideration of time commitment and
performance, certain increases were approved.
The Non-Executive Director fees for FY27 are, therefore, as follows:
FY26 FY27 % change
Chairman fee covering all board duties £210,000 £225,000 7.1%
Non-Executive Director basic fee £57,000 £60,000 5.3%
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%
Remuneration Committee membership
The members of the Committee were, for the year in question, Peter Pritchard, Shaun McCabe,
Geo 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 FY26, 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 Terms of Reference available to view on
ao-world.com/investor-centre/governance-and-leadership/governance-documents. 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.
Directors’ Remuneration report
continued
67
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Advisers to the Committee
Deloitte LLP provided advice during the year to 31 March 2026, 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 £11,650 plus VAT.
Shareholder feedback
At the 2025 AGM, the Annual Remuneration Report for the year ended 31 March 2025 together with
our current remuneration policy were put to shareholders. 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
2025: To approve the Directors’
Remuneration Report 507,415,696 99.1 4,693,287 0.9 512,108,983 2,097
2025: To approve the Directors’
remuneration policy 477,803,948 93.3 34,305,027 6.7 512,108,975 2,105
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
16 June 2026
Directors’ Remuneration report
continued
68
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Directors’ report
Additional Statutory Information
The Directors have pleasure in submitting their
report and the audited nancial statements
of AO World Plc (the “Company”) and its
subsidiaries (together, the “Group”) for the
nancial year to 31 March 2026. This report
sets out additional statutory information.
Results and dividends
The Group’s and Company’s audited nancial
statements for the year are set out on pages
73 to 121. The Directors do not recommend
payment of a dividend by the Company in
respect of the year ended 31 March 2026.
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 2026 and the date
of this document, the issued share capital of
the Company was £1,426,386.20, comprising
570,554,481 ordinary shares of 0.25p each.
Shortly following the date of this document,
the FY23 AOIP Deferred Share Awards will
vest and employees will be able to exercise
options to acquire an aggregate of 3,689,828 new
ordinary shares of 0.25p each in the Company; the
Company will satisfy these Awards by transferring
shares from its Employee Benet 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 nancial statements.
All the information detailed in Note 28 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 nancial statements.
At the Annual General Meeting of the Company,
to be held on 24 September 2026, the Directors will
seek authority from shareholders to allot shares
in the capital of the Company up to a maximum
nominal amount of £950,924.135 (380,369,654
shares) representing, approximately, 66.6% of
the Company’s issued ordinary share capital
(excluding treasury shares)) of which 190,184,827
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 85,526,116 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 nancial resources of the
Company, the Company’s share price and future
funding opportunities. The Directors will also take
into account the eects on earnings per share
and the interests of shareholders generally.
During the year, the Directors used the authority
granted at the 2025 Annual General Meeting to
purchase a total of 9,748,994 ordinary shares of
0.25 pence each in the capital of the Company.
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 prots 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 o-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. 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 certicated form, which is not fully paid,
provided that if the share is listed on the
Ocial 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 certicated form (whether fully paid or
not) unless the instrument of transfer (a)
is lodged, duly stamped, at the Oce or
at such other place as the Directors may
appoint and (except in the case of a transfer
by a nancial institution where a certicate
has not been issued in respect of the share)
is accompanied by the certicate 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 uncerticated form to a person who is
to hold it thereafter in certicated form in
any case where the Company is entitled to
refuse (or is excepted from the requirement)
under the Uncerticated 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 oce or employment
(whether through resignation, purported
redundancy or otherwise) because of a
takeover bid.
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Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Directors’ report
continued
Save, in respect of the Company’s share
schemes and the Revolving Credit Facility
agreement entered into with Barclays Bank
Plc, HSBC Bank Plc, NatWest Bank Plc and
Santander UK PLC on 8 October 2024, there
are no signicant agreements to which the
Company is a party that take eect, alter or
terminate upon a change of control.
Interests in voting rights
As at 31 March 2026, the Company had been
notied 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 signicant interests:
Shareholder
No. of
shares held
% voting
rights
Frasers Group PLC 147,467,7 75 25.85
Camelot Capital
Partners 117,526,508 20.60
John Roberts* 88,585,888 15.52
Lancaster
Investment
Management 29,339,031 5.14
Phoenix Asset
Management
Partners 28,751,179 5.04
Christopher
Hopkinson** 21,080,429 3.69
* 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, held a legal (but not benecial)
interest in 4,547,115 shares as at 31 March 2026.
** Holding excludes 350,857 ordinary shares held by
Gayle Halstead (dened under MAR as a person with
whom Christopher Hopkinson is closely associated) and
2,499,999 ordinary shares held in a pension of which
Christopher Hopkinson is one of the beneciaries.
Since the period end, and to 16 June 2026, the
Company has been notied of the following
changes in signicant interests:
Shareholder
No. of
shares held
% voting
rights
Frasers Group PLC 149,028,913 26.12
Camelot Capital
Partners 117,526,508 20.60
John Roberts* 83,226,832 15.52
Lancaster
Investment
Management 29,339,031 5.14
Phoenix Asset
Management
Partners 28,751,179 5.04
Christopher
Hopkinson** 21,080,429 3.69
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 oce 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 oce of CEO or to any other
Executive oce 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 t.
Retirement of Directors: Under the Articles, at
every Annual General Meeting of the Company,
all Directors who held oce at the time of the
two preceding AGMs, and did not retire at either
of them, shall retire from oce but may oer
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, with the
exception of Chris Hopkinson.
Removal of Directors by special resolution:
The Company may, by special resolution,
remove any Director before the expiration
of their period of oce.
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 oce;
v. in the case of a Director who holds any
Executive oce, 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 eect.
For further details of our Directors, please refer
to pages 44 and 45.
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
nancial statements or are important
in the understanding of the Company’s
current position.
Research and development
Innovation, specically 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 Ocers’ liability for
itself and its subsidiaries. The Company also
indemnies 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.
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Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Directors’ report
continued
External branches
The Group has no external branches established
as at 31 March 2026.
Independent Auditor
The Company’s Auditor, KPMG LLP, has
indicated its willingness to continue its 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 conrmed 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 conrmation 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 to the right.
Reporting requirement Location
Annual General Meeting Corporate Governance report on page 48
Strategic Report – Companies Act 2006 s.414A-D Strategic report on pages 03 to 40
Likely future developments of the business and Group Strategic report on pages 03 to 40
DTR4.1.8R – management report – the Directors’ Report and Strategic Report
comprise the “management report”
This Directors’ report and the Strategic report on pages 03 to 40
Directors’ remuneration including disclosures required by the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
Directors’ Remuneration Report on pages 56 to 67
Statement on corporate governance Corporate Governance Report, Audit Committee Report, Nomination
Committee Report and Directors’ Remuneration Report on pages 46 to 67
Board’s assessment of the Group’s internal control systems Corporate Governance Report from pages 46 to 48 and the Audit Committee
Report on pages 52 to 55
Board of Directors Pages 44 to 45
Community Sustainability report on page 21
Business relationships with suppliers, customers and others Engagement with our Stakeholders on page 38
Directors’ interests Directors’ Remuneration Report from pages 56 to 67
Diversity policy Sustainability report on page 21 and the Nomination Committee Report on
page 49
Employee engagement Engagement with our Stakeholders on page 38
Employee involvement Sustainability report on page 21 and engagement with our Stakeholders on
page 38
Employees with disabilities Sustainability report on page 21
Going concern and viability statement Strategic Report page 40
Task force on climate-related nancial disclosures TCFD disclosures on pages 33 to 35
Greenhouse gas emissions and streamlined energy and carbon reporting Sustainability report on page 21
Details of use of nancial instruments and specic policies for managing
nancial risk
Note 3 to Group nancial statements
Signicant related-party agreements Note 33 to the consolidated nancial statements
Directors’ responsibility statement Directors’ responsibility statement on page 71
The Strategic report, comprising pages 03
to 40, and this Directors’ Report, have been
approved by the Board and are signed on its
behalf by:
Julie Finnemore
Legal Director and
Company Secretary
16 June 2026
71
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Statement of Directors’ responsibilities in respect of the Annual Report and the nancial statements
The Directors are responsible for preparing
the Annual Report and the Group and Parent
Company nancial statements in accordance
with applicable law and regulations.
Company law requires the Directors to
prepare Group and Parent Company nancial
statements for each nancial year. Under that
law they have elected to prepare the Group
nancial statements in accordance with UK-
adopted international accounting standards
and applicable law and have elected to prepare
the parent Company nancial statements in
accordance with UK accounting standards
and applicable law (UK Generally Accepted
Accounting Practice), including FRS 101 Reduced
Disclosure Framework.
Under company law, the Directors must not
approve the nancial statements unless they
are satised that they give a true and fair view
of the state of aairs of the Group and Parent
Company and of the Group’s prot or loss for
that period. In preparing each of the Group
and Parent Company nancial 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 nancial
statements only, prudent;
• for the Group nancial statements, state
whether they have been prepared in
accordance with UK-adopted international
accounting standards;
• for the Parent Company nancial statements,
state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained
in the Parent Company nancial 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 sucient
to show and explain the Parent Company’s
transactions and disclose with reasonable
accuracy, at any time, the nancial position
of the Parent Company, and enable them to
ensure that its nancial statements comply with
the Companies Act 2006. They are responsible
for such internal control as they determine
is necessary to enable the preparation of
nancial 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 nancial information included on the
Company’s website. Legislation in the UK
governing the preparation and dissemination of
nancial statements may dier from legislation
in other jurisdictions.
In accordance with Disclosure Guidance and
Transparency Rule (“DTR”) 4.1.16R, the nancial
statements will form part of the annual
nancial report prepared under DTR 4.1.17R and
4.1.18R. The Auditor’s report on these nancial
statements provides no assurance over whether
the annual nancial report has been prepared in
accordance with those requirements.
Responsibility statement of
the Directors in respect of the
Annual Financial Report
We conrm that to the best of our knowledge:
• the nancial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, nancial position
and prot 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
Founder and CEO
Mark Higgins
Group Chief Financial Ocer
and Chief Operating Ocer
16 June 2026
72
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
Our Financials
Independent Auditor’s Report 73
Consolidated income statement 81
Consolidated statement
of financial position 82
Consolidated statement
of changes in equity 84
Consolidated statement
of cash flows 85
Notes to the consolidated
financial statements 86
Company statement
of financial position 114
Company statement
of changes in equity 116
Notes to the Company
financial statements 117
Important information 122
Glossary 123
The strong conversion of profit into
cash has enabled disciplined capital
allocation including continued
investment in the business.”
Mark Higgins
Group Chief Financial Officer and Chief Operating Officer
Overview Strategic Report Our Governance Our Financials
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Annual Report and Accounts 2026
73
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 2026 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 2026 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 10 financial years ended 31 March 2026. 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
£3.2m (2025: £2.5m)
0.25% (2025: 0.22%) of Group total revenue
Key audit matters vs 2025
Recurring risks Product protection plans contract asset
Recoverability of parent Company’s
investment in subsidiaries
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.
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74
The risk Our response
Product protection plans
contract asset
(£99.3 million contract asset;
2025: £98.1 million)
Refer to
page 53
(Audit
Committee Report),
page 87
(Accounting Policy),
page 92
(Key sources of estimation
uncertainty) and
page 102
(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 the impact of price increases, 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 statements (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;
• Sensitivity analysis: we performed sensitivity analysis on judgemental assumptions
relating to future plan profitability and the life of plans and the impact of price increases,
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 (2025: acceptable).
Recoverability of parent
Company’s investment
in subsidiaries
(Investment in subsidiaries
£50 million, 2025: £50.1 million)
Refer to page 54
(Audit Committee Report)
Page 117 (Accounting Policy
and Financial Disclosures)
Low risk, high value:
The carrying value of the parent Company’s investment in subsidiaries represents 16.5%
(2025: 21%) 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 (2025: acceptable).
The prior year key audit matter relating to the valuation of intangible assets including goodwill from the musicMagpie acquisition has not been included in the current year as the transaction was
completed in the prior period and no longer represents one of the most significant risks in our current year audit.
In the prior year, impairment of Mobile CGU goodwill and other intangible assets was identified as a key audit matter due to the level of judgement involved in assessing recoverability. During that period,
the goodwill balance was fully impaired and, therefore, no goodwill remains at the current year end. In addition, the estimation uncertainty associated with the remaining intangible assets has reduced in
the current period and we have not assessed this as a risk of material misstatement in our current year audit.
Independent Auditor’s Report continued
to the members of AO World Plc
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75
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 £3.2 million (2025: £2.5 million),
determined with reference to a benchmark of Group total revenue of which it represents 0.25%
(2025: 0.22%).
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 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 £1.2m (2025: £0.8m),
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 0.4% (2025: 0.33%).
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% (2025: 75%) of materiality for the financial statements as
a whole, which equates to £2.4 million (2025: £1.87 million) for the Group and £0.9 million (2025: £0.6
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 £0.16 million (2025: £0.125 million), in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Overview of the scope of our audit
Group total revenue Group materiality
Group total revenue
£1,267m (2025: £1,138m)
Group materiality
£3.2m (2025: £2.5m)
£3.2m
Whole financial statements materiality
(2025: £2.5m)
£2.4m
Whole financial statements
performance materiality (2025: £1.87m)
£2.6m
Range of materiality at 7 components
(£0.6m-£3.2m) (2025: £0.55m to £2.5m)
£0.16m
Misstatements reported to the audit
committee (2025: £0.125m)
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.
Additionally, having considered qualitative and quantitative factors, we selected 4 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 £0.6 million to £3.2 million, having regard to the
mix of size and risk profile of the Group across the components.
Our audit procedures covered 99% 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 100% of Group total assets.
Independent Auditor’s Report continued
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Annual Report and Accounts 2026
76
3. Our application of materiality and an overview of the scope of
our audit continued
Overview of the scope of our audit continued
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. Consistent with prior periods, the most efficient and
effective approach for gaining appropriate audit evidence meant that we planned, and undertook,
a fully substantive approach in all areas 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.
Independent Auditor’s Report continued
to the members of AO World Plc
Our audit procedures covered the following percentage of Group revenue:
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:
Total profits and losses that made up
Group profit before tax
Group total assets
100% 95%
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Annual Report and Accounts 2026
77
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 of 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.
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 71 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 39 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.
Independent Auditor’s Report continued
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Overview Strategic Report Our Governance Our Financials
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Annual Report and Accounts 2026
78
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 journal entries with unusual characteristics compared to the
total journal population.
• Assessing whether the judgements made in making accounting estimates are indicative of
a potential bias including assessing the PPP contract asset estimates 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 other 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.
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.
Independent Auditor’s Report continued
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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 39 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 27 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.
We are also required to review the viability assessment, set out on page 39 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.
Independent Auditor’s Report continued
to the members of AO World Plc
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80
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 71, 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
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
16 June 2026
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Consolidated income statement
For the year ended 31 March 2026
Note
2026
£m
2025
£m
Revenue 5, 6 1,266.6 1,137.5
Cost of sales 6, 8 (950.5 ) (861.5 )
Gross profit 316.1 276.0
Administrative expenses – impairment of goodwill and intangible fixed assets 7 – (19.6 )
Other administrative expenses (266.7 ) (235.4 )
Total administrative expenses 7, 8 (266.7 ) (255.0 )
Other operating income 8 – 0.1
Operating profit 8 49.4 21.1
Finance income 11 6.6 4.8
Finance costs 12 (5.5 ) (5.3 )
Profit before tax 50.5 20.6
Tax charge 13 (14.6 ) (10.9 )
Profit after tax for the period from continuing operations 35.9 9.7
Result for the period from discontinued operations 34 – 0.8
Profit after tax for the year 35.9 10.5
Total comprehensive profit attributable to owners of the parent arising from:
Continuing operations 35.9 9.7
Discontinued operations – 0.8
Earnings per share from continuing operations (pence)
Basic earnings per share 15 6.36 1.70
Diluted earnings per share 15 6.11 1.63
Earnings per share from continuing and discontinued operations (pence)
Basic earnings per share 15 6.36 1.83
Diluted earnings per share 15 6.11 1.76
The Group has no items of other comprehensive income for the period ended 31 March 2026 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.
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Consolidated statement of financial position
As at 31 March 2026
Note
2026
£m
2025
£m
(Restated
See Note 3)
Non-current assets
Goodwill 16 25.5 25.5
Other intangible assets 17 11.4 13.2
Property, plant and equipment 18 39.5 27.1
Right of use assets 18 42.4 51.6
Trade and other receivables 22 92.2 88.5
Deferred tax 20 – 2.2
Current assets
Inventories 21 87.4 88.5
Trade and other receivables 22 105.5 102.5
Corporation tax receivable 0.2 –
Cash and cash equivalents 24 81.3 27.4
Total assets 485.4 426.5
Current liabilities
Trade and other payables 23 (232.5 ) (207.7 )
Borrowings 25 (0.2 ) (0.2 )
Lease liabilities 26 (16.7 ) (18.5 )
Corporation tax payable – (0.6 )
Provisions 27 (1.4 ) (0.5 )
(250.9 ) (227.5 )
Net current assets/ (liabilities) 23.5 (9.1 )
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Note
2026
£m
2025
£m
(Restated
See Note 3)
Non-current liabilities
Trade and other payables 23 (5.7 ) (5.2 )
Borrowings 25 (1.5 ) (1.7 )
Lease liabilities 26 (46.4 ) (42.9 )
Deferred tax liability 20 (1.3 ) –
Provisions 27 (4.1 ) (4.7 )
(59.0 ) (54.5 )
Total liabilities (309.9 ) (282.0 )
Net assets 175.5 144.5
Equity attributable to owners of the parent
Share capital 28 1.4 1.5
Share premium account 28 108.5 108.5
Investment in own shares 28 (11.0 ) (10.9 )
Other reserves 29 72.0 68.2
Retained earnings/ (losses) 4.6 (22.8 )
Total equity 175.5 144.5
The financial statements of AO World Plc, registered number 05525751, on pages 81 to 113 were approved by the Board of Directors and authorised for issue on 16 June 2026. They were signed on its
behalf by:
John Roberts Mark Higgins
Founder and CEO Group Chief Financial Officer
and Chief Operating Officer
AO World Plc AO World Plc
Consolidated statement of financial position continued
As at 31 March 2026
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Consolidated statement of changes in equity
As at 31 March 2026
Share
capital
£m
Investment
in own
shares
£m
Share
premium
account
£m
Other reserves
Retained
(losses)/
earnings
£m
Total
£m
Merger
reserve
£m
Capital
redemption
reserve
£m
Share-based
payments
reserve
£m
Translation
reserve
£m
Other
reserve
£m
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
Profit for the period – – – – – – – – 35.9 35.9
Share-based payment charge (net of tax) – – – – – 7.6 – – – 7.6
Purchase of shares by EBT (see Note 28) – (4.2 ) – – – – – – – (4.2 )
Share options exercised – 4.0 – – – – – – (2.2 ) 1.8
Purchase of own shares by entity – – – – – – – – (10.1 ) (10.1 )
Cancellation of shares (0.1 ) – – – 0.1 – – – – –
Movement between reserves – – – – – (3.9 ) – – 3.9 –
Balance at 31 March 2026 1.4 (11.0 ) 108.5 59.2 0.5 28.0 (9.4 ) (6.3 ) 4.6 175.5
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Note
2026
£m
2025
£m
Cash flows from operating activities
Cash generated from continuing operations 24 107.8 66.1
Taxation paid (12.1 ) (9.3 )
Net cash flows from operating activities – continuing operations 95.7 56.8
Net cash generated from operating activities in discontinued operations 34 – 1.2
Cash generated from operating activities 95.7 58.0
Cash flows from investing activities
Interest received 2.1 1.0
Proceeds from sale of property, plant and equipment – 0.1
Acquisition of property, plant and equipment (5.2 ) (8.8 )
Acquisition of intangible assets (0.8 ) (0.1 )
Acquisition of subsidiary (net of cash acquired) – (5.7 )
Cash used in investing activities (3.9 ) (13.5 )
Cash flows from financing activities
Purchase of shares by EBT (including transaction costs) 28 (4.2 ) (11.1 )
Employee contributions on the exercise of share options 28 1.8 0.1
Purchase of own shares by entity (10.1 ) –
Repayment of borrowings 24 (0.2 ) (19.4 )
Interest paid on lease liabilities (3.6 ) (3.4 )
Repayment of lease liabilities (20.2 ) (21.2 )
Other interest paid including interest on borrowings (1.3 ) (2.3 )
Net cash used in financing activities by discontinued operations 34 – (0.1 )
Net cash used in financing activities (37.9 ) (57.2 )
Net increase/ (decrease) in cash 53.9 (12.7 )
Cash and cash equivalents at beginning of year 27.4 40.1
Cash and cash equivalents at end of year 24 81.3 27.4
Consolidated statement of cash flows
For the year ended 31 March 2026
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Notes to the consolidated financial statements
For the year ended 31 March 2026
2. Adoption of new and revised standards
The accounting policies set out in Note 3 have been applied in preparing these financial statements.
The Group has considered the following standards, interpretations and amendments, issued
by the International Accounting Standards Board (“IASB”) that are effective for the Group
for the period ended 31 March 2026 and concluded that they are not relevant to the Group’s
Financial Statements:
• Amendments to IAS 21, Lack of exchangeability
3. Significant accounting policies
Restatement of comparatives
In accordance with IFRS 3 Business Combinations, adjustments to the fair value assessment of
assets and liabilities acquired on the acquisition of musicMagpie plc in the prior year, during the 12
month measurement period, have been applied retrospectively, and the comparative information
has been restated.
As a result, goodwill recognised on this acquisition in the prior year has been reduced from
£12.1m to £12.0m reducing the total Goodwill disclosed on the face of the balance sheet from
£25.6m (previously reported as at 31 March 2025) to £25.5m (restated as at 31 March 2025) with
a corresponding reduction of £0.1m in the previously reported Corporation tax payable as at 31
March 2025 to £0.6m (restated as at 31 March 2025). Further details are included in Note 35.
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3. Significant accounting policies continued
Going concern continued
B2C Retail revenue
B2C Retail revenue relates to products and services purchased by B2C customers through the
retail websites (including membership fees, revenue attributable to protection plans sold with the
products and profit share received from our finance provider, NewDay). All revenue is recognised
when performance obligations are met, which are typically at the point of delivery with the
exception of membership fees (which are recognised over the membership period), some product
protection plans (that are sometimes sold after the product has been delivered) and profit
share from NewDay (which is based on expected lifetime performance of the finance book and
recognised in line with the proportion of the obligation satisfied at each reporting date, with any
variable consideration constrained as appropriate).
Commission receivable for sales of product protection plans for which the Group acts as an agent
(on the basis that the plan is a contract between the customer and Domestic & General, and the
Group has no ongoing obligations following the sale of such plans) is included within revenue based
on the estimated future commissions receivable over the estimated life of the product protection
plan. Revenue is recognised on the basis that the Group has fulfilled its obligations to the customer
at the point of sale. Further details of the specific methodology for recognising revenue are
included in Note 4 and Note 22.
B2B Retail revenue
B2B Retail revenue relates to products and services purchased by B2B customers and includes
funding for marketing services provided to suppliers. All revenue is recorded once performance
obligations are met such as at the point of delivery or on finalisation of marketing and promotional
campaigns, and most customers pay on credit terms.
In relation to strategic marketing services provided to customers, investment funding is recognised
in one of two ways:
• in advertising costs or cost of sales to offset directly attributable costs incurred by the Group on
behalf of the suppliers; and
• in revenue when it represents distinct marketing services provided to suppliers.
Notes to the consolidated financial statements
continued
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3. Significant accounting policies continued
Revenue recognition continued
Recommerce revenue
Recommerce revenue relates to second hand and refurbished products and related services
including revenue from rental assets. Revenue is recognised when performance obligations are met
which is typically on delivery (for outright sales), with customers generally paying upfront and over
the rental term for rental contracts.
The contracts for the rental of devices are classified as operating leases in accordance with IFRS
16 “Leases”. The Group recognises lease payments received under operating leases as income on
a straight line basis over the lease term.
Third-party logistics revenue
Third-party logistics revenue relates to the provision of third-party logistics services to a number of
customers. Revenue is recognised when performance obligations are met, being on completion of
the delivery or service with customers paying on credit terms.
Recycling revenue
Recycling revenue relates to revenue from the recycling of used electrical products. Revenue is
recognised when performance obligations are met which is typically on delivery, with customers
paying on credit terms.
Volume and marketing-related expenditure
At the year end, the Group recognises supplier income receivable from agreements for volume
rebates. These are largely agreed in the month after recognition and where estimates are required,
these are calculated based on historical data, adjusted for expected changes in future purchases
from suppliers, and reviewed in line with current supplier contracts.
Commercial income can be recognised as volume rebates, which are recognised in the income
statement as a reduction in cost of sales or as strategic marketing investment funding, as outlined
in the B2B revenue recognition policy above.
Employee benefit trust
The Group operates an employee benefit trust (“EBT”). Own shares held by the EBT are treated
as Treasury shares on consolidation and are shown as a reduction in equity in the statement of
financial position.
Notes to the consolidated financial statements
continued
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3. Significant accounting policies continued
Finance income and costs continued
Notes to the consolidated financial statements
continued
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3. Significant accounting policies continued
Property, plant and equipment continued
Subsequent measurement
The Group applies IAS 36 to determine whether a right of use asset is impaired and accounts for
any identified impairment loss. The lease liability is measured at amortised cost under the effective
interest method. It is remeasured when there is a change in future lease payments arising from a
change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be
payable under a residual value guarantee or if the Group changes its assessment of whether it will
exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right of use asset, or recorded in profit or loss if the carrying amount of
the right of use asset has been reduced to nil.
AO World Plc as lessor
Where the Group is an intermediate lessor, it accounts for its interests in the head lease and the
sublease separately. It assesses the lease classification of a sublease with reference to the right of
use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a
short-term lease, then it classifies the sublease as an operating lease. The Group recognises lease
payments received under property operating leases as income on a straight-line basis over the
lease term as other operating income. The Group has classified cash flows from operating leases
as operating activities.
Notes to the consolidated financial statements
continued
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3. Significant accounting policies continued
Impairment of assets continued
Notes to the consolidated financial statements
continued
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3. Significant accounting policies continued
Adjusted Profit Before Tax
Adjusted Profit Before Tax (“PBT”) is calculated by adding back or deducting Adjusting items to
Profit Before Tax. Adjusting items are those items that 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.
There are no Adjusting items in the current year.
The Adjusting items in the prior year related to the following:
• on 12 December 2024, the Group acquired the whole of the issued and to be issued share capital
of musicMagpie plc (“MM”). Costs, relating to advisor fees, incurred during the period in relation to
this transaction totalled £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 were treated as Adjusting items and were added
back in arriving at Adjusted PBT.
Notes to the consolidated financial statements
continued
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4. Key sources of estimation uncertainty continued
Revenue recognition and recoverability of income from
product protection plans continued
Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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99
18. Property, plant and equipment continued
Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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101
19. Subsidiaries continued
Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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22. Trade and other receivables continued
Product protection plans continued
Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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105
24. Notes to the cash flow statement continued
Notes to the consolidated financial statements
continued
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24. Notes to the cash flow statement continued
c) Changes in liabilities from financing activities continued
Notes to the consolidated financial statements
continued
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26. Lease liabilities continued
Notes to the consolidated financial statements
continued
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28. Share capital, investment in own shares
and share premium continued
Notes to the consolidated financial statements
continued
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30. Share-based payments continued
Notes to the consolidated financial statements
continued
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Notes to the consolidated financial statements
continued
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32. Financial instruments continued
Notes to the consolidated financial statements
continued
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32. Financial instruments continued
c) Liquidity risk continued
Financial risk management continued
Notes to the consolidated financial statements
continued
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113
33. Related-party transactions continued
35. Acquisition of subsidiaries and measurement
period adjustments
On 12 December 2024, the Group acquired all the ordinary shares in musicMagpie plc.
During the current financial year, the Group finalised the fair value assessment of assets and
liabilities acquired on the acquisition. This resulted in a measurement period adjustment of £0.1m,
arising from additional information obtained in relation to facts and circumstances that existed at
the acquisition date.
In accordance with IFRS 3 “Business Combinations”, the adjustment has been applied
retrospectively, and the comparative information has been restated.
As a result, goodwill recognised in the prior year has been reduced from £12.1m to £12.0m
and the reported corporation tax payable as at 31 March 2025 has reduced by £0.1m to £0.6m.
The adjustment had no impact on profit for the prior year.
Notes to the consolidated financial statements
continued
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Note
2026
£m
2025
£m
Non-current assets
Intangible assets 4 0.6 –
Property, plant and equipment 5 1.0 1.3
Right of use assets 5 0.8 1.9
Investment in subsidiaries 3 50.0 50.1
Trade and other receivables 7 245.3 179.3
Deferred tax asset 6 1.8 1.6
299.5 234.2
Current assets
Trade and other receivables 7 4.5 4.6
Cash at bank and in hand 0.3 0.2
4.8 4.8
Total assets 304.3 239.0
Current liabilities
Trade and other payables 8 (62.6) (69.4)
Lease liabilities 9 (1.3) (1.4)
Provisions 10 (0.6) (0.3)
(64.4) (71.1)
Net current liabilities (59.6) (66.3)
Non-current liabilities
Lease liabilities 9 (0.1) (1.6)
Provisions 10 – (0.7)
(0.1) (2.3)
Total liabilities (64.6) (73.4)
Net assets 239.7 165.6
Company statement of financial position
As at 31 March 2026
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115
Company statement of financial position continued
As at 31 March 2026
Note
2026
£m
2025
£m
Equity
Share capital 11 1.4 1.5
Share premium 11 108.5 108.5
Investment in own shares 11 (11.0) (10.9)
Merger reserve 11 59.2 59.2
Capital redemption reserve 0.5 0.5
Share-based payments reserve 27.9 24.1
Other reserves 0.4 0.4
Retained earnings/ (losses) 52.7 (17.7)
Total equity 239.7 165.6
AO World Plc reported a profit after tax for the year ended 31 March 2026 of £78.8m (2025: £123.0m) which includes dividends received from subsidiaries of £97.1m (2025: £149.8m).
The financial statements of AO World Plc, registered number 05525751, were approved by the Board of Directors and authorised for issue on 16 June 2026. They were signed on its behalf by:
John Roberts Mark Higgins
Founder and CEO Group Chief Financial Officer
and Chief Operating Officer
AO World Plc AO World Plc
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Company statement of changes in equity
As at 31 March 2026
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 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
Profit for the year – – – – – – – 78.8 78.8
Share-based payments charge (net of tax) – – – – – 7.7 – – 7.7
Purchase of shares by EBT (see Note 28) – (4.2) – – – – – – (4.2)
Share options exercised – 4.0 – – – – – (2.2) 1.8
Purchase of own shares by entity – – – – – – – (10.1) (10.1)
Cancellation of shares (0.1) – – – 0.1 – – – –
Movement between reserves – – – – – (3.9) – 3.9 –
Balance at 31 March 2026 1.4 (11.0) 108.5 59.2 0.5 27.9 0.4 52.7 239.7
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Notes to the Company financial statements
For the year ended 31 March 2026
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 the 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 and 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 relevant to balances in the Company accounts, please refer to the Group
accounting policies on page 86.
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
Investments
£m
Cost
At 31 March 2024 46.8
Additions 2.8
Group share-based payments 3.9
At 31 March 2025 and at 31 March 2026 53.5
Impairment
At 31 March 2024 0.6
Impairment 2.8
At 31 March 2025 3.4
Impairment 0.1
At 31 March 2026 3.5
Carrying amount
At 31 March 2026 50.0
At 31 March 2025 50.1
The Company has made capital contributions to its subsidiaries of £nil (2025: £3.9m) in relation to
the allocation of share-based payment charges.
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Annual Report and Accounts 2026
118
3. Investment in subsidiaries continued
As at 31 March 2026, 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% Non trading
Expert Logistics Ltd United Kingdom Ordinary 100%
Logistics and transport
AO Recycling Limited United Kingdom Ordinary 100% WEEE recycling
AO Ltd United Kingdom Ordinary 100% Holding company
Mobile Phones
Direct Limited
United Kingdom Ordinary 100% Dormant
Indirectly owned through AO Limited.
A full list of the Company’s subsidiaries is included in Note 19 of the consolidated financial statements.
4. Intangible assets
Domain
names
£m
Software
£m
Total
£m
Cost
At 31 March 2025 0.7 3.4 4.1
Additions – 0.6 0.6
Disposals – (3.4) (3.4)
At 31 March 2026 0.7 0.6 1.3
Amortisation
At 31 March 2025 0.7 3.4 4.1
Disposals – (3.4) (3.4)
At 31 March 2026 0.7 – 0.7
Carrying amount
At 31 March 2026 – 0.6 0.6
At 31 March 2025 – – –
Amortisation is charged to administrative expenses in the income statement.
Disposals in software relate to assets that have been fully amortised and are no longer in use.
Notes to the Company financial statements
continued
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119
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 2025 5.2 1.4 6.6 5.9
Additions 0.4 – 0.4 0.2
Disposals (0.9) – (0.9) (1.9)
At 31 March 2026 4.7 1.4 6.1 4.3
Accumulated depreciation
At 31 March 2025 4.4 0.9 5.3 4.0
Charge for the year 0.4 0.3 0.7 1.0
Disposals (0.9) – (0.9) (1.5)
At 31 March 2026 3.9 1.2 5.1 3.5
Carrying amount
At 31 March 2026 0.8 0.2 1.0 0.8
At 31 March 2025 0.8 0.5 1.3 1.9
The carrying value of right of use assets is analysed as follows:
Right of use assets
2026
£m
2025
£m
Land and buildings 0.3 1.2
Motor vehicles 0.5 0.7
IT equipment – 0.1
0.8 1.9
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
Transitional
relief
£m
Other timing
difference
£m
Total
£m
Deferred tax asset at 31 March 2024 1.2 0.1 0.1 1.4
Credit/ (Debit) to income statement 0.4 – (0.1) 0.3
Debit to reserves (0.1) – – (0.1)
Deferred tax asset at 31 March 2025 1.5 0.1 – 1.6
Credit to income statement 0.3 – – 0.3
Debit to reserves (0.1) – – (0.1)
Deferred tax asset at 31 March 2026 1.7 – – 1.8
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.
7. Trade and other receivables
2026
£m
2025
£m
Amounts owed by Group undertakings 245.7 179.3
Prepayments 3.4 3.5
Other receivables 0.7 1.2
249.8 183.9
The Trade and other receivables are classified as:
2026
£m
2025
£m
Non-current assets – Amounts owed by Group undertakings 245.3 179.3
Current assets 4.5 4.6
249.8 183.9
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.
Notes to the Company financial statements
continued
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Annual Report and Accounts 2026
120
Notes to the Company financial statements
continued
8. Trade and other payables
2026
£m
2025
£m
Trade payables 1.3 3.0
Accruals 7.9 8.4
Other payables 0.7 0.7
Amounts owed to Group undertakings 52.7 57.3
62.6 69.4
Amounts owed to Group undertakings are repayable on demand and carry no interest.
9. Lease liabilities
2026
£m
2025
£m
Lease liabilities 1.4 3.0
Amounts payable under lease liabilities
Within one year 1.3 1.4
Within one to two years 0.1 1.3
Within two to three years – 0.3
1.4 3.0
Movements in the year were as follows:
Leases
£m
At 1 April 2025 3.0
Changes from financing cash flows
Repayment of lease liabilities (1.6)
Payment of interest (0.2)
Total changes from financing cash flows (1.8)
Other changes
New lease liabilities 0.2
Reassessment of lease term (0.2)
Interest charge 0.2
Total other changes 0.2
At 31 March 2026 1.4
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Annual Report and Accounts 2026
121
10. Provisions
Provisions are classified as:
2026
£m
2025
£m
Current liabilities 0.6 0.3
Non-current liabilities – 0.7
0.6 1.0
The movement in the year is shown below:
Dilapidations
provision
£m
Restructuring
provision
£m
Total
£m
At 31 March 2025 0.7 0.3 1.0
Utilised in the year (0.1) (0.3) (0.4)
At 31 March 2026 0.6 – 0.6
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.
11. Share capital, share premium and reserves
Number of
shares
m
Share
capital
£m
Share
premium
£m
Investment
in own
shares
£m
Capital
redemption
reserve
£m
At 31 March 2025 580.3 1.5 108.5 (10.9) 0.5
Cancellation of shares (9.7) (0.1) – – 0.1
Purchase of shares by EBT
(including transaction costs) – – – (4.2) –
Transfer of shares upon
exercise of share options – – – 4.0 –
At 31 March 2026 570.6 1.4 108.5 (11.0) 0.5
On 17 September 2025, the Company commenced a share buyback programme with the
aggregate purchase price of ordinary shares being up to £10m (excluding expenses). The purpose
of the programme was to reduce the share capital of the Company and therefore any shares
purchased under the programme were subsequently cancelled. During the year, 9,748,994 shares
were purchased for £10.1m (including transaction costs).
During the period, the Company’s EBT purchased 4,399,472 of the Company’s ordinary shares
at market value. Consideration, including transactions costs, was £4.2m. Shares held by the EBT
are used to satisfy options under the Group’s share schemes. During the year 4.5m shares were
transferred to employees to satisfy share option exercises.
As at 31 March 2026, the number of shares held by the EBT was 11,039,469 (31 March 2025: 11,161,642).
The capital redemption reserve arose as a result of the redemption of ordinary shares and
preference shares in the year ended 31 March 2012 and 31 March 2014 respectively. The movement
in the current year relates to the redemption of ordinary shares as part of the share buyback
programme during the year.
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 (where shares in
the Company were issued to the vendors). 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 £3.8m (2025: £3.5m) in the year in relation to both the
AO Incentive Plan (referred to as “AOIP”), 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.
Notes to the Company financial statements
continued
Overview Strategic Report Our Governance Our Financials
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Annual Report and Accounts 2026
122
Important information
Registered office
AO
5A The Parklands
Lostock
Bolton
BL6 4SD
Registered number: 05525751
Tel: 01204 672 400
Web: ao-world.com
Legal Director and 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.
Overview Strategic Report Our Governance Our Financials
AO World Plc
Annual Report and Accounts 2026
123
Glossary
Adjusted PBT means Profit Before Tax, adjusted for any adjusting items as defined by the Board
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 2024
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
FY24, FY25
and FY26
mean the financial years of the Group ended 31 March 2024, 31 March 2025 and
31 March 2026
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
MVNO means Mobile Virtual Network Operator
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 Corporate
ao.com ao-world.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
Overview Strategic Report Our Governance Our Financials
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124
Notes
Printed by a Carbon Neutral Operation (certied: CarbonQuota) under the PAS2060 standard.
Printed on material from well-managed, FSC™ certied forests and other controlled sources.
This publication was printed by an FSC™ certied printer that holds an ISO 14001 certication.
100% of the inks used are HP Indigo ElectroInk which complies with RoHS legislation and meets
the chemical requirements of the Nordic Ecolabel (Nordic Swan) for printing companies, 95%
of press chemicals are recycled for further use and, on average 99% of any waste associated
with this production will be recycled and the remaining 1% used to generate energy.
The paper is Carbon Balanced with World Land Trust, an international conservation charity,
who oset carbon emissions through the purchase and preservation of high conservation
value land. Through protecting standing forests under threat of clearance, carbon is locked-in
that would otherwise be released.
CBP036429
AO World Plc
AO, 5A The Parklands
Lostock
Bolton
BL6 4SD
www.ao-world.com
Registered No. 05525751