Online electricals retail giant AO has warned its future revenues are going to be cut further because of "volatile market conditions", inflation, supply chain challenges and the cost of living crisis.
The Bolton-headquartered company added it will focus on cash generation during its new financial year to "strengthen the balance sheet whilst optimising our cost base".
The news, revealed in a statement issued to the London Stock Exchange, saw AO's share price fall by more than 17% in early trading to 72p, its worst total since April 2020.
The group added its revenues for the 12 months to March 31, 2022, are expected to be £1.557bn, down 6% year-on-year.
UK revenues were down by 5% while sales in Germany were cut by 12%.
On its outlook, the company said: "In view of the volatile market conditions, inflationary cost pressures and logistical challenges in the supply chain, together with the escalating cost of living for consumers, we remain cautious about our revenue and profit outlook in the near term.
"In the coming year, we will focus on cash generation to strengthen the balance sheet whilst optimising our cost base to align with the expected lower levels of revenues.
"Despite the current market challenges, we remain confident in AO's long-term prospects given the inherent resilience of our business model, the quality of our customer proposition and the ongoing structural shift to online."
AO added that because of the "expected timetable" for its strategic review in Germany and the "resulting complexity" in the year end close process, its full year results to March 31, 2022, will be six to eight weeks later than planned.
On the review, AO said that competition in the German online market has remained intense, with digital marketing costs increasing significantly as a result, despite online penetration returning to pre-pandemic levels".
It said a number of options "remain under consideration" by the board.
The group also announced that founder and chief executive John Roberts is to sell a "small proportion" of his shares ever year.
AO said it is expected he will dispose of about £5m in shares during its new financial year, representing c.5% of his total holding of 107 million shares.
