It never helps the IPO market when a newly listed company issues a profits warning. Especially true when the major shareholder sells a large number of share in the post IPO period. It will be interesting to see how this impacts IPOs in the next few months.
AO World, the online electrical goods retailer that stunned the City last February when it floated in London with a valuation of about 72 times projected earnings, has reported an annual loss despite growing sales. Warning that retail market conditions in the UK remained “challenging”, AO World notched up a pre-tax loss of £2.8m for the year to March. Shares in the company fell 4 per cent in early trading to 169p. Bolton-based AO World, which joined the stock market with a £1.2bn valuation despite reporting profits of less than £8m, had warned in February that full-year profits would be almost a fifth lower than expected. Richard Rose, who led the company through its successful IPO, sold most of his stake in the business just weeks later