White goods retailer AO.com has announced its intention to float in March, after months of speculation.
The Bolton company will list on the London Stock Exchange’s main market and hopes to raise £60m in a process.
The firm, the trading name of DRL, has already experienced rapid growth, with sales rocketing from £50m to £275.5m over the past four years and staff numbers climbing to 800.
AO sells appliances like fridges, freezers, washing machines and dishwashers via its website and operates white label services for high street chains, including Tesco, Argos, B&Q, Next, Debenhams and House of Fraser.
It plans to use the proceeds of the flotation to support further growth, including expansion into Europe, and the move could see it valued as high as £1.2bn.
But how will investors respond to AO when it enters the market? James Igoe, of Wilmslow-based stockbrokers XCap Securities, said: “It will be probably be a successful float for AO.
“ I’m not sure they will be as competitive as they want to be against the likes of John Lewis, who they will be butting their heads against, so to speak.
“We are probably three-to-four years away from ordering everything online as consumers. I think we are still a culture that wants to speak to someone and get feedback before committing to large white goods purchases.”
AO’s underlying pre-tax profits in the year to March 31 were £10.7m. The firm has a 24 per cent share of the online market for domestic appliances in the UK.
In August, it announced plans to nearly double the size of its headquarters, at Parklands, Middlebrook, to a 50,000 sq ft space.
After a quiet few years, 2014 is set to see a number of flotations, with other north west firms understood to be planning listings includings Boohoo.com and Pets at Home.
Mr Igoe added: “It is going to be a massive year for flotations. The reason for that is demand in the market is there. There’s definitely more confidence and a fell good factor in the market now.”
Source: Manchester Evening News
