UK online domestic appliances retailer AO plans LSE listing

LONDON Fri Feb 7, 2014 3:24am EST

LONDON Feb 7 (Reuters) - AO, the British online retailer of major domestic appliances, plans to list its shares on the London Stock Exchange, joining a rush of recent retail flotations.

AO owner DRL Holdings Limited said on Friday it would be re-registered and renamed as AO PLC and expected to list in March.

The firm's share offer will comprise an offer of new shares to raise gross proceeds of approximately 60 million pounds ($98 million) and an offer of existing shares to be sold by the selling shareholders.

The selling shareholders will include some of the company's directors, senior management and private investors who have supported the growth of the group. Current free float expectations are of at least 25 percent of AO's share capital.

The Financial Times reported last month that AO was aiming for a 1 billion pounds valuation when it floats.

The listing of AO, whose rivals include Dixons Retail , the UK's No.1 electricals retailer, is one of many expected in the sector in 2014.

Russian hypermarket chain Lenta and newsagent and convenience store McColl's have both announced intentions to float in recent weeks, while British retailers Poundland, Pets at Home and House of Fraser are also expected to come to market later this year.

Led by Chief Executive John Roberts, its co-founder and largest shareholder with around a 40 percent stake, AO sells about 4,000 products from over 30 appliance brands, installs, removes and recycles old appliances.

In 2012 AO had a 24 percent share of the UK online market for major domestic appliances, of which 19 percent represented AO website sales, and 5 percent represented third-party branded website sales, according to an OC&C report commissioned by AO.

From the fiscal year ended March 31, 2011 to March 31, 2013 AO's revenue increased at a compound annual growth rate of 29.6 percent to 275.5 million pounds, while earnings before interest, tax, depreciation and amortisation (EBITDA) increased at a compound annual growth rate of 57 percent to 10.7 million.

"A London listing will give us the platform to continue to grow our business. Ultimately, it is our ambition to be a leading European online electrical retailer," said Roberts.

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