Bolton based AO World has said it is “cautiously optimistic” as the online electricals retailer revealed that moves to slash costs have helped the firm’s profits surpass expectations.

Last year, the company based at Middlebrook closed its loss-making German business and launched actions designed to save at least £30 million a year by 2023-24, including axing a raft of senior and middle management jobs.

In November, the firm posted widened losses after it was hit by sliding sales and the impact of labour shortages and supply chain disruption.

The retailer told investors that sales slipped again over the latest quarter as it failed to keep up with pandemic-boosted levels.

The Bolton News: John RobertsJohn Roberts

AO said revenues dropped by 17.2 per cent over the three months to December 31, compared with the same period last year.

It said the sales slump was in line with the board’s expectations.

Meanwhile, it said it now expects to deliver adjusted earnings of between £30 million and £40 million as it benefits from reduced costs.

The company said it was on track to deliver earnings at the top of a £20 million to £30 million range in its previous trading update.

In a statement, the firm said: “The actions taken by the business to reduce costs and improve margins, as described in our interim results in November, are gaining traction and profitability is now running ahead of our previous expectations.

“We remain cautiously optimistic and yet mindful of the continuing macroeconomic uncertainty and tough consumer environment whilst also taking into account both the extent to which these and inflationary pressures can impact our contract assets.”

John Roberts who set up the online firm after a bet in a pub.

Mr Roberts founded the group in 2000 and still owns a 23 per cent shareholding has been focusing on innovation and development projects for the past two years, although he has remained on the board.

It was when he was in his mid-twenties Mr Roberts, then an appliance salesman, was having a beer with a friend in Bolton when he made a £1 wager saying he would set up his own kitchen business in Middlebrook.

Just 14 years later, he was a multi-millionaire after was floated on the London stock market.