Bolton-based online electrical giant AO, sponsor of Manchester’s AO Arena, has sought to reassure customers and investors after its share price slumped by 18 per cent to a two-year low in Monday trading.
The fall in value followed a Sunday Times revelation that insurer Atradius had cut the retailer’s credit cover, and comes a month after AO announced that it would be closing its German operations in June.
AO Issued the following statement following the nosedive on Monday: “The company’s current financial performance and financial position remain in line with the board’s expectations and the guidance set out in its trading update on 29 April 2022. AO confirms that it is aware that one of the third-party credit insurers who provide credit insurance to some of its suppliers rebased their cover in May 2022 with respect to AO, reflecting post-Covid sales levels.
“This was a reduction from the heightened levels that had been in place and required through the period of the pandemic. To date this rebased cover has had no effect on AO’s liquidity position which remains in-line with the Board’s expectations for FY23.”
AO’s stock made a slight recovery following the issue of the statement, although as of lunchtime Tuesday the company’s stock is trading at 33% below its value five days ago.