Strong 1H results AO World reported a 30% increase in 1H adjusted PBT to £17m. Total revenues were up 6% with B2C Retail business up 13%. Good gross margin progression, up 90bps to 24.4%, with efficiency savings more than offsetting inflation pressures and lower basket value in retail from lower market prices. Sales mix was not quite as expected, with the wetter weather resulting in fewer fridges and air conditioning units being sold over the summer. Good progress was seen beyond its core MDA and management continue to tightly manage the cost base. Its third party warehouse solution for small products went live in April, which should help improve unit economics and enable AO to offer a wider range. FY25 guidance range raised Management has raised FY25 adj. PBT guidance range to £39m to £44m, compared to its previous range of £36m to £41m (company-compiled consensus: £38.8m; INVe £43.2m). Group revenue is expected to be £1.09bn to £1.13bn with growth of over 10% in B2C Retail. The business is making good progress on its medium-term ambition for an adj. PBT margin of 5%, double-digit revenue growth and EPS growing faster than revenue. The Budget is expected to result in an additional £4m of direct costs from April, with the cost at c£8m if indirect costs are included. Forecast/TP put under review Our forecasts are yet to be updated for FY24 results, but our FY25E PBT forecast of £43.2m is within management’s new guidance range. Post period end, AO has agreed to acquire Music Magpie plc. The Court hearing for sanctioning the deal is scheduled for 10 December.