AO World slips as chairman Richard Rose sells most of his stake

AO World's chairman has sold the majority of his stake just weeks after a profit warning that damaged investor confidence in the white goods retailer.

Shares in the online seller of fridges, washing machines and other big-ticket electricals fell 6 per cent to 180.2p on Monday on the news that Richard Rose had sold £10m worth of shares on Friday, or 89 per cent of his stake, at a price of 180p.

The sale follows last month's profit warning, which wiped a third off the company's value after pushing shares down almost 50 per cent at one point.

Mr Rose, who is also chairman of Quindell, the insurance claims company, now holds a 0.17 per cent stake. John Roberts, AO's chief executive, said that Mr Rose remained committed to the company as a shareholder and non-executive chairman.

"The share sale by Richard Rose follows the expiry of the post-IPO lock-up and will help to further increase liquidity and the number of shares in public hands," Mr Roberts said in a statement.

AO, whose £1.2bn stock market debut in February last year drew comparisons with the dotcom bubble of the late 1990s, has been under pressure to deliver on ambitious plans to expand into Europe and beyond the sale of fridges into other electrical goods.

Shares have traded below their 285p float price for much of its time as a public company and in February it warned that full-year profits would be 17 per cent lower than forecast by analysts.

The warning, which came a month after an upbeat third-quarter trading statement, raised questions about the company's ability to guide the market as analysts pointed to the Black Friday sales as the main cause of the company's woes.

At the January update the company had boasted of its handling of the "unprecedented demand" from the weekend of discounting in November.

When it later warned on profits, AO said that the event had simply "condensed sales into a shorter time period" instead of attracting new spending.

Nick Bubb, an independent retail analyst, said that he did not "blame the poor guy for bailing out" following the profit warning but added that it was "amazing that a non-exec had such a big shareholding in the first place".

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