LONDON - AO World's annual profit beat forecasts on Wednesday as the British online consumer electrical retailer's plan to focus on efficiency kicked in, and it said it expected it to grow by at least 6% this year despite the tough economy.

AO, which sells washing machines, fridge freezers, cookers, TVs, laptops and mobile phones across the UK, posted adjusted pretax profit of 34 million pounds ($43 million) for the 12 months to the end of March, compared to guidance for it to come in at the top end of a 28-33 million pound range.

For the current year, it forecast profit in the range of 36-41 million pounds, on revenue which would show growth in double digits.

The company, which has a 15% market share of the domestic appliance market in the UK, exited the German market in 2022 and has over the last year cut costs, removed lower value products from its range and introduced delivery charges as part of a plan to improve profitability.

AO said it was confident of further profit growth in the medium-term despite what it called "ongoing macro-economic challenges" following two years of high inflation.

Several British retailers reported that discretionary spending was under pressure earlier in 2024, however average wages are now rising faster than inflation and consumer sentiment has recovered to its highest since November 2021.

($1 = 0.7885 pounds)

(Reporting by Sarah Young; Editing by Kate Holton)