Electronics retailer AO World has increased its profit guidance after “clear progress” over the past year.

Shares in the London-listed company rose by more than a tenth in early trading on Thursday.

It is the latest upgrade after improving its profit outlook in November last year as its cost-cutting actions continue to bear fruit.

The retailer, which counts Mike Ashley’s Frasers Group as a major shareholder, has cut a number of jobs and closed its German business as part of its turnaround plan.

On Thursday, AO told shareholders it expects adjusted pre-tax profits “at least” at the top of its previous guidance, of between £28 million and £33 million for the year to March 31.

It added that it expects to report revenues of around £1.04 billion for the year, after its core business returned to growth in the final quarter.

Nevertheless, the company will still have seen revenues decline by around 8% for the year.

John Roberts, chief executive officer and founder of AO, said: “I’m pleased with the clear progress that we’re making after pivoting our focus to profit and cash generation during the 2023 financial year.

“As we expected at our half-year results, we returned to revenue growth in our core business during the fourth quarter and, as a result, we’re entering the new financial year with good momentum.

“With net funds on our balance sheet and a clear plan, we remain confident in our ability to deliver on our ambition for 10-20% revenue growth in the year ahead and medium-term profit guidance of 5% adjusted pre-tax profit margin.”

Jefferies analyst Andrew Wade said the update showed an “impressive turnaround” at the company.

Shares were up 12.4% at 101p on Thursday morning.