AO World chairman sells most of his shares in the online white goods retailer just weeks after it issued a profit warning 

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The chairman of online electrical appliances retailer AO World has sold the majority of his shares in firm just a month after it issued a profit warning.

AO World confirmed today that Richard Rose disposed of a 1.3 per cent stake in the firm, worth £10million last Friday, with the 5.58 million shares sold at 180p each. AO World shares this morning were down 12.8p to 178.8p.

Rose, who also chairs food wholesaler Booker Group, continues to hold 720,000 shares in the group valued at £1.5million, the company said.

Overhyped: AO cut its revenue growth target this year after it said publicity surrounding the company has now died down

Despite the disposal, AO World said Rose remains committed to the company. He was also previously chief executive of tea retail specialist Whittard of Chelsea.

John Roberts, AO's chief executive, said: '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. Richard remains committed to the company, both as a shareholder and as its chairman.'

Analysts, however, questioned the timing of the transaction, noting that the move was unlikely to calm investors nerves just weeks after the company cut its full years earnings outlook.

Nick Bubb, independent retail analyst, said: 'After the recent profit warning, you can't blame the poor guy for bailing out (a year on from the IPO), notwithstanding the usual PR spin that the sale "will help to further increase liquidity and the number of shares in public hands."'

The firm's debut last February stunned the City when it floated with an initial market capitalisation of £1.2billion, despite reporting profits of less than £8million in 2013.

But last month, the Bolton-based firm came down to earth after cutting its full year earnings outlook after admitting that some of its revenue growth last year was due to the extra publicity around the company on its flotation.

As a result, AO said it now expects revenue for the financial year ending March 31 to be slightly below market expectations, coming in around £470million to £475million, about 2 per cent lower than expected.

Other interests: Richard Rose was previously chief executive of tea retail specialist Whittard of Chelsea

The company also said it believes its UK full year earnings will be around £16.5million - compared with an earlier forecast of £18.6million - blaming strong 'Black Friday' sales which did not produce additional revenues but instead condensed them into a shorter period.

AO shares were floated at 285p on February 26 2014 and peaked at 412.4p on the same day before dropping back over teh following few months to hit a low of 154p in October.

After recoverying steadily from that bottom, the stock slumped by nearly a half after last month's profit warning, with the business valued at £814million at the close last Friday, just two thirds of its flotation valuation.  

AO was not the only company to lose its shine after floating last year. There were also disappointing market debuts for Pets at Home, Card Factory and over-50s specialist Saga – all of which have traded below their issue price for much of the time since floating. 

As a result, investors have shown more caution since the start of 2015 with DFS Furniture and tool rental firm HSS Hire seeing muted market debuts.