Ocado posts increased retail sales
Ocado increased its retail revenue to £811.5 in the six months to 2 June. This compares to £736.6 million in the corresponding period last year.
The online grocer grew its number of active customers by 9.7% to 745,000 although its average hypermarket basket value remained stable at £108.04.
Group EBITDA fell to £18.1 million from £34.3 million in the same period a year ago. This was due to the impact of the fire at the retailer’s Andover warehouse earlier this year which led to a 10% loss in capacity. The retailer was also affected by IFRS 15 delaying the recognition of fees from international solutions partners as revenue, and the cost of share schemes.
Ocado made a statutory pre-tax loss of £142.8 million compared to a loss of £13.6 million in the same period in the previous year. Profitability was affected by international investments to support future growth and the cost of Ocado’s new warehouse facility in Erith. It was also impacted by share-based management incentive charges, additional depreciation, and costs relating to the Andover fire.
During the period, its Ocado Solutions business embarked on a 50:50 joint venture with Marks & Spencer to enable the retailer to offer customers a grocery home delivery service. It also signed a deal to help Coles develop an online grocery business.
Fees invoiced from Ocado Solutions partners amounted £122.7 million to mark a 36% increase year-on-year.
Tim Steiner, chief executive of Ocado, said: “In the last six months the centre of gravity at Ocado Group has shifted. Our exciting new joint venture with M&S creates further growth opportunities for both parties in the UK and allows Ocado Group to increase focus on growing our Ocado Solutions business and innovating for our partners.
“At the same time we are beginning to apply our technology skills and expertise to other related activities which we expect to be of benefit to our solutions partners as well as to other Ocado Group stakeholders.”
Ocado said the retail revenue guidance for its second half remains unchanged although it expects to see further growth in underlying EBITDA for retail.
Looking ahead, Steiner said: “We have never had as many opportunities to grow as we do today. As we look to successfully scale our business and deliver outstanding execution to our partners, our challenge will be to select and prioritise the most attractive of these opportunities.”
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