Ocado posts widening loss as retail sales decline
Ocado has posted a pre-tax loss of £501 million for the year to 31 December 2022 after cost pressures and increased investments took their toll.
This compares to a loss of £176.9 million a year earlier.
Group revenue was broadly flat in the period at £2.5 billion due to strong growth in its solutions business offsetting a decline at Ocado Retail, its joint venture with Marks & Spencer.
Whereas international solutions revenue more than doubled to £148 million from £67 million a year earlier, Ocado retail sales fell by 3.8% to £2.2 billion following a fall in customer basket values.
Meanwhile the group recorded a group EBITDA loss of £74 million compared with a previous profit of £61 million due to cost pressures and capacity investments made to support growth at Ocado Retail.
Tim Steiner, chief executive of Ocado Group, said: “Ocado Retail, our UK JV with M&S, has shown its resilience against a backdrop of higher costs and smaller baskets, reflecting the Covid unwind and the UK cost of living crisis, by growing customer numbers and increasing online market share. As the Covid unwind fades and customer growth continues the business will start to recover the fixed costs of recent capacity commitments.”
Looking ahead to the outcome of the current financial year, Ocado Group is forecasting mid-single digit revenue growth for Ocado Retail with a marginally positive EBITDA.
Steiner added: “Our strong balance sheet gives us the means to finance our growth through the mid-term (4-6 years) by which time we expect Ocado Group to be cash flow positive with the cash flows from existing CFCs sufficient to finance future investments.”
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