Ocado swings to first half loss after investing to support growth
Ocado has reported a first half loss of £9 million compared to pre-tax profit of £7.7 million in the same period in the previous year.
The online supermarket said profitability in the 26 weeks to 3 June was impacted by “significant” investments made in the period to support its growth plans.
Meanwhile, retail revenue rose by 11% to £736.6 million as group revenue climbed by 12.1% to £799.9 million. The increase was driven by an uplift in the average number of orders per week and fees earned from Ocado’s clients.
During the period Ocado signed international partnerships with Sobeys, ICA and Kroger in which it will supply them with its online shopping and delivery technology.
Tim Steiner, chief executive of Ocado, said: “This is a transformational period for Ocado. We have developed unique and proprietary technology to offer retailers an end-to-end operating solution for grocery retail that enables them to meet the changing needs of consumers. In the past six months we have partnered with some of the world’s, biggest, best and most innovative retailers to help them redefine the shopping experience for their own customers. As a result, we are beginning to fulfil our ambition to change the way the world shops.”
If economic conditions remain broadly stable, Ocado said it is confident that it will achieve revenue growth in its retail business of between 10-15% in the 2018 financial year as its increases its fulfilment capacity and grows its market share in the UK.
Steiner added: “In order to fully capitalise on the opportunities ahead of us, we are working at pace, investing more and focussing sharply on execution to bring on new capacity in the UK and to achieve successful outcomes for our partners. We are confident that we have the ability to scale-up the business, deliver on our commitments, drive sustainable growth and deliver value to all our stakeholders.”
