Ocado posts first half loss despite increase in sales
Ocado saw its EBITDA rise by 28.7% in its first half although the online grocer made a pre-tax loss in the period after investing in new customer fulfilment centres.
In the 24 weeks to 19 May 2013, EBITDA rose to £19.2 million from £14.9 million a year earlier. Revenue jumped 15.6% to £355.9 million while gross sales rose by 15.2% to £382.7 million.
However, the company made a pre-tax loss of £3.8 million compared to a profit of £0.2 million in the same period a year earlier as costs relating to the opening customer fulfilment centres in Dordon and Welwyn Garden City took their toll.
Ocado recently announced a 25-year deal with Morrisons which will enable the supermarket to launch its first online grocery delivery service by January 2014. The proposed arrangements with Morrisons also include a 25-year sale and leaseback of the Dordon customer fulfilment centre with goods being to dispatched to Morrisons customers in Morrisons-liveried vans.
The company said the rate at which new customers were being added each week remained strong, up 52.7% year-on-year, with average orders per week increasing by 13.4% in the period to 139,000. Average baskets stood £114.90 by the period end compared to £113.10 at the same time last year.
Ocado chief executive Tim Steiner described the period as "extremely busy" and said: "We remain well placed to take advantage of the accelerating structural changes in the industry as more customers choose online delivery for their grocery shopping."
Of the long-term agreement with Morrisons, Steiner added: "The development reflects the growing shift we are seeing in favour of online grocery shopping in the UK and internationally, and a validation of the unique technology, IP and operating model pioneered by Ocado to exploit this growing channel. The positive financial impact of this agreement and the endorsement of our business model, positions us well for future strategic developments."
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