Ocado warns on profit following problems at fulfilment centre
Online grocer Ocado has announced that full-year profits will be below analysts expectations following capacity constraints at its Hatfield customer fulfilment centre.
Ocado said in a statement issued today that margins had been impacted by production issues as well as by the cost of employing additional labour at the centre as it worked to install further capacity.
The company said EBIDTA for the year ending 27 November was expected to be in the range of £27.5 million to £28.5 million compared to £22 million in 2010.
Gross sales were approximately £643 million for the full financial year, up 16.7% on the previous year.
The build for Ocado's second CFC in Warwickshire was on-time and on-budget, the company said. Furthermore, capital expenditure for the financial year was lower than expected, in the range of £125 million to £130 million, due to the timing of capital expenditure payments.
Chief executive Tim Steiner Tim Steiner, said he was disappointed that Ocado did not achieve as large or as early an increase in sales as had been originally planned.
"There is more work to be done and we are focused on delivering capacity and sales growth in the first half of 2012," he added.
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