- 2 February 2016
- Transport / Logistics Services
Amidst rumours of a possible takeover from Amazon, online grocer Ocado has reported only its second profitable year since it went into business in 2000. This was in part due to a tie up with Morrisons and also due to an increase in customers in its own right.
Ocado’s retail revenue grew to £1.1bn in 2015, a 14% growth in revenue year on year. Profits went up by 65% to £11.9 million. The company processed more than 195,000 orders a week on average last year, up from 167,000 in 2014.
Ocado’s Chief Executive Tim Steiner told journalists that the company was still holding a number of discussions with prospective international partners regarding licensing its technology, and that it expected to “to sign multiple deals in multiple territories in the medium term”. He refused however to discuss anything about the rumours of working with or being bought by Amazon.
The company provides Morrisons’ online shopping service, and this was “progressing well” after a full year of operation. Sales reached around £200 million and significantly helped it cross the £1bn revenue mark.
A number of commentators are tying Ocado with Amazon. If true, the grocery company would enable Amazon to compete directly with supermarkets across the UK as well as gaining the expertise to take on other supermarket chains around the world. As such, with profits low and steady Ocado could be a good move by Amazon, especially since its so-so financial results don’t make it a popular share on the dealing floors at the moment. However this would soon change should either giant or minnow go public about the deal.
Ocado was founded in 2000 but did not register a fully profitable year until 2014. For now, it has turned in two in a row. It could be an exciting year ahead of the company, depending on who gets involved and to what extent.