Ocado – profits down to £7.7m

Online grocers and technology firm Ocado saw revenues grow by 12.5% to £659.6 million but its pre-tax profits fell £1.7 million to £7.7 million in the half year to 28th of May.

Ocado have released a statement saying that the fall in profit was a result of higher depreciation from its Andover FC opening.

In addition the average Ocado.com basket size fell in value by 1.4% to £108.45, though order volumes grew by 15.6% to an average of 260,000 orders a week.

Apex Insight has reported recently that Ocado has recently announced it has reached an agreement to help a major European retailer builld an online grocery delivery operation. Ocado didn’t say who this was, and has remained quiet about who it might be in the half year report.

Commenting on the half-year results, Tim Steiner, Chief Executive Officer of Ocado, said: “I am pleased to announce another period of consistent customer, revenue and order growth, as well as improved operating efficiencies within our UK retail business. In addition, I am delighted to have announced our first OSP agreement with a European retailer.

“After several years of price deflation in the U.K., we have seen this begin to ease in the period and, when combined with our increasing scale and operational efficiencies, this trend will support the continued profitable growth of our retail business.

“As the channel shift to online advances we continue to gain share in a competitive U.K. market. We expect the trend for grocery shopping online to continue as consumers become more tech savvy and gain confidence in the online services available. Ocado will be a natural beneficiary of that trend thanks to its industry-leading customer offer. We continue to build new facilities in the U.K. in order to meet the increasing demand we see.

“Meanwhile, we have invested further in our platform and innovation to advance our technological leadership, as we continue to grow our technology and engineering teams. With the scaling of our Andover CFC and the store pick capabilities we have developed for Morrisons, we are able to better demonstrate the quality of our platform to current and future international customers.

“Grocery retailing is changing and we are ideally positioned to enable other retailers to achieve their online aspirations. We expect our recently announced international partnership to be the first of many and look forward to helping more retailers provide a high quality service to their customers in this rapidly evolving market.”  
Subscribe to Newsletter