Shares in Ocado (OCDO) have grown by about two-thirds since its interim results last July, but these full-year figures expose the cost of the digital revolution currently gripping food retailers. Strip out exceptional costs and last year's wafer-thin £1.8m profit turned into a loss of £5.1m.
Despite the opening of a new state-of-the-art fulfilment centre last February, distribution costs rose 20 per cent. But, at least, they maintained their share of revenues at a quarter. Administration costs, including an expensive new bonus scheme for management, leapt 45 per cent to £69.6m - 8.8 per cent of revenues, up from 7.2 per cent the previous year.
That's despite strong top-line growth, with active customer numbers rising 8 per cent to 385,000 and orders per week up 16 per cent to 143,000. Unlike some of its peers who are suffering at the hands of prolific discounting, Ocado said price initiatives - including its 'low price promise' - were boosting sales. Last year's deal to operate Morrisons' e-commerce business came to fruition when the first Morrisons.com orders were delivered on 10 January, but had little impact on these results.
Broker Numis expects Ocado to swing into the black this year, with pre-tax profits of £17.5m and EPS of 2.9p.
| OCADO (OCDO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 502p | MARKET VALUE: | £2.9bn | |
| TOUCH: | 502-503p | 12-MONTH HIGH: | 560p | LOW: 102p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 35p | NET DEBT: | 25% | |
| Year to 3 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009* | 402 | -25.5 | -6.1 | nil |
| 2010* | 516 | -12.1 | -1.6 | nil |
| 2011* | 598 | -2.4 | -0.1 | nil |
| 2012** | 679 | -0.6 | -0.5 | nil |
| 2013 | 792 | -12.5 | -2.2 | nil |
| % change | +17 | - | - | - |
Ex-div: na Payment: na *Year to 27 Nov **53 weeks | ||||
