Just a few short days on from the Brexit vote, it's fair to say that companies are rolling the dice by releasing results in such a febrile atmosphere. It seemed to work in Ocado's (OCDO) favour, though, as the shares rose by nearly 10 per cent on the back of a 14 per cent rise in interim gross sales to £583m and a 5.7 per cent increase in adjusted cash profits to £40.4m. Volumes also improved by 30 per cent and the number of active customers is on the rise too, but margins continue to be put under pressure thanks to ongoing deflationary trends in the grocery market.
There's still a major bugbear with Ocado, though. Once again the group failed to announce a new fulfilment deal, although as usual it claimed negotiations with "many international retailers". Another concern comes in the form of US behemoth Amazon (US:AMZ), which recently announced its intention to commence fresh food deliveries in the UK, thus posing a major threat to Ocado's existing market share. Worryingly, Wm Morrison (MRW) has announced a new supply agreement with Amazon sparking concerns over its existing contract with Ocado.
Analysts at Numis expect pre-tax profits of £9.5m for the year ending November 2016, giving EPS of 1.2p, compared with £11.9m and 2.0p in FY2015.
OCADO (OCDO) | ||||
---|---|---|---|---|
ORD PRICE: | 228p | MARKET VALUE: | £1.36bn | |
TOUCH: | 226-229p | 12-MONTH HIGH: | 479p | LOW: 203p |
DIVIDEND YIELD: | Nil | PE RATIO: | 103 | |
NET ASSET VALUE: | 43p* | NET DEBT: | 6% |
Half-year to 15 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2015 | 508 | 7.2 | 1.2 | nil |
2016 | 584 | 8.5 | 1.5 | nil |
% change | +15 | +18 | +18 | - |
Ex-div: na Payment: na *Includes intangible assets of £62.4m, or 10p a share |