The grocery market is a tough place to be these days, online and off. Ocado (OCDO) has found itself under the same deflationary pressures as traditional bricks-and-mortar supermarkets, but now faces further competition from the likes of US behemoth Amazon (US:AMZ), which recently launched a UK trial of its fresh food delivery service. The rumour mill went into overdrive in January with claims that Amazon was considering taking over Ocado, but those whispers have died down for now.
If nothing else emerges on that front, Ocado can be proud of hanging onto profitability during the 2015 financial year. Group sales continued to benefit from the Morrison (MRW) contract, which brought in £74m in revenue, up from £45m last year. Thanks to robust margins, most of this growth found its way to the profit line, too, with gross profit up 20 per cent to £375m.
There was no update on current trading, but chief executive Tim Steiner says the group should grow ahead of the market. Brokerage Numis expects pre-tax profit of £15.8m for the year ending November 2016, giving EPS of 1.97p, compared with £11.9m and 1.96p in FY2015.
| OCADO (OCDO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240.30p | MARKET VALUE: | £1.42bn | |
| TOUCH: | 240.10-240.60p | 12-MONTH HIGH: | 479p | LOW: 239p |
| DIVIDEND YIELD: | nil | PE RATIO: | 120 | |
| NET ASSET VALUE: | 41p* | NET DEBT: | 53% | |
| Year to 29 Nov | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 0.60 | -2.4 | -0.1 | nil |
| 2012 | 0.68 | -0.6 | -0.5 | nil |
| 2013 | 0.79 | -12.5 | -2.2 | nil |
| 2014 | 0.95 | 7.2 | 1.2 | nil |
| 2015 | 1.11 | 11.9 | 2.0 | nil |
| % change | +17 | +65 | +62 | - |
*Includes intangible assets of £52.9m, or 9p a share | ||||
