Ocado’s (OCDO) escalating losses did not deter the market from reacting positively to a 12.3 per cent rise in group revenue, which reflected a higher number of average orders per week and fees from new partnerships. Cash profits of £59.5m marginally beat consensus expectations, albeit down more than a fifth year on year as a result of costs associated with those new partnerships – specifically the building of new fulfilment centres and increased staff numbers. That said, analysts at Peel Hunt still expect cash profits of £81m for the year ending November 2019, representing growth of more than a third.
Chief executive Tim Steiner claims the group’s growth story is “only just beginning”. Over the past year, the company established new partnerships with Sobeys, ICA and Kroger to develop the ‘Ocado Smart Platform’ in Canada, Sweden and the US. Now, rumours are swirling that the online grocer could take high-street stalwart Marks and Spencer’s (MKS) food business online. The timing could indeed be fortuitous: Ocado’s long-standing contract with high-end supermarket Waitrose is due to expire in September next year.
| OCADO (OCDO) | ||||
| ORD PRICE: | 1,010p | MARKET VALUE: | £6.98bn | |
| TOUCH: | 1,009-1,010p | 12-MONTH HIGH: | 1,163p | LOW: 433p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 80p* | NET CASH: | £50.2m | |
| Year to 2 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 0.95 | 7.2 | 1.2 | nil |
| 2015 | 1.11 | 11.9 | 2.0 | nil |
| 2016 | 1.27 | 12.1 | 2.0 | nil |
| 2017 | 1.45 | -8.3 | -1.4 | nil |
| 2018 | 1.60 | -44.4 | -6.9 | nil |
| % change | +10 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £143m, or 21p a share | ||||
