18th Jul 2023 08:46
(Alliance News) - Ocado Group PLC on Tuesday affirmed yearly guidance with both its grocery and warehouse technology arms seeing half-year revenue growth.
Ocado shares jumped 12% to 650.41 pence each in London on Tuesday morning, the best FTSE 100 performer. The stock is up 5.4% year-to-date, and up some 76% since the end of May.
Revenue in the half-year ended May 28 increased 8.6% to GBP1.37 billion from GBP1.26 billion a year earlier. Ocado's pretax loss widened to GBP289.5 million from GBP211.3 million.
It reported GBP77.2 million worth of exceptional costs, up markedly from GBP7.0 million a year prior. Costs this year included GBP38.7 million worth from a UK network capacity review, and GBP17.4 million stemming from the fair value of contingent consideration receivable due from Marks & Spencer Group PLC for its 50% stake in the Ocado Retail joint-venture.
Ocado reported earnings before interest, taxation, depreciation, amortisation, impairment and exceptional items of GBP16.6 million, swinging from a loss of GBP13.6 million a year prior.
It was also a half-year which saw Ocado win new deals, Chief Executive Officer Tim Steiner said.
"Ocado Group has made good progress over the last six months. Technology Solutions has continued to deliver our industry-leading Ocado Smart Platform around the world and the opening of the first [customer fulfilment centre] for AEON, Japan's biggest food retailer, in Chiba City, just outside Tokyo, is a landmark for the grocery sector," the CEO said.
"It demonstrates that our proprietary [artificial intelligence] and robotics can be applied to businesses across the globe; Ocado Intelligent Automation is well placed to sign its first deals to provide our automation solutions outside of grocery; and we are pleased to report significant progress in our partner success programme, where our partners such as Kroger are seeing tangible improvements in their operational performance. The success of this programme is important to our plans to deliver stronger growth in orders for new capacity."
Hatfield-based Ocado said revenue in its UK-focused Ocado Logistics arm rose 1.7% on-year to GBP335.2 million. In Technology Solutions, where it provides the Ocado Smart Platform logistics service to grocery partners across the globe, revenue jumped 59% to GBP198.2 million.
Retail revenue alone was up 5.0% to GBP1.18 billion. Active customers were 11% higher on-year at 959,000. Average orders rose 4.0% and the average basket value climbed 1.5% to GBP121.22.
Ocado noted its retail arm returned to profit recently, as it was Ebitda positive in each of the months of the second-quarter.
Looking ahead, Ocado backed yearly guidance. It expects mid-single digit revenue growth in Ocado Retail and a "marginally positive" Ebitda at the unit.
In the second half alone, it cautioned that customer and order numbers for the retail segment will "reflect the tougher comparison with significant customer acquisition actions" delivered a year earlier. However, it expects volume-driven growth will pick-up again in the fourth-quarter.
Ocado's shares have been supported recently by a report that a takeover attempt could be on the cards. In June, the Times reported that there had been chatter that Amazon.com Inc was mulling an offer for Ocado.
By Eric Cunha, Alliance News news editor
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