10th Mar 2015 12:10
LONDON (Alliance News) - Ocado Group PLC Tuesday reported strong growth in sales for the first quarter of its financial year, driven by a large increase in average orders per week even though the average size of each order fell slightly.
The online grocery company, which has teamed with Wm Morrison Supermarkets PLC to be its online delivery company, also said it expects to continue growing slightly ahead of the overall online grocery market.
Gross sales in the 12 weeks to February 22 were GBP271.1 million, up from GBP227.5 million in the 12 weeks to February 23, 2014. Gross retail sales of all Ocado operations including Fetch.co.uk and Sizzle.co.uk grew 15.2% to GBP252 million, from GBP218.8 million.
Average orders per week rose to 183,000 from 155,000, an increase of 18.1%, while average order size fell by 2.4% to GBP114.72 from GBP117.53.
As at February 22, Ocado had cash and cash equivalents of GBP77.7 million and external borrowings of GBP44.7 million.
"Our business continued to grow, against a backdrop of a retail market that remains challenging and competitive. We remain committed to improving the quality of the proposition to customers, which we believe will support further growth," Ocado's Chief Executive Tim Steiner said in a statement.
"Notwithstanding the uncertainty that remains in the marketplace, we expect to continue growing slightly ahead of the online grocery market," he added.
Ocado Chief Financial Officer Duncan Tatton-Brown told journalists he doesn't expect Morrisons' new Chief Executive, David Potts, to seek a re-negotiation of the contract between the companies.
"Morrisons have been very pleased with the operations and the scale of business that they've built up," adding that the grocer is "pretty happy" with the contract, he said.
Tatton-Brown added that Ocado is confident of its future with Morrisons and that the number of British customers shopping for groceries online is continuing to grow.
Last month, Morrisons appointed former Tesco PLC executive Potts as its new CEO, meaning the struggling grocer's entire top team is now made up of former Tesco executives. Potts is joining Chairman Andrew Higginson, Tesco's former chief financial officer, and Chief Financial Officer Trevor Strain, former Tesco UK property finance chief, at Morrisons.
He has a tough job ahead of him as Morrisons tries to stem the loss of customers to discounters Aldi and Lidl, and catch up with Tesco and J Sainsbury PLC in the convenience store and online grocery business.
Ocado's shares were up 0.97% at 374.90 pence on Tuesday.
By Karolina Kaminska; [email protected]
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