By James Davey
LONDON (Reuters) -Ocado’s precedence is to generate money in its subsequent monetary 12 months, the high-spending British on-line grocery store and expertise group stated on Thursday, because it reported a 77% rise in first-half underlying earnings, sending its shares increased.
The group runs an internet grocery store via a three way partnership with Marks & Spencer, although its market worth is especially pushed by the sale of its cutting-edge robotic warehouse expertise to retailers world wide.
It stated its core precedence was to show cash-flow constructive throughout its 2025/26 12 months – which begins in December – by lowering prices, and to be full-year money constructive within the following 12 months.
Finance chief Stephen Daintith informed Reuters Ocado was “effectively heading in the right direction” to attain this, highlighting 93 million pound decrease money outflows in its first half to June 1 versus the earlier corresponding interval, a falling price base, and a 15% improve in income in the important thing expertise division.
Shares in Ocado have been up 13%, paring 2025 losses to 12% that mirror market nervousness on the tempo of recent web site openings for its grocery retail companions and a scarcity of recent expertise offers.
Ocado’s most vital accomplice, Kroger in america, has slowed its roll-out of automated warehouses, or buyer fulfilment centres (CFCs) as Ocado calls them, whereas final 12 months its Canadian accomplice Sobeys paused the opening of a fourth warehouse.
Final month, Ocado did, nonetheless, broaden its partnership with Spanish grocery store group Bon Preu.
Ocado has an additional eight CFCs because of go reside over the subsequent three years.
CEO Tim Steiner stated he anticipated to enroll new grocery shoppers as exclusivity phrases with present companions finish in a number of markets in direction of the top of this 12 months.
Bernstein analyst William Woods stated this “will not be useful to a number of the long-term relationships or could possibly be seen as an indication that the partnerships have deteriorated to some extent the place there may be little likelihood of enchancment”.
Ocado made first half adjusted earnings earlier than curiosity, tax, depreciation and amortisation (EBITDA) of 91.8 million kilos, up from 52.0 million. Income rose 13.2% to 674 million kilos.
It swung to a statutory first half-profit of 611.8 million kilos versus a lack of 153.3 million kilos a 12 months earlier, reflecting modifications to the way in which it accounts for its stake within the Ocado Retail three way partnership with M&S.
The group stated its expectations for the total 12 months have been unchanged.
($1 = 0.7468 kilos)
(Reporting by James Davey. Modifying by Paul Sandle, Mark Potter, Philippa Fletcher)
