UK: Ocado sales jump on new orders
Ocado sales gain
Online retailer Ocado has booked a 16.4% jump in gross sales, driven by an increase in the number of orders it receives.
The UK grocer revealed today (11 September) sales rose to GBP189.2m (US$299.2m) in the 12 weeks to 11 August. Average orders per week increased 15.3% while average basket size was up 1%.
"We are encouraged by the continuing momentum in sales growth, reflecting an increase in both orders and basket size. We remain focused on improving the proposition to customers to make it easier for consumers to shop at Ocado, from an ever wider range, and at competitive prices. This should support further growth as the demand for online grocery shopping continues," CEO Tim Steiner said.
The company also updated the market on a number of corporate developments. During the three months, Ocado completed its licensing deal with Morrisons for intellectual property rights on its operating system, as part of the UK grocer's move into online. Initial license fees were paid to Ocado during the quarter. Morrisons plans to launch its online platform in early 2014.
Ocado also finalised sale and leaseback arrangements with Morrisons for its Dordon Customer Fulfilment Centre, resulting in a payment of GBP138.3m in the period.
Ocado Group plc Interim Management Statement
Ocado Group plc ("Ocado") today announces its interim management statement for the 12 weeks to 11 August 2013.
12 weeks to 11 August 2013 12 weeks to 5 August 2012
Growth Gross sales1 £189.2m £162.6m 16.4%
Average orders per week 138,889 120,494 15.3%
Average order size £113.54 £112.44 1.0%
Gross sales compared to the 12 weeks to 12 August 2012 grew to £189.2m from £159.3m (+18.8%)
As at 11 August 2013 the Group had cash and cash equivalents of £114.6m and external borrowings2 of £49.1m.
Strategic and operational highlights
· Continued growth in orders and sales with range expanding to over 33,000 SKUs · Completion of our agreement with Morrisons to provide operational and intellectual property ("IP") services to launch their online business, with initial licence fees paid during the quarter · Sale and leaseback arrangements of Dordon Customer Fulfilment Centre ("CFC2") to Morrisons completed, resulting in payments of £138.3m under the arrangements and the full repayment of bank facility · The ramp up of CFC2 is progressing well, with commencement of phase 2 development to facilitate the Morrisons arrangements.
Tim Steiner, Chief Executive Officer of Ocado, said:
"We are encouraged by the continuing momentum in sales growth, reflecting an increase in both orders and basket size. We remain focused on improving the proposition to customers to make it easier for consumers to shop at Ocado, from an ever wider range, and at competitive prices. This should support further growth as the demand for online grocery shopping continues.
"During the period, we successfully completed our agreement with Morrisons. We now look forward to the launch of this business in early 2014, firmly endorsing our operating model and IP for online grocery services."
Original source: Ocado
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