UK: Ocado sales set to slow in Q2
Ocado's expects its sales to have slowed during its second quarter due to public holidays and capacity constraints, the UK online grocer said today (11 May).
The company said it expects sales to grow 21% for the half ended 15 May. In the first quarter of its financial year, Ocado reported a 24.7% rise in sales.
Ocado said it "continues to drive profitable growth", with EBITDA conversion on incremental sales increasing further. The company expects EBITDA conversion to reach approximately 12% for the first half, against 9.1% in the same period of the previous year.
Royal Bank of Scotland analyst Justin Scarborough described the results as a "tad disappointing" although he did concede that capacity at Ocado's Hatfield distribution centre is capacity constrained. Ocado has a second site at Dordon, Warwickshire, which is expected to be completed by the end of 2012.
The group added that it has entered a lease on a 100,000 square foot warehouse near its Hatfield site to develop its non-food business.
"Ocado continues to see strong demand and growth across all areas of the business," the retailer said. "The board is encouraged by the progress of the business so far this year."
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