Shares in UK online grocery retailer Ocado soared after gross sales jumped 16% in the run up to Christmas.
The company today (12 January) released a trading update showing gross sales were up 16% at GBP59m (US$90.5m) and customer orders were up 21.8% in the four trading weeks to Christmas. Shares leapt 21% to 67p at 10.56am following the news.
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Gross sales hit GBP18.7m (US$28.7m) in the week before Christmas, up 23.8% from the same period in 2010.
For the fourth quarter to 27 November, gross sales increased 10.8% to GBP198.2m, while gross sales for the fiscal year increased 16.6% to GBP642.8m
Ocado CFO Andrew Bracey said: “This was encouraging trading for December as a whole and particularly the seven days to Christmas, with sales growth of 23.8%.
“This was accompanied by good operational performance throughout the trading period. In giving guidance for the quarter, we have taken account of likely customer behaviour against the backdrop of the prevailing economic conditions and forecasts; we remain optimistic about continued sales growth and believe Ocado will remain a strong performer in the sector.”
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By GlobalDataIn December, the company forecast full-year EBITDA would be between GBP27.5m and GBP28.5m, below market expectations. Analysts were divided over the company’s prospects, with some claiming that it would struggle as competitors gained market share, while others predicting it will capitalise on its position and the growth of the online channel.
Ocado has suffered a tumultous year, with shares plunging steadily from a high of GBP2.75 in February. On 12 January 2010, Ocado’s stock was valued at GBP1.90, meaning the value of its shares has dropped almost 65% in a year.
