Online UK grocer Ocado has reported higher annual losses despite growing sales ahead of the market and establishing a tie-up with supermarket group Morrisons.
The company said today (4 February) that pre-tax net losses for the year to 1 December widened to GBP12.5m (US$20.4m), up from GBP600,000 a year earlier.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
However, the company reported an improved operating result in the period. EBITDA rose 35.1% to GBP45.8m, when adjusted for the an extra trading week in 2011/2012. Adjusted revenue increased 18.8% during the period, climbing to GBP792.1m.
Ocado CEO Tim Steiner said the company had continued to benefit from the “unstoppable” movement of UK consumers to shopping online. “Today the momentum seems unstoppable and, as the market evolves, we are leading the way in delivering market-leading service, innovation, and technology to the benefit of our customers,” he said.
Steiner also emphasised could potentially represent a new growth avenue for Ocado through the GBP200m long-term contract to supply Morrisons’ online business with logistical support. “This development reflects the increasing demand for online grocery shopping in the UK and internationally, and a validation of the unique technology, IP and operating model pioneered by Ocado,” he said.
In a separate announcement, Ocado revealed co-founder and commercial director Jason Gissing would leave the firm following the annual general meeting in May.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataConlumino retail consultant George Scott suggested the departure of such a key figure represented both a challenge and opportunity for Ocado. Gissing’s exit “presents another challenge” for the group – “albeit perhaps also an opportunity for the business to start the new growth trajectory it needs”, Scott said.
Ocado shares were down 4.2% at 09:50 GMT, dropping to 501.5 pence.
The group’s stock performed strongly over the course of 2013, rising almost 410% in the 12-month period. Since the beginning of this year, Ocado’s share price has continued its ascent, rising 13.6% since 1 January.
