Shares Ocado jumped by almost one-fifth in morning trade today (14 March) after the online grocer reported a bumper set of sales and confirmed it is in talks with Morrisons over a potential tie-up.
Shares in the retailer were up 18.16% at 11.15 am (GMT), climbing to 163.85 pence.
In a regulatory filing, Ocado said the talks with Morrisons may see the supermarket group paying for “certain… existing and future intellectual property and operating knowledge”. The group added that negotiations would not impact its relationship with Waitrose and were not looking at the possibility of Morrisons acquiring either the whole of, or an equity stake in, Ocado.
In a separate announcement this morning, Ocado said its gross sales had improved 14.4% to GBP185m during the twelve weeks to 24 February. The company said gains were driven by increased traffic and new customers, with the average weekly orders processed rising 12% to 130,995. Order size also contributed to gains, growing by 2% to GBP118.
“We maintained the momentum in sales growth and new customer acquisition with which we entered the year. Further improvements to the proposition to customers that we are making this year should enhance our appeal to shoppers and enable us to continue this momentum,” CEO Tim Steiner, said.
Click here for our on the money analysis of Ocado’s results.