London Daily

Focus on the big picture.
Thursday, Dec 26, 2024

Ocado's losses swell to $604 million

Ocado's losses swell to $604 million

Ocado Group (OCDO.L), the British online supermarket and technology group, plunged to a worse than expected full year loss as it took a big accounting charge and profits at its joint venture with Marks & Spencer (MKS.L) were wiped out.
Shares in the group were down 9% in morning trading Tuesday, extending losses over the last year to 59%.

Ocado made a pretax loss of 501 million pounds ($604 million) for the year to Nov. 27, 2022 - worse than analysts' average forecast for a loss of 399 million and a loss of 176.9 million in the previous year. Group revenue was broadly flat at 2.5 billion pounds.

Despite the wider loss, CEO Tim Steiner said he had more confidence in the Ocado model than ever before.

He highlighted "encouraging momentum" in the group's technology solutions division which sells automated warehouse technology to grocery partners around the world, such as Kroger (KR.N) in the United States, and has driven Ocado's 5 billion pound market capitalisation.

He noted the group opened 12 sites for partners in 2022, taking the total of live sites to 23, and said the pipeline for new partners was "strong".

Steiner also said Ocado was close to launching an automated fulfilment solution outside of the grocery sector.

One top 20 Ocado investor said the group was still well placed to benefit from the long-term structural shift towards automated processes for retailers.

But the naysayers remain.

Clive Black, analyst at Shore Capital and house broker to M&S, said the results were "truly dismal".

"One day in a distant time zone the Ocado Group may be surrounded by the words, meaningful sequential pre-tax profits ... but one cannot yet see the rainbow, never mind any pot of gold," he said.

Ocado Retail, the 50:50 joint venture between Ocado Group and M&S, made a loss of 4 million pounds, having made earnings of 150.4 million pounds the previous year.

Its revenue fell 3.8% as even its typically more affluent shoppers felt the squeeze from higher inflation and energy bills.

The group pretax loss also reflected a 349 million pounds charge for depreciation and amortisation.

At the core earnings level, Ocado made an EBITDA loss of 74 million pounds, worse than 66 million pound loss analysts had forecast.

For 2023, the group forecast "marginally positive" EBITDA for Ocado Retail, "positive" EBITDA for the technology solutions division and "stable" EBITDA in UK logistics.

Ocado ended the year with cash of 1.3 billion pounds.

"Our strong balance sheet gives us the means to finance our growth through the mid-term (4-6 years)," Steiner said.

($1 = 0.8272 pounds)
Newsletter

Related Articles

0:00
0:00
Close
Reform UK Declares Itself the 'Real Opposition' Amid Membership Surge
Pope Francis Opens Holy Door at Major Italian Prison
Britain’s ‘Wild West’ of Weight-Loss Jab Promotions Faces Growing Scrutiny
Pope Francis Urges Unprecedented Dialogue Amid Escalating Ukraine-Russia Tensions
Dozens Survive Kazakhstan Passenger Jet Crash Amid Tragedy
Kazakhstan Air Disaster: Dozens Survive as Authorities Probe Fatal Plane Crash
Postal Workers Demand Government Probe Into Royal Mail 'Fake Deliveries' Scandal
Explosion Sinks Russian Cargo Ship Ursa Major in Mediterranean
Mystery Shrouds U.S. Citizen Gene Spector's 15-Year Espionage Sentence in Moscow
Zelenskyy Alleges 3,000 North Korean Casualties in Russian Conflict
North Korea's Unseen Hand: Over 1,000 Troops Suffer Casualties in Ukraine
Discovery of 50,000-Year-Old Baby Mammoth in Siberia Fascinates Scientists
Magdeburg Attack Fuels AfD's Political Momentum Amid Rising Tensions
In Magdeburg, Germany, a man is arrested by the police for declaring, "I am a Christian."
UK News Roundup: London Shooting, Travel Disruptions, and Legal Battles
UK Economy Teeters on Recession's Edge Amid Revised Growth Figures
Australian Man Captured in Ukraine Conflict; Government Seeks Answers
Zelenskyy’s Push for NATO: A High-Stakes Gamble for Eastern European Stability
Slovak Pragmatism or EU Discord: Prime Minister Fico’s Polarizing Moscow Engagement
The Ripple Effects of a Russian Victory in Ukraine: A Global Tectonic Shift
U.S. Government Shutdown Averted by Last-Minute Agreement
Tragedy in Magdeburg: Saudi Doctor's Alleged Terror Attack at German Christmas Market Ignites Global Security Debate
Tragedy Strikes at Magdeburg Christmas Market: Terror Attack Leaves Five Dead
Texas Congresswoman Kay Granger Discovered in Nursing Home Following Six Months of Inaction
Prince William to End Feudal Land Restrictions in Duchy of Cornwall, but Controversies Remain
British police appear unprepared to deal with usual suspects
Russia's Ballistic Blitz on Kyiv Sends Shockwaves Through Global Stability
Multiple Tragedies and Tensions Mark Global Events: A Closer Look
Elon Musk's AfD Endorsement Ignites Controversy from neo-Nazis who accuse the AfD of being what they themselves are
Ukraine Claims Unprecedented Russian Losses: The Truth Behind Wartime Statistics
Federal Reserve Chair Powell: "We are prohibited from owning Bitcoin and are not seeking any changes to that law."
A Democratic congresswoman with blue and black hair is having a meltdown over "President Musk."
A sizable group of unauthorized migrants is traveling through Mexico with the aim of reaching the USA before Trump assumes office.
Beatles Reunion Electrifies London: Paul McCartney and Ringo Starr Ignite O2 Arena with Surprise Performance
Starmer's Envoy Engages Trump Team as UK Seeks Strategic U.S. Partnership
Britain's Retail Rebound Falters as Black Friday Splurge Dissipates
Bank of Japan's Bold Reckoning: A Decade of Unconventional Policy Under Scrutiny
Republican Discord Threatens Government Shutdown Amid Holiday Season
French Retiree Dominique Pellico Convicted for Recruiting 72 Men to Assault Wife Over a Decade
Putin Defends War Strategy as Global Tensions Rise
Putin Claims Progress as Tensions Rise: Conflict in Ukraine Intensifies
Putin's Paradox: Claiming Strength Amidst Sanctions and Isolation
Water as a Weapon: The Contentious Struggle for Survival in Gaza
Syria's Future: A Fight for Democracy or Another Cycle of Oppression?
UK Considers Sending Troops to Ukraine: A Strategic Move or Intensifying The Proxy War?
Renewed ISIS Threat Puts Syria’s Cultural Heritage in Peril
Escalation in Moscow: High-Profile Assassination and International Tensions Intensify
North Korean Troops in Ukraine: A New Cold War Frontier?
Ukraine's Bold Move: High-Stakes Assassination of Russian General in Moscow
Dubai's Technological Leap: Brain Chips and AI Board Members by 2025
×