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Ocado said today that trade in its third quarter was disrupted by celebrations to mark Queen’s Diamond Jubilee as it posted a 4.5% rise in underlying first half earnings. "The third quarter is particularly hard to forecast as we have already seen some disruption from the Jubilee events, and there is uncertainty as to the effect of the forthcoming Olympic Games, but we expect sales growth to increase in the second half of 2012 overall," said chief executive.
EBITDA at the online grocer came in at £14.9m in the 24 weeks to 13 May, in line with analysts' forecasts, and up from £14.3m last year. Ocado's sales rose 12.0% to £332.3m, with growth accelerating in its second quarter, raising hopes it has got to grips with bottlenecks at its distribution centre at Hatfield, north of London, that led to a string of profit downgrades last year. Statutory pre-tax profit was flat at £0.2m and the company ended the period with net debt of £71.3m.
Ocado plans to open a second distribution centre in Dordon, Warwickshire, early next year. It is also developing a warehouse dedicated to non-food items, such as toys and health products, as it expands its range to compete with bricks and mortar rivals such as Tesco and Waitrose. “We continue to put in place the building blocks to deliver further improvements in the rest of this year and future periods,” said Steiner.
However, the performance was not enough to prevent a 7% slide in the retailer’s share price to 100.3p in early London trading. Pressure on the retailer has intensified since the expiry of an exclusivity deal with Waitrose a year ago meaning it can now deliver to customers within the M25.
Ocado also today confirmed the appointment of Duncan Tatton-Brown as its new chief financial officer from 1 September. He succeeds Andrew Bracey, who quit to join recruitment company Michael Page in January. Tatton-Brown was most recently finance director of Fitness First, the health club group, and has also been finance director of Kingfisher, the DIY retailer.
Tatton-Brown said: "I am excited to be joining Ocado at this point in its growth. I look forward to working with the management team to help deliver strong returns on the significant investments made by Ocado in capability, new capacity and the offer to customers."
NamNews - Tuesday 26th June 2012
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