Amid concerns on the group’s future prospects following the recent launch of AmazonFresh, Ocado has posted relatively strong half year results.
During the 24 weeks ended 15 May, the online grocer’s pre-tax profits rose by 18% to £8.5m, while EBITDA increased by 5.7% to £40.4m. Revenues grew 15.1% to £584m, boosted in part by the group’s tie-up with Morrisons.
Ocado said it was continuing to gain share in the UK’s growing online grocery market. Order volumes grew by 17.8% to an average of 225,000 per week, whilst the number of active customers rose by 14.9% to 541,000.
Tim Steiner, Ocado Chief Executive, said: “I am encouraged by the steady progress in our business, with volumes through our operations, including the throughput for Morrisons, growing by 30%. The market remains competitive with ongoing price deflation but our increasing scale and operational efficiencies meant that we still grew profits, albeit at a slower rate.”
He added: “British shoppers are choosing the benefits of grocery shopping online and we believe that the momentum of channel shift away from bricks and mortar stores will continue.”
However, the group disappointed investors after failing to announce a highly anticipated international tie-up. Ocado said today: “Discussions with many potential international retailers to adopt the Ocado Smart Platform solution continue.”
Meanwhile, Steiner warned that Brexit could send supermarket prices higher as a result of the falling value of the pound. He said the weaker pound may lead to “inflationary pressure”, but added that he did not believe the UK’s planned exit from EU would spark a sudden crash in the retail market.