Ocado has reported a half year pre-tax loss of £142.8m, reflecting the impact of the fire that destroyed its Andover Customer Fulfilment Centre (CFC) in February.
The online grocer recorded a £99m hit as a result of the blaze, widening losses from the same period a year ago when it was in the red by £13.6m. Adjusted EBITDA for the 26 weeks to 2 June fell from £34.8m to £18.7m, with accounting changes and the cost of share schemes adding to the impact of the fire.
Group retail revenue grew 9.7% to £811.5m, with the effects of the Andover site being out of action estimated at 2% of sales.
Back in May, it was revealed that Morrisons had agreed to temporarily suspend its use of Ocado’s new CFC in Erith, South-East London, to give the online grocer extra capacity as it recovers from the fire.
As well as its own retail operation, the firm is growing its business by offering its expertise in developing highly automated grocery delivery systems to other retailers around the world. In the first half, fees from its technology partners increased 36% to £122.7m.
Ocado added that its Retail division continued to perform well, as work to form its new joint venture with M&S nears completion next month.
The group revealed that active customers were up 9.7% to 745,000 with order volumes averaging 318,000 per week compared to 288,000 during the same period last year. Meanwhile, average basket value was stable at £108.04 as the trend to smaller baskets as a result of ordering on mobiles was offset by price inflation.
Despite the disruption from the fire, Ocado today remained upbeat on its prospects with Chief Executive Tim Steiner saying: “In the last six months our centre of gravity has shifted.
“Our exciting new joint venture with M&S creates further growth opportunities for both parties in the UK and allows Ocado group to increase focus on growing our Ocado Solutions business and innovating for our partners…We have never had as many opportunities to grow as we do today.”
The upbeat outlook was cheered by the City, with Ocado’s shares surging 7% higher in early trading.
NAM Implications:
- Obviously the fire must have negatively impacted its expert-stance (Alleged difficulties in accessing warehouse space by fire authorities).
- …but all seems ok in terms of offering advice to retailers globally.
- i.e. anticipate that Ocado is nearly back to normal…
