Ocado EBITDA climbs as it seeks to accelerate growth

On a 52-week basis for a year-on-year comparison, Ocado made a £1m loss before tax including exceptional items, up 0.6% on last year. Revenue rose11% to £664m.

Ocado chief financial officer Duncan Tatton-Brown said Ocado ended the year with a “strong financial platform” and margins are improving after greater efficiencies were made.

Chief executive Tim Steiner said: “We continued to achieve double-digit sales growth during 2012 with increasing rates of sales and new customer momentum as we moved into 2013. This has been driven by further improvements to our core offer to customers – better value, wider ranges and enhanced service.”

Last month, Ocado revealed former Marks & Spencer boss Sir Stuart Rose will become chairman and help drive the business forward.

This year, Ocado plans to open a second distribution centre in Dordon, Warwickshire, to serve customers in the Midlands. That is in addition to the Hatfield warehouse, which Ocado expanded in the year. Tatton-brown said the Midlands warehouse, “will enable us to demonstrate the longer term benefits of our business model”.

Steiner said Ocado’s ability to grow faster will hinge on the new capacity.

He maintained: “Against a tough economic environment, we continue to see that shopping online for groceries is of increasing importance for consumers, evidenced by the online growth figures reported across the grocery industry.

“As more and more shoppers leave physical stores to shop for their weekly groceries from the comfort of their own homes, we have seen our competitors investing more into the online channel.

“We believe we are well positioned to benefit from this continuing growth in online demand with our market-leading offer to customers, and unconstrained by the concerns of cannibalisation of existing stores.”

Last year, Ocado extended its range by more than 40% to more than 28,000 products. Ocado added more branded lines as well as speciality products such as Swedish and Spanish food categories. Own-label sales were up over 70% year-on-year.

Ocado “significantly increased” its non-food range to more than 8,000 SKUs, particularly in home, health & beauty, baby and pet. The grocer plans to expand this range to 15,000 SKUs by the end of this year.

In addition, Ocado said active customers by the end of the year increased to 355,000 from 298,000, driven by Autumn initiatives such as stronger price messaging, after a weaker summer.