Ocado posts full-year earnings fall as sales surge

Ocado posted a 27.2% EBITDA decline to £43.3m in the year to December 1, 2019, when group sales climbed 9.9% to £1.76bn. The retailer said that the earnings performance was “broadly in line with consensus” and was affected by accounting changes and share scheme costs as well as the warehouse blaze.

It has been a significant year for Ocado as its Solutions business struck more deals with overseas retailers keen to deploy its technology and as it prepares for its joint venture with Marks & Spencer to go live later in September.

Ocado reported that preparations for the launch with M&S and consequent end of its relationship ”are well under way”. Ocado said: ”The range review has been completed, confirming that we believe M&S has substitutes at the same price or lower, and of the same quality or better, for the majority of those currently supplied by Waitrose.

“Ocado Retail anticipates adding many more additional M&S lines to the range to give customers even greater choice than before.”

“We are pleased to report results which show strong momentum in the business. Although statutory results reflected a combination of factors, including the impact of the Andover fire, the underlying performance of Ocado Retail and the successful growth of Ocado Solutions were very encouraging.”

Ocado chief executive Tim Steiner said: “Our progress over the last 12 months, which includes signing our eighth and ninth Solutions clients, Coles in Australia and Aeon in Japan, and successfully maintaining strong growth post-Andover, has demonstrated many of Ocado Group’s most important characteristics: resilience, innovation, focus and execution.

“It is these qualities that will enable us to continue to develop the Ocado Smart Platform to meet the evolving needs of our partners at the cutting edge of online grocery retail.

“The first half of this year will see a new milestone for Ocado Group; the opening of the first customer fulfilment centres for our international partners.

“These state-of-the-art robotic facilities are a core part of an end-to-end solution embracing automated fulfilment, an intuitive and easy-to-use webshop and hyper-efficient last-mile delivery, which will enable Sobeys and Groupe Casino to deliver the same outstanding customer experience to consumers in Canada and France as Ocado Retail does today here in the UK.   

“The landscape of grocery retailing globally is changing. We are excited to be able to play a leadership role through Ocado Retail, our joint venture with M&S, and through our Solutions partnerships, as we fulfil our mission of ’changing the way the world shops’.”