- Ocado reports retail sales rise of 13.9% to £582.9m
- EBITDA up 5.7% to £40.4m
- Pre-tax profits up 18% to £8.5
- Ocado chief executive Tim Steiner “encouraged by the steady progress in our business”
Ocado’s has posted a rise in half-year profits as measures to improve operations paid off, despite a competitive market and “ongoing price deflation”.
Pre-tax profits jumped 18% to £8.5m in the 24 weeks to May 15. The etailer attributed this to broadening its range and hitting “market leading service levels”, including 95% of on-time deliveries.
Retail sales rose 13.9% to £582.9m, the online grocer reported.
Ocado chief executive Tim Steiner said the last few years have shown “beyond a doubt” that British shoppers are seeing the benefit of doing their grocery shopping online.
Last month, rival etailer Amazon brought its Fresh grocery proposition to the UK. Ocado maintained that it will benefit from the heightened competition brought about by the arrival of the US titan, as more consumers make the shift to online.
Today Steiner said: “We believe that the momentum of channel shift away from bricks-and-mortar stores will continue.”
He added: “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.”
Ocado has been testing new fulfilment and software solutions in Andover and expects to move out of its test phase this autumn.
Steiner said: “This and other innovations in technology that benefit our customers not only strengthen the Ocado retail brand but also make the Ocado Smart Platform an even more attractive solution for retailers outside the UK looking to build their own online grocery offer.
“I remain confident about signing up partners to this platform.”
Ocado.com has broadened its range to 48,000 SKUs, compared with 45,000 SKUs in 2015, and said that over 55% of orders are now checked out using a mobile device.
It has also increased its number of active customers by 14.9% to 541,000.
It added that its Morrisons tie-up was “operating well” and that it had agreed in principle terms for Morrisons to expand its capacity for online business.