Ocado to turn ‘cash flow positive’ in second half of the year

Group revenue was £1.4bn for the year, up by 12.1% on 2024, with revenue increases across technology solutions and Ocado Logistics. 

Group adjusted EBITDA hit £178m, with the bulk of that provided by its technology solutions business. Despite this, cash flow at the business tightened, dropping from £199m in 2024 to £213m, which the group attributed to higher financing costs. 

Despite this, Ocado said its increasing revenues and EBITDA gains, as well as big reductions in technology and support costs, meant it was likely to turn cash flow positive in the second half of this year, before a full-year of cash flow positivity in 2027. 

The retail technology firm faced a challenging situation last year as its US partner Kroger decided to scrap plans for a new automated warehouse, as well as shuttering three it operates. Ocado negotiated a one-off cash payment of $350m (£258m) in compensation from Kroger.

Last month, its Canadian partner Sobeys also decided to close a fulfilment centre in Calgary, which resulted in £18.5m compensation. 

”In North America, we have worked constructively with partners around their decisions to close underutilised sites and concentrate activity in locations delivering stronger operational and financial performance. These were difficult decisions, but they have strengthened the foundations and long-term outlook of those partnerships,” said Ocado Group chief executive Tim Steiner. 

“With exclusivity arrangements concluded in most markets, we have greater flexibility to pursue new partnerships and growth opportunities. We are well set to re-enter multiple markets with an evolved technology platform, designed to be more flexible, offering a wider range of solutions to help retailers to run more efficiently and deliver a better service for shoppers, in any market environment, at any stage in their online journey.”

Ocado currently has six fulfilment centres set to go live over the next two to three years. 

The group remains a 50% shareholder in Ocado Retail despite deconsolidating the business as part of its deal with joint-owner Marks & Spencer last year.

Ocado Retail revenue grew by 15% to hit £3.1bn during the year, with adjusted EBITDA growing by 88.1% on 2024. Operating losses fell from £48.5m to £27.5m.