Ocado has revealed plans to raise hundreds of millions of pounds by launching bonds and extending its credit facility.

The online grocer is offering senior secured notes, while it will also amend its credit facility following the completion of the offering.

Ocado said the financing transactions are designed to “extend the maturity profile” of its debt and “diversify its sources of funding”.

The etailer said it would benefit from “historically low financing costs in the public debt markets to put in place longer maturity financing on attractive terms”.

Ocado said the cash raised from the move will help it grow its UK retail capacity and make “further improvements” to its proprietary platform.

Profit and sales growth

To support the potential financing transaction, Ocado revealed strong profit and sales growth for the 22 weeks to April 30.

Pre-tax profit during the period surged 45.7% to £6.7m, although that was in comparison to the shorter 20-week period ending April 17, 2016.

Its retail sales jumped 24.7% to £600.4m during the 22 weeks.

Despite its solid trading figures, Ocado’s share price suffered its worst day for nine months last Wednesday after a warehouse tour in Andover, showing off its Smart Platform to analysts and investors, had an adverse effect.

Analysts flagged that the customer fulfilment centre is currently running at just 10% capacity, despite opening last November, and suggested Ocado would need to cut prices and invest in marketing in order to reach scale.

Ocado is due to publish half-year results on July 5.