Internet grocery retailer Ocado expects to become profitable next year after ploughing £350 million over eight years into the business.

Co-founder Jason Gissing told the Financial Times that the retailer became profitable before interest, tax, depreciation and amortisation this month.

He said pre-tax profitability was just one year away. Ocado is expected to make a pre-tax loss of£33 million in the year to December, on sales of about£320 million.

Gissing said: “We have proved we can do this. I can now sleep at night for the first time in eight years, because we are really doing this.”

Ocado – in which Waitrose parent the John Lewis Partnership has a stake – has faced tough competition from traditional grocers’ online offerings such as Tesco.com.

Gissing did not rule out an initial public offering as the retailer gears up to build a second automated warehouse in the north of England in 2009 or 2010. “Now we are EBITDA positive, we can float the business, we can raise money, all of these things that were hard to start off with become possible.”

Three former Goldman Sachs bankers founded the business – Jonathan Faiman, Tim Steiner and Gissing.