Ocado makes profit in its first half as sales and EBITDA soar

The online grocer, which has never made a full-year profit, revealed revenue advanced 20.7% to £429.7m in the 24 weeks to May 18 and EBITDA surged 78% to £34.3m.

Ocado boss Tim Steiner said its performance was achieved by developing its offer along with “significant” progress of its operations.

He said: “Although price competition increased, led by the traditional supermarket retailers, significant progress in operating efficiency and the development of our product offer meant that EBITDA was up almost 80% in the period. This was achieved despite increased investment in Ocado’s strategic opportunities for the UK and overseas.”

Ocado has also revealed it has secured a third warehouse site, which will be located in Andover, Hampshire. It will open in 2015 at a cost of £30m for Ocado’s sole use. Ocado also plans to expand its existing  Dordon facility. It also operates a warehouse in Hatfield.

Ocado has put in place a new £100m unsecured three-year working capital facility to support its UK growth.

In the six-month period, Ocado revealed it recorded industry leading service levels for on time deliveries with 95.7% of orders on time, while order accuracy hit 99.2%.

Ocado increased its lines to 35,000 SKUS from 31,000 the same period last year. Steiner added that sales of its own-label range were up more than 50% in the period, while non-food sales grew 40% in the period.

The grocer said its pet website Fetch, which launched in May sells 8,000 lines, has been trading well and it plans to open a kitchen and homewares website Sizzle.co.uk with more than 12,000 lines in the second half of the year.

Ocado’s ‘low price promise’ helped improve its pricing positioning among its grocery competitors.

It also revealed active customers increased to 396,000 from 360,000 in the first half of 2013.

Since it launched on January 10, Ocado has been rolling out Morrisons’ online grocery service after they signed a deal together last year.

Steiner said: “The successful launch of Morrisons.com was particularly encouraging and paves the way for future agreements to commercialise the value of our intellectual property. We continue to invest to take advantage of partnership opportunities in the future as the demand for online grocery shopping increases internationally. Our IT projects to improve the platform and increase fulfilment capability are progressing well and position us to benefit from these future opportunities.

“We expect that our retail business will continue growing broadly in line with, or slightly ahead of, the online grocery market.”