Ocado losses deepen as investment in tech offsets rise in grocery sales

Writer, Stock Market Wire
Tuesday, February 5, 2019 - 07:18

Online grocery retailer Ocado posted a £44.9m annual loss as continued investment in its technology platform more than offset a rise in sales.

The pre-tax loss for the year through December was deeper than a £9.8m loss posted a year earlier.

Sales rose 12% to £1.48bn.

Looking to 2019, the company said it expected its retail business to post annual sales growth of 10‐15%.

In the technology business, also known as solutions, Ocado said it wouldn't recognise revenue until a customer's first fulfilment centre was opened, though build costs would still be recognised.

With no centres expected to open in 2019, the company said expected to post a decline in Ebitda, given £15-20m in additional in operating costs.

'We continue to target further solutions deals, which would generate additional cash fees but would impact short term profits,' Ocado said.

Total capital expenditure in 2019 was is expected to be £350m, with the increase reflecting additional capital required to fulfil obligations to solutions customers.

'We now have in place a platform for significant and sustainable long-term value creation as the leading pure-play digital grocer in the UK, a world-leading provider of end-to-end ecommerce grocery solutions, and as an innovative and creative technology company,' chief executive Tim Steiner said.

'Our transformation journey is well under way with increased cash fees earned and greater investment as we execute on behalf of our partners.'

'Creating future value now will involve us continuing to scale the business, enhancing our platform, enabling our UK retail business to take advantage of all its opportunities for growth, and innovating for the future.'

'We look forward to fulfilling these opportunities with excitement and determination.'

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