Overview
Ocado, the online grocer and retail-technology specialist, reported positive results for the first half of the year, with revenue growth and improved profitability. Despite a widened pretax loss, the company remains confident in its full-year guidance. Let’s take a closer look at the key details.
Financial Performance
- Ocado’s pretax loss for the 26 weeks to May 28 rose to GBP289.5 million, compared to a loss of GBP211.3 million in the same period last year. This increase was primarily due to one-off costs totaling GBP77.2 million, including expenses related to the closure of the Hatfield customer fulfillment center and a revaluation of its joint-venture partner Marks and Spencer Group.
- Revenue slightly increased to GBP1.37 billion, up from GBP1.26 billion in the previous year. This growth was driven by various divisions, with technology solutions revenue experiencing a significant rise of 59% to reach GBP198.2 million.
- Adjusted earnings before interest, taxes, depreciation, and amortization swung to a positive figure of GBP16.6 million, compared to a loss of GBP13.6 million in the previous year.
Ocado Retail Performance
- Ocado Retail, the joint venture with Marks & Spencer Group, reported a revenue increase to GBP1.18 billion from GBP1.12 billion. This growth can be attributed to strong active customer growth, a rise in average weekly orders, and an increase in the average basket value.
- Ocado highlighted an improved underlying cash flow of GBP108 million during the period. This improvement was driven by revenue growth, cost reductions, and lower capital expenditure. The company remains on track to achieve its targeted underlying cash-flow improvement of GBP200 million for fiscal 2023.
Outlook
Ocado has expressed confidence in its full-year guidance, which was initially outlined in February. Despite the widened pretax loss, the company’s revenue growth and improved underlying cash flow demonstrate positive momentum in its operations.
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