Losses quadruple at online supermarket Ocado
Losses at Ocado have more than quadrupled to £44.9 million as the online supermarket continues to invest heavily in its technology solutions.
The listed company, which made a £9.8m loss a year ago, posted a 12 per cent increase in retail sales at £1.48 billion and grew its active customers 12 per cent to 721,000.
Revenue from providing technology to other businesses grew 16 per cent to £123m.
Ocado Technology’s headcount has increased by 76 per cent in the last three years, including 300 programmers hired in the last financial year, while it has filed 395 patent applications covering technologies such as real-time control systems, robotics, artificial intelligence and routing systems.
It has also opened its fourth customer fulfilment centre in Erith, South London, which is the largest fully automated CFC in the world and processing more than 30,000 orders a week – more than ten times the capacity of its manned CFCs.
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CEO Tim Steiner referred to the company’s transformation as an ‘18-year overnight success’.
"Our growth story is only just beginning,” he said. “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 applying our proprietary knowledge to a range of challenges.
“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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Ocado expects its retail business to post annual sales growth of 10-15 per cent in 2019.
However with no CFCs expected to open in 2019, it expects 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.