Ocado sales and earnings improve while net debt widens

Online grocery retailer Ocado posted its preliminary results for the year to 27 November 2016 on Tuesday, with gross retail sales improving 13.6% to £1.27bn over the year.

The FTSE 250 company’s revenue was also improved, up 14.8% to £1.27bn, while EBITDA was up 3.3% at £84.3m.

Its profit before tax and exceptional items finished the year 21.8% firmer at £14.5m, while profit after tax was a marginal performer, adding 1.7% to £12m.

Ocado retained a strong bank balance at year-end, with cash and cash equivalents of £50.9m - up from £45.8m - although net debt widened to £164.9m from £127m at the end of 2015.

External net debt was significantly wider at £56.2m, compared to £7.5m a year earlier.

“We are pleased to announce results today which reflect robust trading in our core business and shows continued progress against our strategic objectives in what has been a challenging retail environment,” said CEO Tim Steiner.

“Over the course of the last year, we grew our active customer base by almost 14%, with growth in average orders per week approaching 18%, testament to the strength of our customer proposition, market position and technology.”

Steiner said during the year, the company began operations at its new customer fulfilment centre in Andover, which was the first installation of its new proprietary technology.

At the same time, he said Ocado made good progress in improving the efficiency and throughput of its existing operations, increasing capacity from existing facilities by over 20,000 weekly orders.

“These developments position us well for future growth, whilst improving our returns and enhancing the service we can offer our customers.

“In this ever-evolving retail environment, we look forward to further developing our capabilities through innovation, creating the next generation e-commerce capabilities that will ensure our offer remains compelling for both retail and OSP customers alike.”