Revenue and earnings up for Ocado

Online grocer Ocado saw revenue and earning grow in the first half of the year, reporting gross sales of £582.9m for the 24 weeks to 15 May on Tuesday, a 13.9% rise on £511.9m in the comparative period last year.

EBITDA hit £40.4m, a 5.7% increase from £38.2m, off the back of revenue of £584.2m, a 14.1% rise of 2014’s £507.7m.

The FTSE 250 firm saw profit before tax hit £8.5m, up from £7.2m, although cash and cash equivalents dropped to £52.7m from £70.4m by the end of the 24 week period.

Ocado’s statutory net debt widened to £136.2m from £105m, with external debt reaching £14.6m, compared with external cash of £24.9m last May.

“I am encouraged by the steady progress in our business, with volumes through our operations, including the throughput for Morrisons, growing by 30%,” said Ocado chief executive Tim Steiner.

“The market remains competitive with ongoing price deflation but our increasing scale and operational efficiencies meant that we still grew profits, albeit at a slower rate.”

Steiner said the company has been gaining share in the online grocery market, and expects this to continue.

“The last few years have shown beyond doubt that British shoppers are choosing the benefits of grocery shopping online and we believe that the momentum of channel shift away from bricks and mortar stores will continue.

“The more opportunities customers have to try grocery shopping online, the more they will be attracted to Ocado's superior customer offer,” he added.

Testing of the company’s new proprietary fulfilment and software solutions in its third facility in Andover was progressing well, Steiner reported, and they expected to move on from the test phase in the autumn post the quieter summer period.

Steiner said that, and other innovations in technology that benefit customers, were not only strengthening the Ocado retail brand but also making the Ocado Smart Platform a more attractive solution for retailers outside the UK looking to build their own online grocery offer.

He said he remained confident about signing up partners to the platform.

“Sales growth continues at pace and the productivity of our operations is improving.

“We have the technology, the brand and the financial resources to build on our leading position and look forward to the future with confidence,” Steiner explained.