Ocado H1 loss narrows as retail revenue rises

The pretax loss for the six months to the end of May was £23.6m compared with £40.6m a year earlier as group revenue rose 21.4% to £1.32bn.

Retail revenue increased 19.8% to £1.22bn. Ocado's retail business, supplied by Marks & Spencer, has boomed during the pandemic as shoppers have shifted online.

Ocado said retail revenue increased in the second quarter even as restrictions were eased, allowing households to eat and drink out. Basket sizes have started to return to pre-crisis levels and were 10% lower at the end of the half than the average during the period.

Ocado's main source of long-term growth is selling its sales platform and knowhow to retailers seeking to expand their online sales. UK solutions and logistics revenue rose 13% to £357.3m and international solutions revenue was £26.6m compared with £1.6m a year earlier.

The FTSE 100 group said it signed a deal with France's Auchan to build "fulfilment centres" and provide technology for Auchan's Spanish Alcampo business.

Ocado said its strong retail performance would be offset by £30m of costs related to its Kindred robotic picking business and investment in group operations technology. The company stuck to its outlook for group earnings.