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Ocado beats expectations

by LLB Editor
18th Jul 23 11:39 am

There are two ways of looking at Ocado’s results. The business has generated a small EBITDA profit versus market forecasts of a loss.

Sales are up across all of its divisions and clients are busy opening new fulfilment centres or reaping the benefits of Ocado’s system through improved operational performance. Ocado even believes it could win contracts outside of the grocery sector for its technology.

AJ Bell’s Danni Hewson said: “However, a bear would point to ongoing pre-tax losses for the group, continued slow pace in signing up new partners, and pedestrian gains in the total number of active customers for its UK retail operations.

“That life isn’t getting any worse for the company is enough to satisfy the market. Although what matters to most investors is whether Ocado remains a takeover target. Rumours that Amazon wanted to buy the business breathed new life into the share price in recent weeks but the retail giant has remained quiet on the speculation.

“Amazon is already a master at robotic-led warehouses so one has to wonder why it would need to buy Ocado. Yes, it wants to be bigger in the food sector – but it could just become a technology customer rather than buy Ocado outright if it wanted to take advantage of the systems.”

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