Ocado revenue jumps 21% but fails to turn profit

Ocado has reported group revenue growth of 21.4 per cent to £1.3 billion in the first six months of the year, compared to £1.08 billion in 2020.

During the same period, the company’s retail business saw a 19.8 per cent increase to £1.2 billion, up from £1.02 billion in the previous year.

Ocado’s UK solutions and logistics business saw revenue rise by 13.1 per cent to £357 million compared to £316 million in 2020.

While group EBITDA was up by 41.2 per cent to £61 million, the company still failed to turn a profit.

Ocado’s loss before tax was £23.6 million compared to £40.6 million in the first half of last year.

This was largely due to a £56.6 million loss from its international solutions business, which sells technology to third-party retailers.

Despite the loss, Ocado continues to expand its international arm. As the company announced its financial results on Tuesday, it also revealed a new deal with Auchan Retail.

Ocado Solutions is to develop Alcampo's online business in Spain using the Ocado Smart Platform.

Offsetting the strong retail performance, the business now expects a £30 million lower EBITDA contribution between the International Solutions, UK Solutions & Logistics and Other segments.

The company said that there had been a £10 million impact to International Solutions from Kindred Systems. Ocado assured that it was making good progress with the business but that near term revenues have ramped up “more slowly” than originally forecast.

Ocado also invested £15 million to support the growth of the business in the UK and international.

“As we head towards a post Covid-19 future, it is increasingly clear that the landscape for grocery worldwide has changed, for good,” said Tim Steiner, chief executive officer, Ocado Group. “Over the last eighteen months, we have shown that the Ocado model works even in the most challenging and fluid of environments.”

Steiner added: “That ours is a proven model online grocery has been again demonstrated by the strong performance of Ocado Retail, the historic core of the Ocado business, which has led the market in customer experience, increasing sales by 20 per cent in the period, thanks to a significant increase in customer numbers, while continuing to show sustainable and industry-leading profitable growth.”

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