{"id":37161,"date":"2023-07-18T05:54:16","date_gmt":"2023-07-18T09:54:16","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/ocados-share-price-soars-13-as-ftse-100-firm-returns-to-profit\/"},"modified":"2023-07-18T05:54:18","modified_gmt":"2023-07-18T09:54:18","slug":"ocados-share-price-soars-13-as-ftse-100-firm-returns-to-profit","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=37161","title":{"rendered":"Ocado\u2019s Share Price Soars 13% As FTSE 100 Firm Returns To Profit"},"content":{"rendered":"
\n

Supermarket and technology group Ocado Group was the FTSE 100\u2019s second-biggest riser on Tuesday as it announced a return to profit in the first half.<\/p>\n

At 657.8p per share the Ocado share price was 13% more expensive on the day.<\/p>\n

Revenues rose 9% to \u00a31.37 billion during the six months to May, it said. This was driven by a 5% sales increase at its core retail operation to \u00a31.18 billion. Revenue at its technology solutions arm, meanwhile, advanced 59% year on year to \u00a3198.2 million.<\/p>\n

This meant that Ocado flipped back into profit for its first fiscal half with positive EBITDA of \u00a316.6 million. It recorded an EBITDA loss of \u00a313.6 million a year earlier.<\/p>\n

\u201cStrong Operational Execution\u201d<\/h2>\n

The FTSE firm said its Technology Solutions arm had delivered \u201cstrong operational execution\u201d during the first half. The business opened two customer fulfilment centres \u2014 including one for AOEN, Japan\u2019s largest food retailer \u2014 as well as six new modules in the period.<\/p>\n

<\/fbs-ad><\/p>\n

Ocado said that its new customer fulfilment centres \u201cwere delivered on time and on budget,\u201d adding that \u201cour equipment is performing well and the sites have started ramping up their capacity according to plan.\u201d Support costs meanwhile dropped by \u00a312 million year on year, to \u00a389 million.<\/p>\n

The business now operates 25 sites and 105 live modules, it said. It predicted that one further fulfilment centre will be opened this year, though it added that the ribbon cutting on two new sites for Coles in Australia are currently review.<\/p>\n

At its retail division, Ocado said that first-half sales were boosted by growth in active customer numbers. These increased 10.6% year on year to 959,000. Meanwhile, average orders per week rose 4% in the period to 392,000, and the average basket value rose 1.5% thanks to price hikes. Average selling prices were up 8.4% from a year earlier.<\/p>\n

However, average basket sizes dropped 6.3% in the first half to 45 items. But Ocado noted that the number of items per basket stabilised in the last quarter at 44 items.<\/p>\n

\u201cGood Progress\u201d<\/h2>\n

Chief executive Tim Steiner commented that \u201cOcado Group has made good progress over the last six months,\u201d adding that \u201cTechnology Solutions has continued to deliver our industry-leading Ocado Smart Platform around the world.\u201d<\/p>\n

He said that \u201cretail is making good progress\u201d and noted that \u201cour operations in the UK remain an important demonstration of the potential for our international ambitions.\u201d<\/p>\n

Ocado reiterated its full-year guidance following its positive first half. It expects retail revenues to rise by mid-single-digit percentages and for EBITDA to enjoy marginal growth. Technology sales are tipped to rise by 40% and EBITDA is also expected to rise year on year.<\/p>\n

What The City Says<\/strong><\/h2>\n

Analyst Sophie Lund-Yates of Hargreaves Lansdown noted that \u201cOcado has returned to profit in its retail business on an EBITDA level, thanks in part to efforts to cut prices which has helped coax shoppers back.\u201d<\/p>\n

She noted, however, that \u201cpressure on Ocado\u2019s overall margins is significant, especially because of efforts to improve its relationship with Marks & Spencer, which is damaging the bottom line.\u201d<\/p>\n

FTSE 250-listed Marks & Spencer paid Ocado \u00a3750m four years ago to become joint owner of the grocer\u2019s retail division.<\/p>\n

Lund-Yates added that \u201cthe current economic environment makes it more difficult to entice grocery chains to sign up to Ocado\u2019s techy fulfilment systems,\u201d though she commented that \u201crecent progress shouldn\u2019t be knocked.\u201d<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Supermarket and technology group Ocado Group was the FTSE 100\u2019s second-biggest riser on Tuesday as it announced a return to profit in the first half. At 657.8p per share the Ocado share price was 13% more expensive on the day. Revenues rose 9% to \u00a31.37 billion during the six months to May, it said. This […]<\/p>\n","protected":false},"author":1,"featured_media":37162,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-37161","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nOcado\u2019s Share Price Soars 13% As FTSE 100 Firm Returns To Profit | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Supermarket and technology group Ocado Group was the FTSE 100\u2019s second-biggest riser on Tuesday as it announced a return to profit in the first half. 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