Ocado chief executive Tim Steiner heralds "online grocery revolution" as firm records first full year profit

 
Sarah Spickernell
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The contract with Wm Morrison will last 25 years (Source: Getty)

Ocado has made its first full-year profit in the company's 15-year history

The figures

Pre-tax profit was £7.2m for the 12 months to 30 November, compared to a loss of £12.5m during the equivalent period a year earlier.
Sales went up from £843m to £972.4m, while earnings before interest, tax, depreciation and amortisation rose from £45.8m to £71.6m.
Ocado's share price dipped in early trading, but recovered shortly afterwards and was up 2.8 per cent by mid-morning.

Why it's interesting

The long-awaited success of Ocado will come as a relief, not just to investors, but everyone who has a vested interest in making online shopping and home deliveries work. And that is pretty much the whole retail sector.
The firm had delivered groceries for Waitrose since it was founded in 2000, but it launched a separate partnership with Morrisons in January last year, enabling the supermarket chain to offer an online service for the first time.
According to Ocado, the profit was largely down to this £200m contract to deliver groceries for Wm Morrison, which will last for 25 years.
The news won't come as too much of a surprise to those keeping up with Ocado's performance – which is presumably why the share price has hardly moved. Last month the company said its Christmas sales had climbed 14.8 per cent compared to 2013.

What Ocado said

Chief executive Tim Steiner said this partnership was just the first of many
The successful launch and smooth ramp up of Morrisons.com was particularly encouraging and paves the way for future agreements to commercialise the value of our intellectual property.
Overall, we are well equipped to continue to lead the online grocery revolution, in the UK and overseas, as increasing numbers of customers shift away from traditional forms of retailing. We are confident that we have significant opportunities for growth in sales and shareholder value.

In short

Overall, shares in Ocado have gone down over the last twelve months. However, they have been on an upward trajectory since October last year, and today's results indicate this is likely to continue for some time.

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