Ocado confident on float

City A.M. Reporter
ONLINE grocer Ocado is looking at a summer flotation, confident its rapid sales growth and expanding marketplace will win over investors despite jittery equity markets and its lack of profit.

Finance director Andrew Bracey said proceeds from selling new shares would be used mainly for growth, such as building a second centre for processing customer orders, with a site likely to be signed up later this year. He was also confident that key partner Waitrose – whose products Ocado sells – would renew its contract in 2013 and the relationship would continue “for the foreseeable future”.

Ocado could look to raise around £150m from selling new shares in any listing, and it is expected to have an enterprise value – equity plus debt – of about £1bn.

Ocado, set up by three former Goldman Sachs bankers in 2000, has been growing sales at over 25 per cent despite the recession.

But its flotation plans have attracted some scepticism as it has yet to make a pre--tax profit.