Ocado denies problem with upcoming IPO

Steve Dinneen
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ONLINE groceries firm Ocado hit back last night at reports its £1.2bn initial public offering (IPO) was under threat.

The shadow of doubt was cast after reports emerged Waitrose is planning to launch a rival delivery service in central London. But Ocado chief financial officer Andrew Bracey told City A.M. the firms are not in competition. He said: “We are delighted to be working with Waitrose and we have an excellent relationship.

“The way we work, we take customers from rival supermarkets and have no attritional impact on each other.”

Ocado currently delivers Waitrose products through its own online delivery system.

Ocado is 30 per cent owned by the John Lewis Partnership (JLP), the firm that owns Waitrose.

A John Lewis Partnership spokesman said: “John Lewis is supportive of a potential Ocado IPO.” He would not comment on whether JLP would retain its stake in Ocado if the IPO goes ahead.

The firm hopes to raise an initial £160m from the flotation. This will wipe out its £55m debts and provide it with £100m to build a new distribution centre. It is yet to make a pre-tax profit. Last year it tabled a pre-tax loss of £32.6m, compared with a pre-tax loss of £37.7 in 2008

Three major IPOs collapsed last week. Travelport was forced to humiliatingly pull its £2bn flotation, even after slashing its listing price. Merlin followed shortly after, also ditching a proposed £2bn IPO. And fashion retailer New Look made the shock decision to follow suit and scrap its £1.6bn IPO last Friday after it became clear it would not reach its valuation for the firm.