Ocado sales on track despite weather

 
City A.M. Reporter
Online grocer Ocado reported a 26.7 per cent rise in December sales as the popularity of internet shopping and upmarket foods helped it to thrive despite disruption from severe winter weather.

The loss-making group, whose shares have been on a roller-coaster ride since they floated in July, said the rise in December gross sales followed an increase of 27.4 per cent in the last quarter of its financial year ending 28 November.

Most analysts had expected fourth-quarter and December sales growth to be slightly below the 29.5 per cent reported in the third quarter as the group annualised the introduction of Sunday deliveries and grappled with some harsh weather.

Gross profit margins remained stable and earnings before interest, tax, depreciation and amortisation (EBITDA) were in line with its expectations, the group said.

Ocado, which sells the products of upmarket grocer Waitrose, cut the price of its initial public offering by almost a quarter and then saw its shares almost halve as investors worried when it might convert strong sales growth into profit.

But the stock has since bounced back above its 180 pence flotation price, helped by periodic speculation it might attract a bid from a food retailer yet to offer a full internet service, such as Marks & Spencer or Wm Morrison.