Ocado slumps after grocery profits go off

Kasmira Jefford
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SHARES in Ocado took a battering yesterday after the online grocer warned that full-year profits would come in below expectations, due to problems at its main distribution centre in north London.

The company, which sells goods from high-end supermarket chain Waitrose, said underlying earnings for the year would be within a range of £27.5m--£28.5m, down from analysts’ consensus of £34m.

Ocado said profit margins had been hit by capacity constraints at its main Hatfield depot and the need to bring on extra staff to keep up customer service levels during work to expand its operations.

Deliveries reached a record peak of 131,381 orders in the last week of the year to 27 November.

“We are encouraged by the operational capacity improvements that we have made, but are disappointed that we did not achieve as large or as early an increase as we had originally planned,” said Tim Steiner, Ocado’s chief executive.
Shares fell 16.85 per cent to 59.20p.