Ocado slumps despite profit

OCADO shares took a hit yesterday, falling 9.1 per cent despite the company reporting its first profit and unveiling a deal to deliver a range from French supermarket giant Carrefour.

Chief executive Tim Steiner admitted the online delivery retailer had issues with capacity but said its growth plan was on track.

In the six months to 15 May, Ocado made a pre-tax profit of £200,000, compared with a loss of £6.7m a year earlier.

Ocado’s revenues for the six months were up 20 per cent to £277m, from £230m for the same period last year.

Its new Carrefour range is one of many new lines aims to launch. It will allow London customers to sample premium French produce.

The expansion comes after Waitrose, whose goods Ocado deliver, announced that it would launch its own service for the London area.

Some analysts have suggested that the company’s growth model is flawed, particularly in such a competitive market. But Steiner said: “We have had problems with capacity which are being addressed but we have a very strong business model.

“We have delivered a profit and are planning to increase the number of lines we have.”

Ocado is planning to offer up to 40,000 lines under its business plan.