Ocado announce first half pre-tax operating loss of £3.8m and a 14.5 per cent YoY increase in sales

Online grocery company Ocado Group’s revenue increased 15.6 per cent to £355.9m in the 24 week period to 19 May 2013 – up 15.2 per cent year-on-year. It also announced a pre-tax operating loss of £3.8m and a 14.5 per cent increase in sales to £382.7m.

Tim Steiner, chief executive officer of Ocado, said:

The first half of 2013 has been an extremely busy period for us as we continued to grow both our customer numbers and average basket. We continued to improve our proposition, making it easier for customers to shop with us and giving them access to a wider range of products at competitive prices. At the same time we have continued to drive the efficiency and capacity in our business, including the opening of our new CFC, which is operating as planned, and which provides us with the capacity to grow further in the future. We remain well placed to take advantage of the accelerating structural changes in the industry as more customers choose online delivery for their grocery shopping.

We were delighted to announce a long-term agreement with our first strategic customer, Morrisons, to provide them with IP and operating services to help launch and operate their online grocery business. This development reflects the growing shift we are seeing in favour of online grocery shopping in the UK and internationally, and a validation of the unique technology, IP and operating model pioneered by Ocado to exploit this growing channel. The positive financial impact of this agreement and the endorsement of our business model, positions us well for future strategic developments.

The online grocer has not recorded an annual pre-tax profit since it was founded in 2000, prompting mixed reactions.

But director of retail consultantcy firm Retail Vision John Ibbotson says "it's now beginning to feel like it [Ocado] will never make a sufficient return on the millions invested, despite its deal with Morrisons" and adds that rising share prices off the back of speculation that Amazon or Boots will buy it for its state-of-the-art technology, or that it can license its technology to others is "all wishful thinking".