Ocado has reported its second-ever pre-tax profit, which jumped 65 per cent in the year to the end of November. And the company was dropped a couple of hints which could relate to those rumours of a tie-up with a certain giant ecommerce site…
In a statement today, Ocado said gross retail sales rose to £1.1bn in 2015, up 14.7 per cent from £972.4m in 2014.
Revenues rose 16.7 per cent, from £949m to £1.1bn, while profits before tax rose 65.3 per cent to £11.9m, from £7.2m the year before.
Meanwhile, it boosted its customer base by 20 per cent, while its active customers rose 12.4 per cent to 509,000. And order volumes increased 16.8 per cent to an average of 195,000 orders per week – a peak of 225,000 on its best week.
The only fly in the ointment was average basket value, which fell 2.1 per cent to £109.95. But that's deflation for you.
Shares jumped 6.5 per cent to 280.4p in the first minutes of trading.
Why it's interesting
Shares in Ocado jumped 16 per cent in mid-January after rumours of a tie-up between it and Amazon. It would make sense: Amazon is making forays into the delivery of fresh food in the UK – and since Ocado is two parts grocer, one part logistics company (it does deliveries for Morrisons and Waitrose), making use of that infrastructure would make sense.
This morning Ocado updated the market on its tie-up with Morrisons, saying after a year of trading, sales had reached £200m.
And it added that "despite not signing a first deal in 2015, discussions with multiple potential international partners to adopt the Ocado Smart Platform solution continue".
"Our confidence in signing a deal remains high," it added. Hmm.
What Ocado said
Chief executive Tim Steiner said:
The UK grocery market continued to experience significant challenges throughout 2015. Ongoing price competitiveness and deflationary pressure combined with changing customer behaviour, in particular with continued shifts to discount stores and online, have been reflected in declining store volumes at large supermarkets and margin pressure across the industry.
Notwithstanding this challenging market environment, we continued to deliver our strategic objectives, namely, to drive growth, maximise efficiency and utilise our knowledge, ideally positioning ourselves to benefit from the continued channel shift to online grocery shopping. Our strategic objectives apply equally to our own retail business and to our existing and future platform activities.
A solid performance from Ocado in a tough environment – but no confirmation on those rumours quite yet…