Ocado Third-Quarter Revenue Rises On Increased Orders

Mae Love
September 19, 2017

Revenues at online grocer Ocado climbed by around 15pc in the third quarter as it enjoyed a surge in the number of orders it receives each week.

Commenting on the retailer's performance, Barclays European Food Retail Equity Research said, "Average orders per week increased by 16.0%, a slight increase vs the 15.6% recorded in 1H".

Including earnings from its tie-up with Morrisons, group revenues lifted by 14.3% to £344.5 million.

The average size of customers' spend, however, dropped just over 1%, from £107.56 to £106.25.

There was £149m of cash in the bank as of 27 August, while external borrowings stood at £284m.

"We continue to grow sales at a rate significantly in excess of the average for our industry".

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"These investments", he said, "while increasing some costs in the short term, will allow us to meet the rapidly growing demand for our services from United Kingdom consumers while allowing us to offer the very latest technology to current and future customers of our Ocado Smart Platform".

Tim Steiner, chief executive at Ocado, said: "While increasing some costs in the short term, this will allow us to meet the rapidly growing demand for our services from United Kingdom consumers while allowing us to offer the very latest technology to current and future customers of our Ocado Smart Platform". An example of this was Ocado being the first United Kingdom supermarket to allow customers to modify orders using Amazon's voice-activated tool, Alexa.

In late morning trading, Ocado shares were down 4.3%, or 12.9p at 289.1p.

After opening a new customer fulfillment centre in Andover earlier this year, Ocado reported on Tuesday it was investing in another, bigger centre in Erith, which would mean incurring "some costs" in the short term. "Profits have not been great as Ocado keeps ploughing money into its technology", said ETX Capital's Neil Wilson.

Ocado has been investing in technology to combat fiece compeition in the sector.

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