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Ocado sales jump as pandemic sees surge in online grocery shopping

Ocado reduced its half-year pre-tax loss by £17.3m to £23.6m

Ocado is revelling as shoppers are increasingly buying their goods online, helping the grocer to record a 20% rise in sales.

Ocado reduced its half-year pre-tax loss by £17.3m to £23.6m, as its revenues jumped nearly 20% to £1.2bn over the half-year period ending in May.

The FTSE 100 company’s underlying profits over trebled to £61m, although the company made a the firm made a pre-tax loss of £23.6m thanks to impairment charges of £104m.

Tim Steiner, Ocado’s chief executive, said: “As we head towards a post Covid-19 future, it is increasingly clear that the landscape for grocery worldwide has changed, for good.”

Amisha Chohan, equity research analyst at Quilter Cheviot, commented on Ocado’s positive results:

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“Over the last eighteen months, we have shown that the Ocado model works even in the most challenging and fluid of environments,” said Chohan.

“Ocado’s interim results confirm the encouraging trend coming from Ocado Retail, with group profit ahead of consensus expectations.”

“After a dry spell in terms of signing new partners for Ocado’s Smart Platform (OSP), mainly as a result of Covid travel restrictions, Ocado has announced a major new partnership with Auchan Group’s Alcampo in Spain.”

“Although the initial contract is for one centralised fulfilment centre (CFC), we believe there is considerable scope for the Group to add more over the years across different geographies.”

“And as travel restrictions ease, Ocado will look to sign further deals and partnerships for their leading technology from both new and existing partners. Further partnership deals should act as a positive share price catalyst.”

One question that remains is whether or not British customers will continue to shop online as lockdown restrictions are gone. Ocado’s competitors have their store locations as a contingency.

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