Ocado reports major losses as it reveals £100m cost of fire
Ocado has reported a half year loss of £43 million as it revealed the extend of the damage to its operations caused by a fire at its fulfilment centre earlier this year.
In February Ocado’s flagship automated warehouse in Andover was ravaged by a fire, later discovered to have been started by a battery on one of its robots, wreaking havoc on its operations here in the UK.
Amid its half-year results released this morning, Ocado revealed that the fire had cost it a total of £110.3 million, offset slightly by an £11.8 million insurance pay-out.
This led to a reported exceptional loss of £98.5 million during the 26 weeks to June 2, dragging down its total pre-tax losses to £142.8 million, a dramatic increase from its £13.6 million loss in the same period a year prior.
Although for the full year this is expected to cost Ocado around £15 million, Ocado said it remained confident it would recoup the funds “over time” and would continue to grow.
Focusing on its adjusted figures, not taking into account costs associated with the fire, Ocado saw reported a loss of £43 million, while adjusted underlying earnings halved to £18.7 million.
Despite making losses, its continued to see sales growth, reporting a 9.7 per cent jump to £803.2 million, adding that it still expected to see 10 to 15 per cent growth in the next six months.
Its house broker Numis said that Ocado’s full-year EDBITDA is likely to come in at £20 million, £25 million less than analysts had previously expected.
“The innovation factory we have created is founded on a near twenty-year heritage of constant re-examination and reinvention of technology to provide the best customer experience,” chief executive Tim Steiner said.
“We have never had as many opportunities to grow as we do today. As we look to successfully scale our business and deliver outstanding execution to our partners, our challenge will be to select and prioritise the most attractive of these opportunities.”
This comes as Ocado moves away from its focus selling groceries directly and more towards providing its high-tech solutions to third party retailers via its Ocado Solutions arm, which reported revenues of £71 million during the half year, up 20 per cent year-on-year.