Ocado revealed a £214 million loss over its last year coming well above analyst expectations thanks to heavy investments in robotic warehouses overseas.
The online grocery giant posted a pre-tax loss of £214 million for the year to December 1 2019, significantly more than the £134 million loss analysts had expected.
Despite group sales rising 9.9 per cent to £1.76 billion, Ocado’s EBITDA dropped a whopping 27.2 per cent to £43.3 million.
It attributed this loss to a number of factors including the continued impact of the fire that ravaged its Andover automated warehouse last year, on which it is still awaiting pull payment of its insurance claim.
Elsewhere its new joint venture with Marks & Spencer, which will see the retailer’s food sold online for the first time in history when it goes live in September, has made it necessary to enforce new accounting standards which also affected its earnings performance.
This year Ocado says it plans to more than double its capital spending to over £600 million this year as it begins launching its first automated warehouses to overseas partners.
As it continues to shift its focus away from its consumer retail arm and towards supplying third party retailers with its cutting-edge technology, Ocado will launch its first overseas facilities for Sobeys in Canada and Casino in Paris in the first half of this year.
“Our progress over the last 12 months, which includes signing our eighth and ninth Solutions clients, Coles in Australia and Aeon in Japan, and successfully maintaining strong growth post-Andover, has demonstrated many of Ocado Group’s most important characteristics: resilience, innovation, focus and execution,” Ocado’s chief executive Tim Steiner said.
“The first half of this year will see a new milestone for Ocado Group; the opening of the first customer fulfilment centres for our international partners.
“These state-of-the-art robotic facilities are a core part of an end-to-end solution embracing automated fulfilment, an intuitive and easy to use webshop, and hyper-efficient last-mile delivery which will enable Sobeys and Groupe Casino to deliver the same outstanding customer experience to consumers in Canada and France as Ocado Retail does today here in the UK.
“The landscape of grocery retailing globally is changing. We are excited to be able to play a leadership role through Ocado Retail, our joint venture with M&S, and through our Solutions partnerships, as we fulfil our mission of “changing the way the world shops”.