Ocado restates FY23 guidance despite increased losses
The retailer expects Ocado Retail to have a modestly positive EBITDA by the end of the year
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Ocado has restated that it has full confidence in its FY23 guidance despite posting losses of £289.5m for the half year ended 28 May 2023.
The main reasons for these losses are put down to £192.5m worth of depreciation of assets and amortisation plus £77.2m worth of exceptional items.
These exceptional items include £38.7m for a UK network capacity review, £17.4m change in fair value relating to the revaluation of the M&S contingent consideration.
It also includes litigation costs of £9.1m related to patent infringement litigation between the Group and AutoStore Technology AS.
The company’s retail arm is also struggling after posting an EBITDA loss of £2.5m compared with a £31.3m profit in the first half of 2022.
Despite this it actually saw an increase in revenues posting £1.17bn for the half year, uo from £1.12bn in 2022.
Ocado Retail’s online market share saw modest growth from 12.7% up to 30% and its customer base also slightly increased by 2,000 customers.
The retailer expects Ocado Retail to have a modestly positive EBITDA by the end of the year.
Ocado Logistics arm saw its EBITDA hold steady increasing to £14.6m up from £14.5m and its technology solutions arm posted an EBITDA of £5.9m compared with a loss of £58.8m last half year.
Tim Steiner, CEO, said: “Ocado Group has made good progress over the last six months. Technology Solutions has continued to deliver our industry-leading Ocado Smart Platform around the world and the opening of the first CFC for AEON, Japan’s biggest food retailer, in Chiba City just outside Tokyo, is a landmark for the grocery sector.
“In the UK, Ocado Logistics had a steady, profitable first half and Ocado Retail is making good progress, with a return to profitability in Q2. Our operations in the UK remain an important demonstration of the potential for our international ambitions, as we seek to transform the economics of online grocery and expand into the wider automated storage and retrieval solutions market.”
He added: “At a group level, I am pleased to see the operational and financial discipline delivered by all our teams as we focus on driving cost efficiencies and cash flow improvement. For these reasons, we look forward to delivering the full potential of the business and continuing to create lasting value for all our stakeholders.”
