Ocado keeps guidance after return to first-half underlying profit

2023-07-18 15:52

By James Davey LONDON Ocado, the British online supermarket and technology group, kept its financial guidance for the

By James Davey

LONDON Ocado, the British online supermarket and technology group, kept its financial guidance for the year as it reported a return to underlying profit in its first half.

The group, whose shares surged last month after a report of possible takeover interest from Amazon, made earnings before interest, tax, depreciation and amortisation (EBITDA) of 16.6 million pounds ($21.7 million) in the six months to May 28, versus a loss of 13.6 million a year earlier.

Half-year revenue rose 8.6% to 1.37 billion pounds.

"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," said CEO Tim Steiner.

However, at the statutory level Ocado's pretax loss widened to 289.5 million pounds from 211.3 million reflecting depreciation, amortisation and exceptional items.

Ocado said there was no change to the financial guidance given at its full-year results in February.

The group's shares are down 23% in the last year but they surged as much as 47% on June 22 after the Times newspaper reported possible takeover interest from more than one U.S. suitor including Amazon. Ocado and Amazon have declined to comment.

Ocado Group has three parts to its business - Ocado Retail, an online supermarket joint venture with Marks & Spencer, UK Logistics which provides fulfilment and delivery support to UK partners, and Technology Solutions which licenses its robot technology for warehouses to other retailers, such as Kroger in the United States, Aeon in Japan and Casino in France.

In the first half Technology Solutions was EBITDA positive, Logistics was flat and Ocado Retail made a small loss.

The group maintained its guidance for Technology Solutions to deliver "positive" EBITDA over the full 2022-23 year, with Ocado Retail making "marginally positive" EBITDA, and Logistics making "stable" EBITDA.

Ocado said its liquidity remains strong at 1.3 billion pounds.

($1 = 0.7642 pounds)

(Reporting by James Davey; editing by Kate Holton and Jason Neely)