Ocado reports growth in revenue and profit
Online grocer Ocado has reported growth in both revenues and profit in its latest half-year results. In a statement issued today, Ocado said that it had generated a revenue of £584.2m for the 24 weeks ended 15 May, which was a 15.1% increase on the first half of 2015. Profits before tax were up from £7.2m to £8.5m.
The company added that 94.9% of it deliveries were on time, and it achieved an order accuracy of 99.1%. Ocado described these results are “market leading service levels” but they were down slightly on its 1H 2015 performance of, respectively, 95.6% and 99.3%.
The online grocer also noted more than 55% of its orders were now checked out using a mobile device.
Commenting on the results, Tim Steiner, Chief Executive Officer of Ocado, said: “I am encouraged by the steady progress in our business, with volumes through our operations, including the throughput for Morrisons, growing by 30%. The market remains competitive with ongoing price deflation but our increasing scale and operational efficiencies meant that we still grew profits, albeit at a slower rate.
“We have been gaining share in the online grocery market and expect this to continue. The last few years have shown beyond doubt that British shoppers are choosing the benefits of grocery shopping online and we believe that the momentum of channel shift away from bricks and mortar stores will continue. The more opportunities customers have to try grocery shopping online, the more they will be attracted to Ocado’s superior customer offer.
“Testing of our new proprietary fulfilment and software solutions in our third facility in Andover is progressing well and we expect to move out of our test phase in the autumn post the quieter summer period. This and other innovations in technology that benefit our customers not only strengthen the Ocado retail brand but also make the Ocado Smart Platform an even more attractive solution for retailers outside the UK looking to build their own online grocery offer. I remain confident about signing up partners to this platform.
“Sales growth continues at pace and the productivity of our operations is improving. We have the technology, the brand and the financial resources to build on our leading position and look forward to the future with confidence.”
Interestingly, the company made no mention of the most talked-out new developments in the UK online grocery sector: the UK launch of Amazon Fresh, and Amazon’s tie-up with Morrisons (which is also an Ocado partner).
Ocado’s results statement ended with the teasing coda: “Discussions with many potential international retailers to adopt the Ocado Smart Platform solution continue.”
