Ocado – the British online supermarket and technology group – said it was on track to hit its goal of turning cash flow positive in its 2025/26 year, but its shares fell on concerns over a slowdown in the rollout of robotic sites.
The group runs an online supermarket in Britain through a joint venture with Marks & Spencer, though its value is driven by the sale of its cutting-edge warehouse technology to retailers around the world.
Ocado shares were down 15% on Thursday, taking losses over the last year to 42%, reflecting the market’s concern at the pace of the rollout of robotic sites for its grocery retail partners and a lack of further technology deals.
The retailer’s most important grocery partner, Kroger in the US, has slowed down its rollout of robotic warehouses, or customer fulfilment centres (CFCs) as Ocado calls them, while its Canadian partner Sobeys has paused the opening of a fourth warehouse.
Ocado said “at least” seven more CFCs would go live over the next three years.
But it said two of these – CFCs for Kroger in Charlotte and Phoenix – were not expected to go live until early in its 2025/26 year.
Results
Reflecting an improved revenue performance in its technology solutions and retail divisions, core earnings, or adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) level – Ocado’s preferred metric – were £153.3 million in its year to 1 December 2024, up from £51.6 million in financial year 2022/23.
Revenue rose 14.1% to £3.2 billion.
Ocado’s pretax loss reduced to £374.3 million, versus a loss of £387 million in 2022/23, putting Ocado on track to turn cash flow positive in 2025/26.
For the 2024/25 year, Ocado forecast the technology solutions division would achieve revenue growth of “circa 10%” with an EBITDA margin of 20% to 25%.
Revenue growth for the Ocado Retail joint venture with M&S was forecast at “above 10%” at a margin of “circa 4%.”
Read More: Ocado Retail Sales Growth Accelerates On Customer Wins
