Ocado Confident For Technology Licensing Deal After Missing Goal
Ocado Group Plc said that it remains confident of licensing its distribution-centre technology, reassuring investors after the UK online grocer missed a self-imposed goal to find a partner by the end of last year.
The company expects to "sign multiple deals in multiple territories in the medium term," Ocado said in a recent statement, sending its shares up as much as 8.2 per cent.
The comments gave fresh impetus to speculation that the company will come good on its promise to sign a lucrative deal with an international grocer. Since partnering with Wm Morrison Supermarkets in 2013, Ocado has failed to reach any further agreements, missing the target to do so by the end of last year.
"In many ways, Ocado’s technology is its greatest asset," said John Ibbotson, an analyst at consultant Retail Vision, "but despite the company reportedly courting international suitors like Carrefour and Safeway, it has been unable to sell its systems overseas."
Reporting a 31-per-cent increase in its full-year operating profit, Ocado said that its technology proposition "is proving to be of great interest to a significant number of retailers".
Such an agreement would provide a grocer with all of the computer technology and warehouse equipment that it needs to run an online service of any size.
Ocado shares were up 1.9 per cent at 268.4 pence at 8.53 a.m. in London. The stock has fallen 12 per cent this year, weighed down by Amazon.com, Inc.’s introduction of a grocery service for UK members of its Prime service. On a conference call, Ocado chief executive officer Tim Steiner said that the retailer hasn’t held talks with Amazon about a possible bid.
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