Ocado Full-Year Results – What The Analysts Said

By Steve Wynne-Jones
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Ocado Full-Year Results – What The Analysts Said

Online grocer Ocado Group has posted a 7.2% increase in revenue in its financial year to the end of November, however the group posted a 12.1% decline in EBITDA for the period, citing increased investment in its Ocado Solutions arm.

"The past year has further reinforced that demand for online grocery is here to stay," commented Tim Steiner, Ocado chief executive.

Here's how leading industry analysts viewed its performance.

Russ Mould, AJ Bell

“Ocado has developed a reputation for being all talk and no profit, and its latest full year results show a continuation of negative earnings at a group level.

Ocado needs to show off its capabilities, yet its track record has been blemished by two fires at its fulfilment centres in recent years after its robots collided, and an ongoing legal battle with AutoStore around alleged patent infringement.


“As we’ve seen in recent years, this is very much a waiting game. Years into the future, Ocado could be sitting pretty, lapping up a healthy stream of cash from partners using its technology. But for now, it’s all about spending to help set up operations and to make its technology as efficient and clever as possible. Its capital expenditure represents a big chunk of revenue, and it is growing fast, unlike its sales.

“Investors are getting tired of hanging around for the big earnings breakthrough and its share price has more than halved over the past 12 months.”

Juliet Cuell, GlobalData

"While Ocado faces competition from supermarkets which are more agile and able to quickly respond to increased demand by escalating instore picking, it has done well to ramp up the speed of CFC openings – including the opening of its first mini CFC in Bristol, which was its fastest launch to date, a year after announcement.

"Given increased competition from rapid delivery start-ups, including Gorillas which formed a trial partnership with Tesco in November 2021, Ocado must choose new Zoom (its inhouse rapid delivery service) sites carefully. It plans to open four sites in 2022 including a further two in London following the success of its Acton site, and two in other UK cities.


"Ocado should identify locations where demand is likely to be strong, such as cities with a young demographic as these consumers increasingly demand ultra-convenience."

Clive Black, Shore Capital

"Ocado set its stall for FY22 – the Group has a November year-end – though its autumn '21 update that amounted to an effective profit warning for the current financial year.

"Sadly, lowered guidance and the extension of the jam tomorrow corridor is par for the course from Ocado, a distinctive business that continues to blend undoubted innovation and, seemingly, potential, with an inability to breakeven and create a pathway to sustainable self-funded development.

"The Ocado preliminary results are always more significant for what they reveal about its non-UK Retail business, which is an effective partnership with Marks & Spencer, and so wider developments, the cash burn statement and evolving balance sheet, noting that at the EBIT and pre-tax level the Group heavily remains loss-making, as expected by the market today. But when it floated, Ocado was promising the financial earth by now."


William Woods, Bernstein

"Ocado's FY21 results were mixed with slight misses to revenue and EBITDA at -1%, which should be overlooked given the complexity of modelling the business, whilst 2022 is set up to be a strong year.

"International solutions revenue will double as 8 more CFCs open up, retail will grow mid-teens revenue with capacity increased by >40%, and as a result UK Solutions will increase fees by >30%. EBITDA guidance for FY22 improving with flat EBITDA internationally despite doubling revenue, UK solutions EBITDA improving >50% and flatter retail growth due to investments in tech & marketing. Overall revenue was £2,498m vs. expectations of £2,536m (-1%), EBITDA came in at £61m vs. expectations of £61.8m (-1%)."

Ross Hindle, Third Bridge

"Growth may have appeared to come easy for Ocado’s during COVID, but the company is now doing everything possible to demonstrate its post-pandemic potential. This includes a vigorous legal defence of its IP dispute with Autostore and a new generation of hi-tech grocery-picking robots."

"Omicron and the return of home working bolstered Ocado’s sales. Ocado’s partnership with M&S was particularly beneficial as consumers sought to premiumise their mealtimes."


"Online sales penetration continues to remain robust at 12%, up from 7% pre-covid and expected to rise to 25% by 2025. The rise of rapid-delivery grocery providers such as Gorillas, Uber Eats and Weezy continues to act in Ocado’s favour as online grocery shopping becomes even more mainstream. As the go-to online grocery retailer Ocado is shrugging off increased competition with its superior brand quality and range of options."

© 2022 European Supermarket Magazine – your source for the latest Technology news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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