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Technology

Ocado Quarterly Sales Growth Slightly Lower, In Line With Expectations

British online supermarket Ocado said retail sales growth slowed a touch in its latest quarter, though it was in line with the group's guidance for the full year.

The group is ramping up distribution capacity in Britain, and opened its fourth robotic warehouse this summer at Erith, near London.

Ocado said Erith processed over 20,000 customer orders last week, 14 weeks after opening, a number that its third warehouse, in Andover, southern England, took 15 months to achieve.

Revenue Growth

The group said retail revenue rose 11.5% to £348.6 million in the 13 weeks to Sept. 2, its fiscal third quarter, having risen 11.7% in the first half.

In July, Ocado forecast retail revenue growth of 10-15% for the full 2018 year.

In the third quarter average orders per week rose 11.4% to 283,000, while average order size was flat at 106.26 pounds.

Shares in Ocado have rocketed more than 200% over the last year thanks to four major overseas technology partnership deals, the latest with U.S. supermarket chain Kroger. The stock closed Monday at 912.6 pence, valuing the business at £6.1 billion.

"Ocado's unique and proprietary technology, which makes these facilities work, is bringing greater value, quality and convenience to British shoppers while at the same time helping our partners redefine the shopping experience for their own customers," said Tim Steiner, Ocado chief executive.

"We are on track to deliver a significant number of new CFCs for our Solutions partners in the coming years and as such are fulfilling our goal of changing the way the world shops".

Full-Year Forecast

Prior to Tuesday's update analysts' average forecast was for Ocado to make a 2018 pretax loss of £30 million and core earnings (EBITDA) of £73 million.

That compares with a loss of £500,000 and core earnings of £84.3 million in 2017.

As at Sept. 2 the company had cash and cash equivalents of £406.1 million and borrowings of £281.2 million.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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