Ocado's Earnings Jump On Pandemic Demand Boost
Online grocer and technology group Ocado Group has reported a 69% increase in 2019-20 core earnings, boosted by the pandemic generating huge demand for home delivery.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to £73.1 million (€83.3 million) in the year to Nov. 29 2020, from £43.3 million (€49.4 million) in 2018-19. The company had forecast earnings 'over £70 million'.
Group revenue rose 32.7% to £2.33 billion (€2.66 billion) with revenue from the retail business, a joint venture with Marks & Spencer, up 35% to £2.19 billion.
Fees invoiced to its International Solutions partners rose more than 52% to £123.9 million.
Shares in Ocado, which have more than doubled over the last year, closed Monday at 2,850 pence, valuing the business at £20.6 billion.
That valuation has been mainly driven by demand for its state-of-the-art robotically operated warehouses from supermarket chains around the world, including Kroger in the United States, Casino in France and Aeon in Japan.
The group said retail revenue growth in 2020-21 year would be highly dependent on the length of COVID-19 restrictions and the timing of planned additional capacity.
Ocado plans to open three new UK warehouses in 2021 which will provide 40% more capacity.
It forecast double-digit percentage revenue growth in its UK Solutions & Logistics business in 2020-21, reflecting the ramp-up of new capacity.
Revenue from its International Solutions partners was expected to increase to around £50 million, reflecting the benefit of revenue from new warehouse sites.