Ocado dives £500m into the crimson: Shares plunge once more as ‘really dismal’ results rattle investors
Ocado losses ballooned to half a billion kilos as consumers added fewer objects to their on-line baskets in the face of rising dwelling prices.
In an replace that analysts branded ‘really dismal’, the on-line grocery store reported a lack of £500.8million for 2022 as revenues held agency at £2.5billion.
That got here on prime of a £177million loss a yr earlier and despatched shares down one other 12 per cent.
Ocado, led by chief exec Tim Steiner (pictured), reported a lack of £500.8m for 2022 as revenues held agency at £2.5bn
The inventory has now fallen greater than 80 per cent since peaking in 2020 amid a pandemic-fuelled on-line procuring increase.
Revealing that chief govt Tim Steiner was paid £2million final yr, Ocado additionally mentioned the worth of his shareholding fell by £231million over the 12 month interval to simply underneath £130million.
Sales at its grocery arm Ocado Retail – a 50:50 three way partnership with Marks & Spencer – fell 3.8 per cent to £2.2billion final yr as cost-conscious clients reined in spending.
Business was additionally hit as consumers returned to cafes, eating places and bodily supermarkets following the finish of lockdown restrictions.
With competitors heating up amongst the supermarkets, Ocado launched a contemporary value battle pledging to match costs in opposition to over 10,000 merchandise bought by Tesco.
Steiner – whose £2million pay cheque final yr was only a fraction of the £59million he received in 2019 – insisted that ‘each firm has had its enterprise mannequin examined by a mix of macroeconomic and geopolitical headwinds’ in the previous yr.
‘We have extra confidence in our mannequin than ever earlier than,’ he added. But Clive Black, an analyst at Shore Capital and home dealer to M&S, mentioned the results had been ‘really dismal’, including: ‘One can not but see the rainbow, by no means thoughts any pot of gold.’
With gross sales at the grocery division down, Ocado racked up a lack of £4million, a dramatic decline in fortunes having made earnings of simply over £150million in 2021.
Crunch time: Sales at its grocery arm Ocado Retail – a 50:50 three way partnership with Marks & Spencer – fell 3.8% to £2.2bn final yr as cost-conscious clients reined in spending
Steiner mentioned the firm was hit by ‘larger prices and smaller baskets’ in addition to a ‘Covid unwind’. Ocado’s well-heeled consumers have tightened their purse strings amid eye-watering will increase to vitality and meals payments in the final yr.
A typical basket dimension dropped to 46 objects in 2022 from 52 in 2021, with the common spent dragged all the way down to £118 from £129.
This got here regardless of a 13 per cent rise in lively clients to 940,000 whereas weekly orders hit a median of 377,000 versus 357,000 in 2021.
As properly as its grocery enterprise, Ocado owns know-how and robotics platform arms, promoting automated warehouse tech to companies throughout the world.
Within this facet of the enterprise, the International Solutions part noticed one other yr of heavy losses.
And whereas its UK Solutions and Logistics division did make a revenue of £67.2million, this had dipped barely from £68.5million in 2021.
Russ Mould, funding director at AJ Bell, mentioned the retail three way partnership with M&S ‘seems to be caught in the mud’ and that ‘endurance is carrying skinny for the long-suffering shareholders’. Shares fell 12.2 per cent, or 76p, to 548.8p.