Ocado’s pre-tax losses widen despite increasing sales
Online grocery retailer Ocado saw its pre-tax losses widen last year despite an increase in sales and a deal with Morrisons to supply its online grocery delivery service.
In the year to 1 December 2013, the company made a pre-tax loss of £12.5 million compared to a loss of £0.6 million in the previous year.
While gross retail sales rose 15.2% to £843 million in the year, EBITDA increased by 32.8% to £45.8 million.
The results mean that Ocado has yet to make a profit since it first started its online delivery service in 2002, although today it said that the online shopping momentum was “unstoppable” and that the company was well positioned to benefit from this in 2014.
Never Miss a Retail Update!In the 2012-2013 financial year, Ocado grew its number of active customers to 385,000 from 355,000 in the previous year with new customer acquisitions up over 40%. In addition, the average basket increased to £113.53 from the previous £112.10.
During the year, Ocado also signed a long term agreement with Morrisons to provide it with IP and operating services to launch its first online grocery business, which although lucrative added to Ocado’s costs in the 2012-2013 financial year. There were also pre-opening costs relating to Ocado’s new customer fulfilment centre in Dordon and its new dedicated non-food distribution centre in Welwyn Garden City, which will support growth of the company’s non-food business.
Commenting on the results Ocado chief executive Tim Steiner said: “2013 was an extremely busy year for us with significant progress in growing both our customer numbers and average spend thanks to a wider range of products, even better prices, and the fact that we are now even easier to shop. We have continued to grow our general merchandise business, adding depth to the range in certain non-food categories and launching Fetch, our specialist online pet store.
“The successful opening of our new CFC during the year provides us with the capacity to continue to grow and we are well placed to take advantage of significant change in our industry.”
Speaking of the tie-up with Morrisons Steiner added: “This development reflects the increasing demand for online grocery shopping in the UK and internationally, and a validation of the unique technology, IP and operating model pioneered by Ocado. We are confident that we are well positioned to benefit from future strategic developments as online grocery shopping increases in popularity.”
In separate statement, Ocado also announced that its co-founder Jason Gissing is to leave the company in May 2014 to spend more time with his children and to focus on a number of environmental and social causes.
