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Ocado losses narrow on pandemic-driven grocery sales boost

By BFN News | 07:18 AM | Tuesday 09 February, 2021

Grocery delivery and logistics technology group Ocado posted a narrower annual loss after its sales were boosted by higher demand for groceries during Covid-19 lockdowns. Pre-tax losses for the year through 29 November amounted to £44.0 million, compared to losses of £214.5 million year-on-year. Revenue climbed 33% to £2.33 billion and pre-exceptional earnings before interest, tax, depreciation and amortisation rose 69% to £73.1 million. Ocado said the loss was driven by a 24% rise in depreciation, amortisation and impairment costs to £168.9 million, primarily due to amortisation related to a software rollout. Looking forward, Ocado said revenue growth in its retail business was highly dependent on the length of Covid-19 restrictions. For its UK solutions and logistics business, it forecast double-digit percentage revenue growth. International solutions revenue from Ocado Smart Platform partners was expected to increase to around £50 million. Ocado said it was investing an additional £30 million to accelerate investments in technology and platform, in response to the increased demand for online grocery Additional capacity fees for UK fulfilment centre sites should broadly return UK Solutions & Logistics to 2019 EBITDA levels, including cost allocation changes, it added. International solutions EBITDA was expected to be lower, reflecting greater investment in building the business, more than offsetting the increase in revenue. Capital expenditure was expected to be around £700 million. 'The landscape for food retailing is changing, for good,' chief executive Tim Steiner said. 'Going forward, customers who have experienced the benefits of online grocery shopping are likely to become ever more discerning.' Story provided by

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