Spending

Ocado’s annual loss widens as spending offsets growth

ocadoThe annual loss widened as increased investment in its solutions business more than offset higher revenue at the online retailer and technology group.

Pre-tax statutory loss widened to £176.9m in the year to end December, from £52.3m the year before, as revenue rose 7% to £2.5bn of pounds sterling.

Earnings before interest, tax and amortization fell to £61m from £73.1m. Analysts on average had an expected profit of £60m and revenue was in line with forecasts.

Distribution and administration costs jumped 20% to £976.7 million as Ocado spent on technology to supply its retail customers and expand support functions.

Ocado sells groceries online in the UK through a joint venture with Marks & Spencer – a business that exploded during the pandemic. Its solutions business also helps retailers outside the UK to set up and improve their online operations, which should be its main source of long-term growth.

Retail revenue grew 4.6% to £2.3bn in 2021 and international solutions revenue quadrupled to £66.6m as Ocado opened five facilities for its clients. UK Solutions and Logistics revenue increased 8.6% to £710.4 million.

Tim Steiner, Chief Executive of Ocado, said, “The past year has further reinforced the fact that demand for online groceries is here to stay. In the majority of mature markets, the fastest growing channel is online and to really win here, food retailers need to offer the best deal with the best profitability across all customer missions.”