Ocado’s Share Price Drops on Turnaround to Loss

iNVEZZ.com, Tuesday, July 2nd: Ocado Group Plc (LON:OCDO), the UK’s largest Internet-only grocer, slid into the red in the first half of the year despite a jump in sales. Ocado’s share price shed more than two percent in early trading in London on Tuesday.

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**Ocado Swings into Loss**
Ocado today announced unaudited results for the half-year period ended May 19, 2013.Operating loss was £1.1 million, as compared with a profit of £1.7 million in the fiscal first half of 2012. The company posted a £3.8 million loss before tax for the reported period, as compared with £0.2 million pre-tax profit in the prior-year period. As The Times reported, the pre-tax loss was worse than analysts’ estimates of £2.3 million. Basic and diluted loss per share was 0.66p as compared with earnings of 0.03p in the first half of 2012.

Revenue increased 15.6 percent to £355.9 million as compared with £308 million in the first half of 2012. The company also reported a rise in net debt, which stood at £74.4 million as of May 19, 2013, as compared with £55.2 million as of December 2, 2012.
Ocado’s share price had risen nearly five-fold since November and hit a record high of 325p last month in the wake of a 25-year joint venture deal with food retailer Wm Morrison Supermarkets to provide its online grocery operation by January 2014.

Ocado posted one-time costs of £2.8 million related to the opening of the company’s new distribution centre in Warwickshire in February and professional fees in relation to finalising the deal with Wm Morrison.
**Sales Rise**
!m[Online Grocer in the Red despite Rise in Half-Year Sales](/uploads/story/3578/thumbs/pic1_inline.jpg)
Ocado’s gross sales rose 15.2 percent, from £332.3 million, to £382.7 million, due to the focus on recruiting new customers and increasing shopping frequency of regular customers. Average orders per week increased by 13.4 percent to 139,000, up from 122,000 in the first half of 2012. Active customers stood at 360,000 at the end of the 24 weeks to May 19, as compared with 337,000 in the prior-year period.

“We expect to continue growing broadly in line with the market,” Ocado’s CEO Tim Steiner said in the statement.
**Ocado’s share price was 2.31 percent down at 305.00p as of 09:43 BST on 2 July 2013.**
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