Ocado Group reports a 69% increase in its full-year core earnings

Written by: Wajeeh Khan
February 9, 2021
  • Ocado Group reports a 69% increase in its full-year core earnings.
  • The online grocer's retail revenue jumps 35% on an annualised basis.
  • Ocado expresses plans of opening three new warehouses in the UK.

Ocado Group plc (LON: OCDO) said on Tuesday that its full-year core earnings came in 69% higher than last year due to the ongoing Coronavirus pandemic that fuelled demand for home delivery.

Ocado shares, that you can learn to buy online here, slid a little under 5% in premarket trading on Monday but regained almost half of the intraday loss on market open. Ocado Group performed largely upbeat in the stock market last year with an annual gain of more than 75%. At the time of writing, it is valued at £19.84 billion.

Ocado’s retail revenue jumps 35% on an annualised basis

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For the year that concluded in November 2020, Ocado reported £73.1 million of EBITDA versus a significantly lower £43.3 million in the previous financial year. The company had expected at least £70 million of core earnings in the recent year. Ocado also said on Tuesday that sales tax on Britain’s online retailers is not appropriate.

At £2.33 billion, the online grocer’s revenue climbed by 32.7%. Its retail business, in collaboration with Marks & Spencer, saw a 35% annualised growth in revenue to £2.19 billion. As per Ocado, the length of government-imposed restrictions to combat the ongoing health emergency will determine the growth in its retail business revenue in fiscal 2021.  

In comparison, Ocado’s retail revenue had jumped to £579.6 million in the fiscal fourth quarter. The COVID-19 crisis has so far infected more than £3.9 million people in the United Kingdom and caused over 112 thousand deaths.

Chief Executive Tim Steiner’s comments on Tuesday

CEO Tim Steiner of Ocado Group said on Tuesday:

“We also look forward to welcoming shortly both a new Chairman and CFO and the fresh perspectives they will bring on our growth opportunities. With Kroger’s first CFC set to go-live in H1, and seven of our nine partners likely to be on the OSP by the end of the year, we are very excited to be ever closer to our ambition of changing the way the world shops.”

The Hatfield-based company expressed plans of increasing its capacity by roughly 40% via opening three new warehouses in the UK this year. For fiscal 2021, Ocado forecasts its UK Solutions & Logistics segment to see double-digit percentage growth in its revenue on the back of the increased capacity. International Solutions revenue, on the other hand, is expected around £50 million.