Shares in Ocado (LON:OCDO) have fallen into the red in today’s session as the online retailer warned that the fire at its Andover robotic warehouse in Hampshire was expected to hit sales. The update comes after the company posted its full-year results yesterday, revealing that its losses had widened.
As of 10:40 GMT, Ocado’s share price had fallen 8.05 percent to 950.80p. The stock is weighing on the benchmark FTSE 100 index which is currently 0.08 percent worse off at 7,171.53 points.
Andover fire to hit sales
Ocado announced in a statement this morning that the fire which had started yesterday morning in its Andover customer fulfilment centre (CFC) was not contained as the company believed, and had expanded last night. The group said that while it was informed by the Fire Brigade that the fire was now under control, “during the night part of the roof collapsed and there has been substantial damage to the majority of the building and its contents”.
Ocado cautioned that since Andover was providing about 10 percent of its current capacity, the incident would result in a constraint to the group’s “ability to meet our growing customer demand and there will be a reduction in sales growth until we can increase capacity elsewhere”.
Peel Hunt trims rating
Analysts at Peel Hunt meanwhile trimmed their rating on Ocado from ‘buy’ to ‘hold’ with a price target of 1,000p following the news. Proactive Investors quoted the broker as commenting that given the worse-than-first-reported damage, “this is likely to have a substantial impact on its Ocado.com customer experience and, whilst it is covered by insurance, could do lasting damage over at least the next 12 months”.
As of 10:53 GMT, Wednesday, 06 February, Ocado Group PLC share price is 960.20p.