Ocado (LSE: OCDO) share price jumped 13%, reaching 659.60 pence each in London on Tuesday morning. Year-to-date, Ocado’s stock has risen by 5.4% and an impressive 76% since the end of May.
For the half-year period ending on May 28, revenue increased by 8.6% to £1.37 billion compared to £1.26 billion in the previous year. However, the company reported a widened pretax loss of £289.5 million, up from £211.3 million.
Exceptional costs surged to £77.2 million, significantly higher than the previous year’s £7.0 million. These costs included £38.7 million from a UK network capacity review and £17.4 million related to the fair value of contingent consideration receivable from Marks & Spencer Group PLC for their 50% stake in the Ocado Retail joint venture.
Ocado reported earnings before interest, taxation, depreciation, amortization, impairment, and exceptional items of £16.6 million, a positive swing from a loss of £13.6 million in the previous year.
Chief Executive Officer Tim Steiner highlighted that Ocado secured new deals during the half-year period. The opening of the first customer fulfilment centre for AEON, Japan’s largest food retailer, in Chiba City marked a significant milestone for the grocery sector, demonstrating the global applicability of Ocado’s proprietary artificial intelligence and robotics technology.
Ocado’s UK-focused arm, Ocado Logistics, saw a 1.7% year-on-year revenue increase to £335.2 million. In Technology Solutions, which provides the Ocado Smart Platform logistics service to grocery partners worldwide, revenue surged by 59% to £198.2 million.
The retail arm alone achieved a 5.0% revenue growth, reaching £1.18 billion. The number of active customers increased by 11% year-on-year, totalling 959,000. Average orders rose by 4.0%, while the average basket value climbed 1.5% to £121.22.
Ocado highlighted that its retail arm recently returned to profitability, with positive earnings before interest, taxes, depreciation, and amortisation (EBITDA) in each month of the second quarter. The company expects mid-single-digit revenue growth in Ocado Retail and a “marginally positive” EBITDA for the unit.
However, in the second half of the year, Ocado cautioned that customer and order numbers for the retail segment may reflect a tougher comparison due to significant customer acquisition actions carried out a year ago. Nonetheless, the company anticipates volume-driven growth to accelerate again in the fourth quarter.
