M&S to pay Ocado around £200m as joint venture delivers

Marks and Spencer is expected to confirm its food delivery venture with Ocado is meeting performance targets, resulting in a payment of £200 million given to the online grocer.

The move follows the venture, which was initially launched in September 2020, as a result of the Covid-19 pandemic.

Despite, the next financial hurdle must be met by November 2023,  bosses at both establishments are confident that the goals will be met.

However, the payment will not need to be made until the performance deadline has passed at the end of next year and at around that time, M&S would have taken control of the board of the partnership.

As a result, there has been some speculation that M&S may also try to increase its existing stake in Ocado Retail above 50%.

READ MORE: M&S colleagues given day off for Platinum Jubilee

According to one source, the move would be a signal that M&S is ready to accelerate its turnaround strategy under it under newly appointed co-chief executive Stuart Machin.

However, company sources have dismissed the idea of an increase in its stake, with M&S declining to comment.

The partnership was initially launched to benefit the company as shoppers turned to lockdown to delivery firms while being forced to stay at home, as a result the operation made £28 million profit for the group in the six months to 2 October.

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