Ocado’s pre-tax loss widened 37% to £289.5m in the six months to 28 May, up from £211.3m the year prior as it focuses its efforts on “driving cost efficiencies and cash flow improvement.”
The business said this growing loss came partly as a result of £77.2m of “exceptions costs”, which includes restructuring costs from the closure of its Hatfield customer fulfilment centre in April, and a revaluation from M&S.
While M&S was set to pay Ocado £191m in performance payments in 2023 as the final installment of the £750m deal, that value is now expected to be slashed by around £70m due to loss in profit and sales.
The retail arm, which is half owned by M&S, reported an underlying loss of £2.5m over the period, however the online grocer said a return to profitability on an EBITDA basis in the second quarter helped to offset the losses that occured at the beginning of 2023.
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Retail sales rose by 5% in the first half of the year, which Ocado said was “driven by a mix of strong active customer growth, growth in average orders per week and the average basket value increasing,” by 1.5%.
Ocado Group chief executive, Tim Steiner, said that it has “made good progress over the last six months.”
“In the UK, Ocado Logistics had a steady, profitable first half and Ocado Retail is making good progress, with a return to profitability in Q2.
“Our operations in the UK remain an important demonstration of the potential for our international ambitions, as we seek to transform the economics of online grocery and expand into the wider automated storage and retrieval solutions market.”
He added that as the group continues its focus on “driving cost efficiencies and cash flow improvement,” the group “looks forward to delivering the full potential of the business and continuing to create lasting value for all our stakeholders.”
