Ocado jumps after return to first-half underlying profit

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Ocado jumps after return to first-half underlying profit © Reuters. FILE PHOTO-An Ocado grocery delivery van is driven along a street in London, Britain, March 25, 2023. REUTERS/Toby Melville/File Photo

By James Davey

LONDON (Reuters) -Ocado, the British online supermarket and technology group, returned to underlying profit in its first half and stuck to its annual guidance, helped by demand for its retail services and robotics, sending its shares soaring on Tuesday.

The group swung to a profit for the six months to the end of May, posting core earnings (EBITDA) of 16.6 million pounds ($21.72 million), ahead of a consensus forecast for a loss of 16 million pounds, and reversing a loss of 13.6 million pounds in the year-earlier period.

Ocado (LON:) also said its Ocado Retail business, the online supermarket joint venture it operates with Marks & Spencer (OTC:), returned to profitability in the second quarter.

Shares in Ocado jumped 14.6% in early trading after what Jefferies analysts called a “solid” performance.

“There is clear upwards pressure on full-year 2023 consensus expectations,” they said.

Ocado’s cutting edge robotic warehouse technology has helped it bank multiple international clients, including retailers such as Kroger (NYSE:) in the United States, Aeon in Japan and Casino in France, but it has so far struggled to be consistently profitable.

The group said there was no change to the financial guidance given at its full-year results in February.

It maintained its guidance for Technology Solutions to deliver “positive” EBITDA over the full 2022-23 year, with Ocado Retail making “marginally positive” EBITDA, and Logistics making “stable” EBITDA.

The group’s shares soared much as 47% on June 22 after the Times newspaper reported possible takeover interest from more than one U.S. suitor including Amazon (NASDAQ:). Ocado and Amazon declined to comment at the time.

“Speculation is speculation, I have nothing to say,” Tim Steiner, Ocado’s founder and chief executive, told reporters on Tuesday.

($1 = 0.7641 pounds)

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