Ocado pre-tax profit soars 65% as shareholders await update on rumoured partnership talks

Online supermarket Ocado pleased shareholders by reporting that pre-tax profits jumped 65% in its 2015 financial year. The company reported a profit of £11.9m, up from last year's £7.2m.

Gross sales jumped by 14% to £1.1bn (€1.45bn, $1.58bn) in the full year to 29 November, fuelled by a 20% increase in customer numbers and a 12.4% rise in active customers.

"We are pleased to announce results today which illustrate the progress Ocado has made through its clear focus on innovation and customer service," Tim Steiner, Ocado's chief executive said.

"We are transforming the shopping experience for the benefit of our customers in the UK, and expect to do so for customers in other countries through Ocado Smart Platform. We look forward to making further progress over the current financial year."

In early morning trading, Ocado's share price jumped 6.5%, despite the fact the company could not give investors a concrete update on its rumoured partnership. The supermarket did confirm it is in talks with several parties to work on an international deal.

"Despite not signing a first deal in 2015, discussions with multiple potential international partners to adopt the Ocado Smart Platform solution continue and our confidence in signing a deal remains high," its management said in a statement.

The online supermarket already works with Morrison and Waitrose for food deliveries but rumours of a major deal with Amazon caused Ocado shares to soar in January. However, Ocado could not confirm any deal just yet.

John Ibbotson, director of retail consultancy Retail Vision, accused Ocado of having an identity crisis, arguing that the supermarket has to decide whether it is a grocery or technology company. "Ocado is fond of portraying itself as the grocery of the future. On this evidence, there's a danger it always will be."

"Its potential is still frustratingly unfulfilled. These results show solid revenue growth, but don't yet answer the fundamental question of what Ocado is for," Ibbotson added.

"There is clearly a place in the market for Ocado's high-end, online-only offering. Its hard-earned reputation for service is keeping customers loyal, but with the average order size falling and each delivery costing the company up to £20, it is working harder and paying more for every pound of revenue than its rivals."