Ocado weathers difficult environment to post increase in profit and revenue

A strong performance in its core business and ongoing progress against its strategic objectives helped Ocado post a sharp increase in annual profits and revenue.

The grocery retailer said on Tuesday (31 January) that in the 52 weeks to 27 November, revenue grew 14.8% year-on-year to £1.27bn ($1.59bn, €1.48bn), while gross sales were 13.1% higher than in the previous year, climbing to £1.27bn.

As a result, full-year profit before tax and exceptional items was 21.8% higher year-on-year, coming in at £14.5m.

The company added the number of active customers rose 13.9% from the year before to 580,000, while deflation in the grocery market saw the average order size decline 2.7% to £108.10.

Meanwhile, total orders have grown by 17.9% to an average of more than 230,000 orders per week, with the highest number of orders delivered in a week exceeding 270,000.

Over the past 12 months, the FTSE 250-listed group has kicked off operations at its new customer fulfilment centre in Andover, which boasts the first installation of the company's new technology.

Ocado added it has also made good progress in improving the efficiency and output of its existing operations, increasing the capacity from its existing facilities by more than 20,000 weekly orders.

"These developments position us well for future growth, whilst improving our returns and enhancing the service we can offer our customers," said group chief executive Tim Steiner.

"In this ever-evolving retail environment, we look forward to further developing our capabilities through innovation, creating the next generation eCommerce capabilities that will ensure our offer remains compelling for both retail and OSP customers alike."

Last year, Ocado signed a deal with Morrisons, under which it provided technology and distribution services to the FTSE 100-listed supermarket to launch its online food business, Morrisons.com. On Tuesday, the former announced it had extended the deal and will broaden the range of services on offer, which will include the provision of a store picking module.