The company also completed a complete review of its range ahead of next year’s joint venture
Ocado (OCDO) results give M&S investors food for thought
- Reported revenue up 10.8%, in line with previous guidance
- Average weekly orders rose 10.4%
- The market welcomed the figures with a 2% rise in the shares in early trading
- Recommendation: We continue to recommend Ocado as a Hold for investors seeking growth and willing to accept a medium to high level of risk
Ocado Retail, the joint venture between Ocado and Marks & Spencer, reported a solid set of fourth quarter figures this morning with revenue up 10.8%, which was in line with the company’s previous guidance. Average weekly orders rose 10.4% and the company said it completed a review of its range ahead of the switchover to M&S in September 2020. The company said that the venture with M&S is working well and will benefit from new fulfilment centres in Bristol and Purfleet as well as the rebuilt Andover site.
The market welcomed the figures with a 2% rise in the shares in early trading. They show good current trading but more importantly for both Ocado and M&S investors they show that the venture is well prepared for the switchover next year, a very important moment for M&S in particular as it will be the first time their food range will be available online. For Ocado the retail side is also significant but it is now more focused on growing its Solutions business which provides major retailers around the world with the technology to provide online deliveries. The recent successful £600m bond sale and agreement with Japan’s retail group Aeon underline the growth on that side of the business, so we continue to recommend Ocado as a hold for investors seeking growth and willing to accept a medium to high level of risk.
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