After 15 years and around £500m of investment, online supermarket Ocado has delivered its first annual profit. It earned £7.2m before tax in the year to November, compared to a £12.5m loss the year before. Sales excluding VAT and vouchers hit almost £1bn. Ocado now has 453,000 customers and 8,000 employees. Long-suffering investors will not be rewarded with a dividend; all the profits will be ploughed back into the business.
What the commentators said
But can it? "UK grocery is a brutal business." Other supermarkets are getting their online act together, agreed economist.com. Click-and-collect, which allows customers to fetch their shopping at the supermarket, will "challenge Ocado with its fleets of delivery vans". New competitors, such as AmazonFresh, will also be a test.
There's more to this story than groceries, though, said James Quinn in The Daily Telegraph. Ocado has invested heavily in IT and sees itself as a technology platform that "can be rolled out to new retail customers with just small tweaks". It says it plans to sign a deal with an international partner this year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The launch of Morrisons online service, which runs on Ocado infrastructure, "is a start" towards the vision, reckoned Lex. But until we get at least one promised international deal for Ocado's "wizzy", bespoke technology, concluded Alistair Osborne in The Times, its valuation 155 times 2015 earnings remains "bonkers".
-
Lloyds, Halifax and Bank of Scotland to shut another 45 branchesLloyds Banking Group, which includes Halifax and Bank of Scotland, is set to close a further 45 branches in 2024 - find out if a branch near you is closing.
-
US stock trading app Robinhood launches in the UK
The low-cost trading platform has opened another waiting list for British investors - following two failed attempts to launch in this country - and is hoping to be fully operational next year.
-
As Ocado’s troubles mount, it’s time to sell
Tips Online retailer Ocado has struggled to build value for shareholders, and still isn't turning a profit. If you hold Ocado shares, now might be a good time to sell, says Rupert Hargreaves.
-
Ocado finally takes off
Features Online grocer Ocado has been a “jam tomorrow” story for years. The jam now finally appears to have arrived. Alice Gråhns reports.
-
Ocado’s surge shows what happens when a hated asset springs a surprise
Features Shares in online grocer Ocado – hated by investors – suddenly spiked. It shows what can happen when sentiment turns, and holds a lesson for the broader UK market.
-
Shares in focus: Will Ocado ever make money?
Features Ocado's shares are pricey, but the online supermarket has promise. Should you buy in? Phil Oakley investigates.
-
Ocado IPO: Don't touch it with a bargepole
Features Ocado's flotation is like something out of the dotcom boom: an over-valued, loss making company in a desperate call for cash. But it's a great lesson in what to look out for in new issues, say Bengt Saelensminde.
