Ocado shares jump by a fifth
Ocado takes a turn for the better after attractive profit forecasts were announced


Shares in the online retailer Ocado jumped by a fifth recently after its latest interim results showed it has “nudged up” its cash flow and profit forecasts, says Isabella Fish in The Times.
Not only have pre-tax losses at the group narrowed to £154 million in the six months to the end of May, but group revenue also rose by 12.6% to £1.5 billion. It also expects annual underlying cash flow to climb by £150 million, up from a previous forecast of £100 million. Ocado’s solutions business, which licences warehouse and logistics technology to retailers, seems to have done particularly well, with sales increasing by 21.8% to £241.4 million.
The upgrade will “go some way towards allaying investors’ fears over the business”, says Lex in the Financial Times. The company has suffered a “series of blows”, including a decision by US supermarket chain Kroger to close three sites powered by Ocado’s technology, along with declining revenue from its retail arm.
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
Shareholders will also be happy that Ocado’s management has said the group will not need to raise more cash and repeated its plan to become profitable on a pre-tax basis in five years. The upgraded results and guidance will certainly be “music to the ears of investors hoping Ocado might be in a better position to start delivering the goods financially in the not-too-distant future”, says AJ Bell’s Dan Coatsworth.
However, it still needs to “make a habit of regularly producing results like these” if it wants to “make the critics put away the knives they’ve been sharpening for some time”. That “may not be easy” given its “slow progress” in signing up new technology partners for its grocery logistics platform, while a few existing partners “have scaled back expansion plans involving Ocado”. Ocado’s relationship with its UK retail partner, Marks & Spencer, also remains “fragile”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
Accelerating state pension age hikes could cost Brits in early 50s almost £18,000
A recently launched review of the state pension age has sparked concern that the planned increases could be accelerated. How much could it cost you?
-
How to invest according to your age - the one rule everyone can follow
Whether you’re a seasoned investor or new to the game, here’s the one investing rule to help determine how much you should invest according to your age
-
How to use SAYE and SIP schemes to multiply your money
Employers’ savings or share-incentive plans like SAYE and SIP schemes can help top up your pension
-
Sizzling sales at Sysco – should you invest in this US food supplier?
The American food distribution group Sysco is expanding rapidly worldwide and is still reasonably valued
-
Where investors can find value now
Opinion Active fund managers and blue chips on both sides of the Atlantic look appealing, says ByteTree’s Charlie Morris
-
How to balance growth and income when investing
Dividend-paying stocks have beaten the market. That doesn’t mean that income funds will do best
-
UK equities: where to find a great British bargain
UK equities are staging a comeback, but there’s still plenty of value out there, says Rupert Hargreaves
-
Top global stocks offering rising income and lasting long-term growth
Opinion Samantha Fitzpatrick, co-manager of the Murray International Trust, selects three global stocks where she’d put her money
-
Just Group has the wind behind it – should you invest?
Just Group, a retirement products provider, is well placed to profit from a growing annuity market
-
Britain’s fallen stars: a second chance for quality stocks
Quality stocks in the UK saw share prices collapse in the wake of Covid. That has created an opportunity for smart public investors — and private buyers