Minggu, 24 Juni 2012

Ocado still struggling to turn a profit as tough times bite

Ocado still struggling to turn a profit as tough times bite

By Neil Craven

PUBLISHED: 09:43 EST, 24 June 2012 | UPDATED: 09:54 EST, 24 June 2012


Grocery delivery firm Ocado is expected to report a lacklustre half-year performance this week, while investors will be looking for signs of improvement.

Profits in the six months to May are expected to barely break even, analysts predict.

The board is expected to report the company is on track to deliver improving figures with the opening of another distribution centre early next year. 

Tricky times: Ocado is struggling to make money in a tough market

Tricky times: Ocado is struggling to make money in a tough market

Ocado says it has ironed out issues at its distribution centre, which disrupted deliveries last year. Brokers hope it can accelerate sales growth in the second half.

But analysts fear that the warehouse in Dordon, Warwickshire, the company’s second major distribution centre after Hatfield, Hertfordshire, may not provide the anticipated uplift in profits, given that the first is still struggling to break even.  

Ocado has found itself at the centre of a supermarket price war, with margins in the grocery sector squeezed.

Both Morrisons and Tesco are expected to report declining profits in their current financial year against the previous 12 months.

Ocado has also been outpaced by the increase in grocery sales at Sainsbury’s and Waitrose, though from a small base. Its rollercoaster share price hit a low of 53p in December, but has since doubled.

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