1000 Thursday 13 December 2018

Continuing the theme of UK supermarkets this week, Ocado have just released their Q4 results and the numbers are impressive. In the 13 weeks leading up to 2nd December, the online grocer recorded a 12% rise in retail revenue to £390.7m compared to £348.9m from the same period last year. In July, the firm predicted a growth of between 10 to 15% for the full year and these figures prove them to be quite accurate. The number of average orders rose from 283,000 to 320,000 (13.1%) while average cart value fell slightly from £105.94 to £104.91.

The positive results of the company come at a time when it sees much transformation in the way it operates and sets out plans for the future. In May, US chain Kroger paid $248m for a minority stake in Ocado and in mid-November, It was announced that new partners are to build the first of 20 robotic warehouses in Cincinnati. Ocado CEO, Tim Steiner, looks forward to the opening of their new high-tech warehouses and was quoted as saying “Although in many respects 2018 has been a transformative year for Ocado, the story has only just begun”.

In early trading this morning, the market reacted positively to the report and shares in OCDO.L rose above 3% at 823.00. While the summer months saw even stronger value for the company, its level today is still an incredible 134% above its level a year ago. Peel Hunt have been the first broker to react to the report this morning and reiterated their Buy recommendation while maintaining their target price of 1,700.00. In July, Ocado hit their all-time high of 1,146.00 and given their current valuation, growth in numbers, transition into the US market via the Kruger deal and enhancement of their services, Investors may wish to take a closer look at the firm.

To get an in depth view on Ocado, call one of our brokers directly on 0121 454 0770 or enter your details below.

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