Ocado bets on skyscraper farms with £17m spree

ONLINE grocer Ocado was growing on investors after it announced two investments worth £17m in skyscraper farming firms.

So-called vertical farming, where produce is grown in vertically stacked layers or up the sides of buildings, is being hailed as the future of the industry.

As populations soar, and space runs at a premium, it should allow farmers to grow much more with much less land.

Ocado’s first investment is in a new joint venture, called Infinite Acres, formed with US indoor farming company 80 Acres and Netherlands-based horticultural systems business Priva. Each business will own a third of Infinite Acres, and Ocado will make an undisclosed cash investment and loan. As its second deal in the sector, Ocado has snapped up a 58pc stake in Scunthorpe-based Jones Food Company, Europe’s largest operating vertical farm.

Jones Food is producing leafy greens and herbs for UK customers, and with its 12 kilometres of LED lights is able to produce consistent crop yields all year round.

Tim Steiner, Ocado’s chief executive, said: ‘We believe that our investments today in vertical farming will allow us to address fundamental consumer concerns on freshness and sustainability, and build on new technologies that will revolutionise the way customers access fresh produce.’

The aim is to have vertical farms next door to all of Ocado’s delivery warehouses, Steiner added, so fresh produce can be sent to a consumer’s kitchen within an hour of it being picked. Shares jumped 4.7pc, or 52p, to 1165p.

Marmite owner Unilever was also splashing the cash, as it bought luxury skincare brand Tatcha for a rumoured £394m. Tatcha was founded in San Francisco in 2009 by Victoria Tsai, but its products are based on Japanese skincare rituals. Shares edged down 0.3pc, or 15p, to 4899p as investors digested the news of the deal. Ocado’s gains helped the

FTSE 100 climb 0.6pc, or 43.6 points, to 7375.54 points.

But plumbing giant Ferguson weighed on the blue-chip index, as it revealed its growth in the US was falling short of what was hoped for. The company said profits for the whole year should still be in line with expectations. For the three months ending April 30, the third quarter of its financial year, revenue across the whole Ferguson group was up 7.3pc yearon-year to £4.2bn. The company also announced a £394m share buyback, but its stock still slid by 4.6pc, or 248p, to 5100p.

Tissue maker Accrol was beginning to pull investors back on board after a torrid couple of years. The toilet-roll specialist said that in the last quarter of its year to April 30, following a turnaround which saw it ditch several of its less profitable contracts, performance began to improve.

Total revenues for the year were around £119m, similar to the previous year. But toilet-roll sales were up around 12pc to £85m, and shares climbed 3.8pc, or 1p, to 27p.

Adhesive company Scapa, which makes the sticky part of wound dressings as well as industrial adhesives, jumped 11.9pc, or 19.4p, to 183p as its chief executive made an extraordinary U-turn.

Heejae Chae had announced his intention to step down last month, but yesterday said he had retracted his resignation.

It seems the indecisive boss had his interest sparked by a potential legal case with medical dressings maker Convatec.

Earlier this month, Convatec said it was terminating a contract with Scapa – a move which Scapa maintains is unjustified.

The termination could knock Scapa’s revenue by £28m, and profit by £13m, but the business said it will pursue ‘all appropriate rights and remedies’.