On the up Ocado invests £5 million to help build ‘vertical farm’ as sales surge
OCADO is planning to “assist” with the building of a vertical farm near Bristol, it has been announced.
The online grocer said it had invested £5 million in Lincolnshirebased Jones Food Company as part of a wider £25m raise.
The funding will be used to help JFC – Europe’s largest vertical farm – to build a second site outside the city.
Ocado said its original stake in JFC, which uses hydroponics and renewable energy to grow herbs and leafy greens, was now worth “more than double” its initial investment.
The announcement was made as Ocado posted its half-year results yesterday. The company said in the six months to May 30 losses narrowed sharply as sales surged.
But the company said shoppers had begun returning to some prepandemic habits due to easing restrictions.
Ocado posted a £23.6m loss before tax over the period – down from losses of £40.6m a year earlier. Underlying earnings – the company’s preferred measure – rose 41 per cent to £61m.
Ocado said revenues for its retail joint venture with Marks & Spencer jumped 19.8 per cent in the first half to £1.2bn.
This comes as a marked slowdown on the 39.7 per cent sales rise notched up in the first quarter to February.
The online grocer also said its first UK mini customer fulfilment centre in Avonmouth was “ramping faster” than any facility before it.
The facility was built to support the company’s retail arm – Ocado Retail.
Ocado said the centre was now operating at more than 50 per cent of its capacity of 30,000 orders a week, just over four months after having gone live – and a little over a year-and-a-half since the site was acquired.
“Though uncertainties remain regarding the performance of Ocado Retail in the second half as Covid restrictions continue to ease, we are encouraged by the performance in the second quarter, which shows a strong increase in customer transactions offsetting the normalisation of the value of the average basket,” Ocado said in a statement.