Ocado bosses stay positive despite fire adding to £214m loss

THE HUGE fire which hit Ocado’s Andover warehouse contributed to the online supermarket sinking to a £214.5m loss for the year.

Some of the money will be recouped through insurance payments of around £90m, but the increased loss is also due to heavy spending by the business as it builds more fulfilment centres.

Despite the falls in profits, revenues rose 9.9 per cent to £1.7bn in the year to December 31 – driven largely by its retail division, which was up 10.3 per cent.

Bosses also remain positive, saying the impact from the fire cut 10 per cent of Ocado’s capacity – yet sales still grew overall.

The focus for the year ahead will be opening new sites, including Ocado’s first international centres in France for Groupe Casino and in Canada for Sobeys.

New sites will help Ocado spend £600m this year on expansions.

Chief executive Tim Steiner said he expects 30 outlets to be operational in the next few years. Closer to home, Ocado is opening smaller sites to improve availability,

including a micro unit in Tufnell Park, north London.

The newly-created UK solutions and logistics division, which provides services to the Ocado and M&S joint venture, alongside a contract with Morrisons, said underlying profits before tax hit £84.8m, up from £67m last year.

Mr Steiner, inset, added yesterday: “The landscape of grocery retailing globally is changing.

“We are excited to be able to play a leadership role through Ocado Retail, our joint venture with M&S, and through our Solutions partnerships, as we fulfil our mission of changing the way the world shops.” Richard Hunter, head of markets at interactive investor, commented: “Ocado remains at an interesting juncture.

“It has been a ‘jam tomorrow’ stock for some considerable time but has managed to keep the bears at bay with a series of partnerships with obvious potential.”

Mr Hunter added: “For investors, the danger is that the gap becomes too wide between expectation and reality.”