Ocado Shares Spiked 10.6%, Then Fell Back on Its FY ’23 Results

The Ocado Group PLC (LON: OCDO) share price spiked 10.6% after its final results for the 53 weeks ended on December 3, 2023. The company reported that its total revenue reached £2.8 billion, marking an increase of 9.9%. The growth was attributed to a 44% increase in Technology Solutions, a 1% rise in Ocado Logistics, and a 7% uplift in Ocado Retail.

The grocery technology company's adjusted EBITDA rose to £51.6 million, a substantial improvement of £125.7 million from the previous year's (£74.1) million loss. Notably, Technology Solutions reported a £15.4 million profit, Ocado Logistics contributed £30.1 million, and Ocado Retail achieved a £10.4 million adjusted EBITDA. 

The Group has successfully reduced costs through operational efficiencies and lower support expenses, with the Ocado Smart Platform (“OSP”) direct operating costs decreasing to 1.65% of installed sales capacity from 2.02%.

The underlying cash outflow was (£473) million, a £356 million improvement over the previous fiscal year, surpassing the anticipated £200 million enhancement. Liquidity remained robust, with £0.9 billion in cash and cash equivalents and a total gross liquidity of £1.2 billion, including a £0.3 billion revolving credit facility.

The loss before tax improved to (£394) million, factoring in £187 million from the AutoStore settlement, a £107 million enhancement compared to the previous fiscal year. Technology Solutions witnessed a 25% growth in average live modules, increasing from 84 to 105, with a year-end total of 111 live modules. 

The technology solutions growth included three new Customer Fulfilment Centres (CFCs), totalling 26 sites (22 CFCs and 4 Zooms) operational by the fiscal year's end. The Partner Success program was expanded to boost long-term growth and profitability among partners operating live CFCs, focusing on maximising capacity utilisation and returns.

Tim Steiner, Chief Executive Officer of Ocado Group, said: “I am pleased to report good progress across the Group in 2023. Our technology is transforming how people shop for food as we help some of the world's best and most innovative retailers set the bar for excellence in grocery e-commerce worldwide. We opened three new state-of-the-art robotic CFCs in Chiba city (near Tokyo) in Japan, Calgary in Canada, and Luton here in the UK and increased the amount of installed capacity for our clients by a quarter. We now have installed capacity at our retail partners for gross annual grocery sales of over £8bn.”

Ocado share price. 

The Ocado share price spiked 10.96% to trade at 541.80p from Wednesday’s closing price of 488.30p.